On Friday, President Obama mollified Big Labor bosses at the White House. Which means you better watch your wallets.

[snip]

One item on the Big Labor wish list: more failed government-funded infrastructure spending:

AFL-CIO President Richard Trumka, speaking for the union presidents at White House, backed administration efforts to boost funding for infrastructure projects.

“We need to make a long-term commitment to infrastructure,” he said.

In September, Obama called for spending $50 billion on infrastructure and then creating a national infrastructure bank that work with the private sector on longer-term projects.

“If you make a long-term commitment, then we can begin to crowd in private investment,” Trumka said. “Hopefully, we can get the infrastructure bank up and running that can.”

In a telephone interview, UAW president Bob King said higher spending on infrastructure would boost American competitiveness and noted improving the power grid would help automakers launch electric vehicles.

“You have to do infrastructure spending to put people back to work,” King said. “Every country we are competing against — China, Brazil, Korea, Germany — we are lagging behind and infrastructure s the foundation of your economy.”

As I reported in September, Obama’s infrastructure plan is the mother of all big dig boondoggles:

Like the infamous “Big Dig” highway spending project in Boston, this latest White House infrastructure spending binge guarantees only two results: Taxpayers lose; unions win.

The plan would add at least $50 billion more to the nearly $230 billion already allocated in the original trillion-dollar stimulus law for infrastructure. Less than one-third of that infrastructure stimulus money has been spent, but the urgency to pile on has increased exponentially as the midterm elections approach and unemployment hovers near 10 percent. So, the president says he wants to “put people back to work” through a new “upfront investment” in surface transportation, airports and the air-traffic control system paid for by repealing tax incentives for the oil and gas industries — followed by massive, unpaid-for expenditures on pie-in-the-sky high-speed rail, “environmental sustainability” and “livability,” whatever that means.

Obama spoke emotionally at an AFL-CIO rally on Labor Day about unemployed construction workers. A “lot of those folks, they had lost their jobs in manufacturing and went into construction; now they’ve lost their jobs again,” he said. “It doesn’t do anybody any good when so many hardworking Americans have been idled for months, even years, at a time when there is so much of America that needs rebuilding.”

But here’s the rub: Not all workers are equal in Obama’s eyes. And most of them will remain “idled” by the Democrats’ own design. The key is E.O. 13502, a union-friendly executive order signed by Obama in his first weeks in office, which essentially forces contractors who bid on large-scale public construction projects worth $25 million or more to submit to union representation for its employees.

The blunt instrument used to give unions a leg up is the “project labor agreement (PLA),”which in theory sets reasonable pre-work terms and conditions — but in practice, requires contractors to hand over exclusive bargaining control; to pay inflated, above-market wages and benefits; and to fork over dues money and pension funding to corrupt, cash-starved labor organizations. These anti-competitive agreements undermine a fair bidding process on projects that locked-out, nonunion laborers are funding with their own tax dollars. And these PLAs benefit the privileged few at the expense of the vast majority: In the construction industry, 85 percent of the workforce is nonunion by choice.

We don’t need to theorize about how this shakedown works in the real world. Boston’s notorious Big Dig was a union-only construction project thanks to a Massachusetts government-mandated PLA. The original $2.8 billion price tag for the project skyrocketed to $22 billion in state and federal taxpayer subsidies thanks in no small part to ballooning labor costs. In February, the Bay State’s Beacon Hill Institute found that PLAs added 12 percent to 18 percent to school construction costsin Massachusetts and Connecticut. In Washington, D.C., the Department of Veterans Affairs commissioned an independent study showing that PLAs would increase hospital construction costs by as much as 9 percent in some markets.

In short, Obama’s new Union Infrastructure Rescue Plan is a political favoritism scheme that raises the cost of doing business and bars tens of thousands of skilled, nonunion laborers who choose to run open shops from securing work.

ICYMI, here is a link to TheTruthAboutPLAs.com’s piece on Malkin’s Sept. 8 commentary about PLAs.

