Today the Washington Times ran an excellent story summarizing the controversy surrounding the U.S. Department of Labor’s (DOL) decision to cancel its solicitation for bids to construct a new Job Corps Center in Manchester, N.H. under a government-mandated project labor agreement (PLA) (Obama’s Union Drive Stumbles in N.H., 11/12).
The cancellation came in response to a protest filed with the Government Accountability Office (GAO) by ABC member North Branch Construction of Concord, N.H., with ABC support and representation. North Branch Construction challenged the PLA as unlawful and discriminatory.
The DOL’s Job Corps Center PLA was believed to be the first government-mandated PLA on a federal construction project since President Obama’s Executive Order 13502 was issued.
When the New Hampshire project was announced, critics warned that the union rules would drive up costs, delay the project and force most of the workers to pay union dues and pension contributions for which they likely will never receive benefits.
Just 8.7 percent of construction workers are unionized in New Hampshire.
Nationwide, about 16 percent of construction trades workers were union members or covered by union contracts in 2008, despite union workers generally receiving higher pay and better benefits than their nonunion counterparts, according to the Bureau of Labor Statistics.
An executive order by Mr. Obama in the first weeks of his presidency would make PLAs the norm for all federal contracts on large-scale construction jobs. The order is under review and a final rule is not expected for months, but the Labor Department went ahead and imposed a PLA on the New Hampshire job.
The order replaced one by the Bush administration that discouraged the use of such agreements.
Despite the setback for PLAs, Mr. Obama’s policies have largely succeeded in tipping the advantage to the labor movement.
He signed three other pro-union executive orders, including one requiring contractors on large federal projects to post signs informing workers of the right to join a union. The president also has appointed a succession of union loyalists to top spots in the Labor Department and on the National Labor Relations Board, which administers federal law governing the relations between unions and employers.
The Union News blog also covered this story and provided an explanation of the political motivation behind government-mandated PLAs (Obama Knocked Off Stride: Mystery Shrouds Obama Job Corps Center Union Payoff, 11/11):
‘Project Labor Agreements’ are an extortion scheme for union-backed politicians. Here’s how it works. Tax-funded construction projects are mandated to use union-only contractors. The contractors kick-back to the unions, with the cash finding its way back to their handmaiden politicians