In February 2009, President Obama issued Executive Order 13502, which encourages agencies to require the use of wasteful and discriminatory project labor agreements (PLAs) on federal construction costing more than $25 million.  This order also overturned a federal policy that prohibited these types of Big Labor handouts on federally-funded work since 2001 – with positive results for taxpayers.

Ms. Malkin correctly points out that the Obama order is likely to be used to ensure that as many of the projects constructed with funds from this proposed infrastructure bank as possible bear the union labor – at the expense of the 85 percent of the construction workforce that choose not to join a labor union.

Here is an excerpt from Ms. Malkin’s piece (“The Mother of All Big Dig Boondoggles,” 9/8/10):

But here’s the rub: Not all workers are equal in Obama’s eyes. And most of them will remain “idled” by the Democrats’ own design. The key is E.O. 13502, a union-friendly executive order signed by Obama in his first weeks in office, which essentially forces contractors who bid on large-scale public construction projects worth $25 million or more to submit to union representation for its employees.

The blunt instrument used to give unions a leg up is the “project labor agreement (PLA),” which in theory sets reasonable pre-work terms and conditions — but in practice, requires contractors to hand over exclusive bargaining control; to pay inflated, above-market wages and benefits; and to fork over dues money and pension funding to corrupt, cash-starved labor organizations. These anti-competitive agreements undermine a fair bidding process on projects that locked-out, nonunion laborers are funding with their own tax dollars. And these PLAs benefit the privileged few at the expense of the vast majority: In the construction industry, 85 percent of the workforce is nonunion by choice.

We don’t need to theorize about how this shakedown works in the real world. Boston’s notorious Big Dig was a union-only construction project thanks to a Massachusetts government-mandated PLA. The original $2.8 billion price tag for the project skyrocketed to $22 billion in state and federal taxpayer subsidies thanks in no small part to ballooning labor costs. In February, the Bay State’s Beacon Hill Institute found that PLAs added 12 percent to 18 percent to school construction costs in Massachusetts and Connecticut. In Washington, D.C., the Department of Veterans Affairs commissioned an independent study showing that PLAs would increase hospital construction costs by as much as 9 percent in some markets.

In short, Obama’s new Union Infrastructure Rescue Plan is a political favoritism scheme that raises the cost of doing business and bars tens of thousands of skilled, nonunion laborers who choose to run open shops from securing work. In the name of patching up America’s highways and byways, Mr. Fix It would create another gaping fiscal sinkhole to appease his special interest donors. Recovery Summer turns to Union Payback Fall.

There is no question that Executive Order 13502 and the prospect of federally mandated PLAs will likely lead to additional government waste and discrimination.

A typical PLAs includes provisions designed to drive lucrative construction projects to Big Labor.  These provisions include:

• Despite the fact that contractors have their own benefit plans, PLAs require merit shop contractors to pay their workers’ health and retirement benefits to union trust funds. Thus, companies have to pay benefits twice: once to the union and once to the company plan. Nonunion employees never see any of the benefit contributions sent to union plans unless they decide to join a union and remain with the union until vested in plans.
• Paying into underfunded and mismanaged union pension plans can also expose merit shop contractors to significant pension withdrawal liabilities.  Signing a PLA and exposing a company to pension liabilities could bankrupt a contractor or prohibit contractors from qualifying for construction bonds needed to build future projects.
• PLAs require merit shop companies to obtain apprentices exclusively from union apprenticeship programs. Participants in federal and state-approved nonunion apprenticeship programs cannot work on a job covered by a PLA. This means craft professionals enrolled in all apprenticeship programs other than those offered by the union are excluded from work in their hometowns.
• PLAs require merit shop companies to obtain their workers from union hiring halls. This means a merit shop company has to exclude their hard working employees from specific jobsites and exclusively use unfamiliar union workers.  In other instances, merit shop employers can use a limited number of their own employees, but employers must send their nonunion employees to the union hiring hall and hope the union sends the same workers back to that specific jobsite.
• Nonunion employees may have to pay union dues and fees or join a union in order to work on a PLA project.

Numerous studies show that PLAs not only have a negative impact on the 85 percent of the construction workforce that is essentially barred from building these projects, but hardworking taxpayers as well.  Studies prove that PLAs increase construction costs by as much as 18 percent.  On a proposed $50 billion worth of projects, this could mean nearly $5 billion wasted.  And as Ms. Malkin points out, there is certainly anecdotal data that supports this point as well.

Taxpayer funded construction should be about the best products at the best price, not handouts to politically connected special interest groups.  To learn more, please visit our earlier posts:

Project Labor Agreement Basics: What is a PLA

PLA Final Rule Takes Effect Today: Let the Waste, Cronyism and Discrimination Begin

Required Reading on Multi-Employer Pension Plan Crisis

The Most Infamous PLA Job: Lessons from Boston’s Big Dig

Understanding the Merit Shop Contractor Cost Advantage

Here are the highlights with our emphasis added (L.A. to Eli Broad: ‘Stick ‘em Up’, 9/2/10):

It’s sickening to see the way Eli Broad is being mugged by Los Angeles.

Here’s a statesman who’s trying to make a gift to the city, and one that’s exceedingly generous. So you’d think the so-called leaders of Los Angeles County and the city would have the decency to say thank you.

Instead, they’re leveling the blued-steel barrel of government power at him and saying, “Stick ‘em up.”

Broad is being forced to march through L.A.’s band of brigands, paying a little extra here, a few million more there, and it’s stomach-churning to watch.

Broad’s gift, of course, is a downtown L.A. museum – that he would pay $100 million to build – that would display terrific art, which he would supply. And he’ll even endow it with $200 million to pay for its future operations. Got that? Broad’s gift would be akin to creating a city or county museum – an outstanding one – except he’s paying for all of it; taxpayers are getting a gift.

Well, Los Angeles County Supervisor Michael Antonovich didn’t see that. He saw a chance for a shakedown. There’s no reason for local governments to give Broad a $1-a-year lease for the land that Broad wants to build on, he said, asking, Why should we do a favor for some rich guy?

Well, here’s why: Broad wasn’t asking for a favor. He was requesting the same kind of consideration that cultural institutions from sea to shining sea have always received because cities and counties benefit tremendously from such museums. A dollar-a-year deal was given to the Norton Simon Museum in Pasadena and the Museum of Contemporary Art on Grand Avenue downtown (which is across the street from Broad’s proposed museum).

[snip]

But the holdup of Broad didn’t end there. The cutpurses down at the Community Redevelopment Agency told Broad he needs a big garage for his museum. Actually, the museum only needs 100 or so parking spaces, and it could lease those from nearby buildings, so, no, it doesn’t need a big garage at all. The CRA said Broad didn’t hear correctly. He needs a big garage.

So, without complaining, Broad agreed to loan the CRA $15 million to help pay for a 300-space garage under the museum. And Broad’s museum will lease parking spaces from the CRA. Money that the CRA can use to help repay the loan. Neat, huh?

But the CRA wasn’t done with Broad. At a recent meeting, the CRA required the museum be built under a Project Labor Agreement, which means it must be constructed with union labor.

Now, Broad would have done that anyway, but it provided Madeline Janis, who chaired the meeting for the CRA, a chance to let her union buddies take the stage and testify how they’d support the museum – so long as there was a PLA. (Does anyone else see an itty-bitty conflict in allowing Janis, who founded and oversees a union labor organization, to chair meetings in which the CRA becomes an unalloyed union-boosting agency?)

As they say, no good deed goes unpunished.

Visit our earlier posts for more information on the effort to ensure that public construction contracts are awarded based on open competition and value for taxpayers, and not special interest handouts to Big Labor.

Dick Lombardo, President and CEO of Associated Builders and Contractors (ABC) member Harkins Builders, discusses President Obama’s executive order encouraging the use of project labor agreements (PLAs) on federal construction projects costing more than $25 million with the Liberty Pundits on the May 19 edition of their podcast.

The full podcast is available here.

The Liberty Pundits also blogged about their interview with Dick and the Obama order (Obama’s EO 13502, PLAs and Union Handouts (Again), 5/19).  Here are the highlights from their post:

I’ll admit my gut instinct was that this forced unionization was piling on. I assumed that the percentage of unionization was quite high in this type of work – large construction projects. But I was wrong. Only 14.5% of the construction industry is unionized. That means that over 85% of the available talent is either being frozen out of these contracts or being forced to join the union, if only for that project. That means union dues. That means paying into union pension funds without the longevity to vest. That means more union donations to dems running for office, more bussed-in town hall attendees, and more bullhorns and cute signs at MoveOn.org rallies. Oh joy.

Further, the EO gets cute and then ominous all in one short section: Sec. 5. This order does not require an executive agency to use a project labor agreement on any construction project, nor does it preclude the use of a project labor agreement in circumstances not covered by this order, including leasehold arrangements and projects receiving Federal financial assistance. This order also does not require contractors or subcontractors to enter into a project labor agreement with any particular labor organization.

Does not “require” a PLA? How easy will it be for a pro-union executive agency to state, “This bid was not chosen because of the uncertainties associated with the proposal, i.e., without a PLA there is too much risk of cost increases and work stoppage.” It will so common, I suggest Rahm will have rubber stamps made of the several lines.

[snip]

Yet the reality is that published studies have found significant cost increases when PLAs are used: An October 2009 report by Dr. John R. McGowan of St. Louis University found that had Order 13502 applied to federal contracts in 2008, additional costs incurred by employers related to wasteful PLA pension requirements likely would have ranged from $230 million to $767 million. Lost wages for nonunion construction workers would have ranged from $184 million to more than $613 million. In total, McGowan estimates that the Obama order encouraging PLAs would have cost nonunion workers and their employers $414 million to more than $1.38 billion in 2008. These calculations would be similar in 2010 and beyond.

But let’s be fair. Here’s another study that is less critical of PLAs: Because they are negotiated pre-bid and specifically tailored to the needs of particular projects, PLAs give project owners, building contractors and trade unions a unique opportunity to anticipate and avoid potential problems that might otherwise arise and possibly impede project progress. They maximize project stability, efficiency and productivity and minimize the risks and inconvenience to the public that often accompany public works projects. This is why Project Labor Agreements have long been used in the private and federal sectors, and more recently by state, county and municipal agencies.

Ah, but do you see the assumption? ”Trade unions.”

This study goes on: On a typical construction project operating without the benefit of a PLA, there can be fifteen or more different collective bargaining agreements covering work being performed by various crafts. As many as fifteen separate union contracts are not generally coordinated in any meaningful way and this leads to certain inefficiencies — inefficiencies that can be addressed by a PLA.

Yes, assume the presence of trade unions, and perhaps a PLA makes sense. Yes, assume that 14.5% of the workforce should drive the labor practices of the remaining 85.5%, then perhaps PLAs make sense.

But. The. Assumption. Sucks.

Dick Lombardo and the Liberty Pundits aren’t the only ones discussing PLAs on the radio this week.  Carole Bionda, VP of ABC member Nova Group of Napa, CA and author of an outstanding editorial published in the May 15 edition of The Daily Caller, called into the “Central Wisconsin’s Morning News” program on WSAU-AM/FM in Wausau, WI earlier today to talk PLAs.

Carole does an outstanding job breaking down why PLAs are bad for workers and taxpayers alike.

The interview is available here.

Specifically, Mr. Loudon discussed how Big Labor is using PLAs to prop up their beleaguered pension programs.

Here are the highlights:

The worst part of the Obama executive order is the real reason for it. According to a September, 2009 report by Moody’s Investor Services, construction union pensions in 2008 were just 54% funded. Just like Social Security, the promised union pensions were too fat. They were built on the similar demographic flaw of social security. The system would pay full benefits to the earliest retirees, but would only be able to continue to do that if the ratio of workers to retirees is sustainable. So what does it mean when the ratio fails? How do you restore the footing on a plan so underfunded when the ration of worker to retiree continues to get worse?

You cannot violate existing contracts by slashing benefits to the retirees enjoying archaic, fat benefits. If you offer dramatically reduced benefits to the new workers, it will be difficult to attract them. What worker wants to put in a lifetime of work to fund the retirement of a bunch of people he never met, who are receiving benefits many times as rich as what he will receive? The answer is very few. The savvy skilled tradesman would rather go the merit shop contractor and build up his own 401k. Who wouldn’t? But since “Mars needs women”, and the union retirees and older members still need people paying in, no one is telling the younger tradesmen they are hosed. Meanwhile, since you can only “cheat some of younger union members some of the time, the search is on for new funding sources. There are exactly two. Before moving to those, consider this dilemma. What about those workers who have put two, three, or even ten years in and are now vested in the union pension plan? How can they leave and walk away from their investment? On the other hand, how can they keep working, knowing that pension plan is insolvent? They are the ponzies, trapped in service to their masters.

A number of proposals in Congress would unload the liability onto taxpayers. Not only is continuing the “too big to fail” bailout strategy, a violation of all that is just, but it continues to reward irresponsible planning. It would allow union employers to unload their liability, which now tips the playing field against the employers who are planning properly.

The second strategy to screw non-union workers and their employers is the current course of forcing union-only PLAs at all levels of government. Not only does this create more union man hours, it does something much more in the category of evil genius. When a non-union tradesman works under a PLA, the employer puts around $6 per hour into the union pension fund. These are dollars the worker earns but will never enjoy because the vesting period is five years and few if any construction projects run for five years. Clever, huh?

Mr. Loudon brings up a very important issue, that PLAs have a disproportionately negative impact on nonunion workers that are able to work on PLA projects.  An October 2009 report by Dr. John R. McGowan, “The Discriminatory Impact of Union Fringe Benefit Requirements on Nonunion Workers Under Government-Mandated Project Labor Agreements,” finds that employees of nonunion contractors that work on projects subject to government-mandated PLAs suffer a reduction in their take-home pay that is conservatively estimated at 20 percent.

The McGowan report found that nonunion contractors are forced to pay in excess of 25 percent in benefit costs above and beyond existing prevailing wage benefit laws because of a PLA’s union pension fund contribution mandate language, which prevents taxpayers from receiving the best possible price from nonunion contractors in the competitive bidding process.

This is just one more example of why PLAs are bad for taxpayers and the 85 percent of the construction workforce that chooses not to join a labor union.

We expect Baltimore City Councilman Bill Henry to introduce legislation today that would require “community partnership agreements” on construction projects that receive city financial support.  This comes two weeks after a similar proposal was supposed to be introduced but then it was pulled from the agenda.

Union bosses are hitting Baltimore residents with pre-recorded phone calls (A.K.A. “robo calls”) to draw attention to their “Get Baltimore Working” event this afternoon outside Baltimore City Hall to support the introduction of this legislation.

Here is the robo calls’ script, which many Baltimore residents can expect to hear on their voice mails today:

Hello, this Betty Bland Thomas, I’m the President of the Sharp Leadenhall Hall Planning Committee here in Baltimore and I am calling you to remind you about the “Get Baltimore Working” job rally, on tomorrow, Monday, March 22nd at 4:15 p.m. inside Baltimore City Hall. Councilman Henry is going to introduce a law to put Community Partnership Agreements on major dissolvements and construction projects throughout the City of Baltimore. When our tax dollars are spent to build in our city, we need to make sure residents who need work are being employed. So join us on Monday, March 22 at 4:15 at City Hall. It is imperative that we do something more than the status quo to address unemployment in Baltimore.

Paid for by the “Get Baltimore Working Campaign”

As we said in an earlier post, a community partnership agreement is just Big Labor’s way of rebranding PLAs. This effort is nothing more than a public relations gimmick designed to confuse the public about the true intent of this legislation, which is to leverage cronyism government relationships to pass legislation that favors Big Labor by cutting competition from qualified nonunion contractors and their local employees.

Big Labor’s rebranding effort is simply putting lipstick on the PLA pig.

Meet Ms. Porkzilla, the Project Labor Agreement (PLA) Pig

As as for the “Get Baltimore Working Campaign,” they are nothing more than a front group for Big Labor.  The only people from Baltimore they want to put to work are union members.

Here at TheTruthAboutPLAs.com, we noticed that others in the blogosphere have taken note of the problems with this proposal.  Here is a note from Examiner contributor and blogger Adam Meister in a blog post titled, “Bill Henry’s Union Related Robocall,” 3/19:

This is not going to create jobs and it is going to cost the tax payer dearly. I don’t see how this is not an illegal discriminatory practice.

We Agree.

Big Labor isn’t the only one to take action on this proposed bill.  The fight against this union-only discrimination took to the airwaves this morning on The Larry Young Morning Show on WOLB 1010 AM.  Larry spoke with ABC Baltimore chapter president Mike Henderson about the discriminatory impact of PLAs and Big Labor’s false promises to defend the proposed PLA legislation being considered by the City Council.

This post – complete with videos and graphs – touches on almost every aspect of these special interest handouts, including that PLAs are designed only to keep the construction unions in business, they discriminate against women and minorities and the construction unions are using state environmental regulations to keep nonunion workers from competing for work.

This blog post is required reading for anyone who wants to learn more about PLAs and Big Labor’s drive to monopolize taxpayer-funded construction work.  Here are several excerpts.

On the Riverside College District PLA requirement adopted in December 2009:

Ten minutes prior to the start of a December 15th, 2009 board meeting of the Riverside Community College District in California, board members are handed a 52-page document filled with millions of dollars in projects to be funded by the district’s taxpayers, who themselves are struggling under the state’s 12.4% unemployment rate.  The document, a draft Project Labor Agreement (PLA), will commit long-term construction and ancillary projects for the next several years to labor unions.

At least twenty-three members of the public, many of them local private business owners who oppose the PLA, have attended [the meeting] to publicly comment on the proposal.  Two of the board members have never even seen the PLA prior to today, and have asked for a special session to review it.  Despite opposition from the public, and the concern voiced by those two board members, the remaining three board members have moved that the Board of Trustees authorize Chancellor Greg Gray to negotiate the final PLA with the Riverside and San Bernardino Building and Construction Trade Councils. Board Trustees Virginia Blumenthal and Janet Green dissented.

So, without adequate time for all to review the draft, without any backup analysis provided to justify the use of up to $350,000,000 in Measure C taxpayer funds, without giving the public reasonable time to voice their opinions, and with an unemployment rate of over 12% when non-union workers are in even greater need of jobs than union workers…why would three of Riverside’s five board members vote to move forward with a final negotiation anyway? Why the rush? Residents and business owners in Riverside are wondering the same thing, and hope to have the chance to weigh in before the PLA’s final draft is signed.

On Greenmail in California:

…federal and state laws have been passed over time to improve conditions for workers in America, leading to the creation of federal agencies like the Occupational Safety and Health Administration (OSHA), the Environmental Protection Agency (EPA), Department of Labor (DOL) and the Equal Employment Opportunity Commission (EEOC) to name only a few.  While labor unions once represented a large portion of workers in America prior to the existence of such laws and agencies, workers now have proper outlets and interest in voluntary union membership has declined.  As such, labor unions are turning again to PLAs as a tool in helping them to survive.

While PLAs were once largely embraced in a marketplace when unions represented a greater majority of workers in the US, today’s PLAs must claim other benefits to be reasonably received by a general public that is no longer largely unionized.  Today’s PLAs purport to extend jobs to non-union workers, when in reality they place new impositions on both employers and workers, such as mandatory union-hall hiring, forcing non-union workers to pay union dues and make contributions to others’ pension funds. With the advent of the strict standards of the California Environmental Quality Act (CEQA), PLAs now typically promise union sanctioned “environmental expertise”, adding another weapon to big labor’s arsenal.  Since most unions receive public funding for environmental training and mitigation, union bosses use it to assert their perceived authority by challenging projects on environmental grounds. They effectively hold a project hostage until the parties agree to a PLA and allow union shops to take control of the project’s labor requirements.  It’s nothing less than blackmail, which is how a new spin on the old term “greenmail” came to be mainstream, as effectively illustrated in the video below.  (TTAPLAs NOTE: Read more on Greenmail here)

President Obama, California and PLAs:

Lately it’s as though progressives are trying to relive the New Deal days, allowing politics, not need, to drive who gets jobs, money, resources and contracts. The influence of politics on governmental decisions and policies is certainly having its impact on how many opportunities are created for the majority of Americans, versus for just a very small subset that are the union workers.

In February 2009, as one of his first duties in office, President Obama signed an executive order that authorized federal executive agencies to use project labor agreements on federal construction contracts with a total cost of $25 million or more.  The order also revoked President Bush’s prior ban on mandatory PLAs, an action he’d taken after congressional hearings produced evidence that PLAs were discriminatory against open-shops and non-union workers, increased costs on most projects and were too often vehicles for abuse .  When the American Recovery and Reinvestment Act was passed only days after Obama’s order, agencies were encouraged to mandate PLAs for all stimulus projects.

Recently, skepticism of PLAs has increased under closer scrutiny of stimulus project awards, and more business journalists have been examining current unemployment numbers, looking at who’s getting jobs from stimulus projects, and at the relation of such issues to unionization statistics, as well as reporting on potential abuses.

California is a prime example of such governing policies that reckon back to the 1930’s, but in a day when the current level of union membership no longer justifies the pro-union policy.  Backed by the State Building and Construction Trades Council (an arm of AFL-CIO), the state is awash in cost-prohibitive union PLAs right now, even in light of its dismal financial situation.  It almost defies logic.

Other PLA spending in California includes:

* The Long Beach Airport Terminal Improvement Project is moving forward with its $35 million PLA, despite its projected $11 million budget deficit, a gasoline tax, parking fee increases, spending cuts and the closure of several fire stations.
* The Northern California Power Agency project’s $432 million PLA will deliver $60 million for labor unions alone
* Under Mayor Antonio Villaraigosa, a former union organizer himself, Los Angeles has undertaken numerous PLA projects, including the Mass Transit Authority, which has already increased fares and taxes on residents, as it takes on the added cost that a PLA will bring to the project.
* View a complete list of over 400 PLAs implemented in California between 2000 and April 2009

The state faces a $20 billion budget deficit, it issued I.O.U.s in taxpayers’ refunds, and recently Standard & Poor’s lowered its credit rating, following downgrades already made by Moody’s Investors and by Fitch Ratings.

California taxpayers have also been dealt a series of other costs, such as an extra 10% taken from their paycheck withholding, a 5% surcharge on state income taxes, an increased sales tax, and increases in ancillary fees such as vehicle licensing fees.  While they struggle with these cost increases, taxpayers will also foot the bill for the increased costs of PLAs.  Meanwhile, they struggle with one of the highest unemployment rates in the nation.

The Impact of PLAs on minorities:

And before any of our readers start ranting that being against PLAs means being against minorities, check your stats.  While blacks and Hispanics represent 23% of the general population, only an average of 8% of construction union members are minorities.  Labor leaders and progressive groups will often insist that PLAs ensure that minority workers have fair access to construction work, yet this is simply untrue.  Open competition however will ensure fair access.  And it is actually the non-union associations and conservative think tanks that have been working tirelessly to change this.  The CATO Institute published a paper by David Bernstein in 1993 titled The Davis-Bacon Act: Let’s Bring Jim Crow to an End, which details the history of how the 1931 prevailing wages law has intentionally excluded minorities from the construction industry and why it should be repealed.  Popular belief has also often been that unions are largely dominated by members with little or no secondary education, when in fact in California specifically, the majority have a college degree or some college.  While many of those are in public administration and education, the majorities also include those in transportation and construction.

As we await final regulations on President Obama’s Executive Order 13502, encouraging PLAs on federal construction costing over $25 million, the California situation is the proverbial canary in the coal mine.  The decline of construction union membership described in this post is not unique to California; it is occurring throughout the country.

PLAs, like the Employee Free (Forced) Choice Act, represent Big Labor’s hail mary.  Rather than transforming themselves to compete in the 21st century workplace, unions would rather rig the rules to their own advantage at the taxpayers’ expense.

Again, this post is outstanding. Thanks to BigGovernment.com and Liberty Chick for helping to expose the truth about PLAs.

Visit here for our recent rundown of California PLA activity as well.

UPDATE: Ivan Osorio from the Competitive Enterprise Institute also covered this story on their blog www.openmarkets.org in a post titled, “The High Cost of Project Labor Agreements.”

Some elected leaders in California are coming up on a tough decision: do they do what’s right for taxpayers, or take from the poor and give to rich union officials?

The story: Working Americans — taxpayers — have taken it on the chin in a tough economy. And now union are increasingly pushing special-interest laws known as “project labor agreements” that ensure that taxpayer-funded projects cost more because they can only use union labor. (watch video for a good explanation of the issue)

Now officials in Riverside, California are looking to slap a costly project labor agreement (see here ) on $350 million of construction efforts at the community college district. This after they have have already raised tuition by 30 percent this year passed a major tax increase. Not to load you down with math but PLA’s add about 20 percent in costs — meaning that tuition goes up, taxes go up to pay for the construction bond, and unions skim about $50 million in added costs.

Before Riverside leaders cast their votes, they ought to know that there’s an ugly history of PLAs in California. Unions have turned to “greenmail” — virtual extortion dressed up as environmentalism — to push PLA requirements on projects. And there’s evidence from the state that they even fail to deliver on the promises/alleged benefits of using a PLA.

Perhaps those are among the reasons that in November the Orange County Board of Supervisors unanimously passed an ordinance banning PLAs to ensure that taxpayers got the best deal.

Will Riverside’s elected leaders do the same?

As the Lucas County PLA fight heats up, it’s like deja vu all over again for Lucas County residents.

Great Scott Marty! It turns out that Lucas County went down the PLA road in 1996. 

So why is Big Labor pushing for a PLA requirement if the county passed one in 1996?  It turns out the PLA mandate was such a failure and so burdensome that officials repealed it one year later.  That’s right!  The 1996 PLA requirement was repealed in 1997.

Here’s the background thanks to Maggie Thurbur via her blog Thurbur’s Thoughts.  The Lucas County Board of Supervisors adopted a resolution requiring PLAs on all county funded projects in excess of $50,000 in September 1996.  According to Ms. Thurbur, after problems with PLA policy precluding nonunion contractors’ low bid from being accepted and increasing county construction costs, the PLA requirement was overturned by the Supervisors in April 1997.

Clearly, Lucas County supervisors determined that government-mandated PLAs don’t work in the 1990s. Nevertheless, in a stunning example of bad government, a proposed PLA requirement is back in Lucas County.   Interestingly enough (although not surprising), the proposed PLA requirement before the Board of Supervisors in 2009 is nearly identical to the repealed 1996 county law. The most significant difference is the 2009 proposal is broader and would apply to almost all projects receiving county funds.

In other words, the Lucas County Board of Supervisiors found a construction procurement policy that doesn’t work, so now they want to expand it.

There is still more time to let Lucas County Commissioners know that special interest politics have no place in Lucas County, Ohio.  The vote is scheduled for December 15.

In the spirit of Biff Tannen, tell the Lucas County Commissioners to take their PLA proposal and “make like a tree and get out of here.”

Pete Gerken: pgerken@co.lucas.oh.us
Tina Skeldon Wozniak: twozniak@co.lucas.oh.us
Ben Konop: bkonop@co.lucas.oh.us
Phone number: 419-213-4500

Here are the highlights:

Barack Obama and his administration are about to significantly drive up the costs of federal building construction. This is an astonishing reach. The Office of Management and Budget has directed that any federal construction over $25 million benefit unions.

The order would make all federal construction projects 10-20% more expensive by requiring all contractors to either use union workers or apply inefficient union apprenticeship and work rules to their employees. Contractors would also be required to make contributions to union pension funds and other union programs that non-union workers will never benefit from.

This will hugely drive up the cost of construction of federal buildings and line the pockets of unions without even having union workers involved in the projects. The Bureau of Labor Statistics shows that only 15.6% of private construction workers in America belong to unions. In other words, 8 out of 10 construction workers in America will be legally denied the right to work on federal building projects.

This is appalling.

Great news in the midst of a recession, right?

Read the full post.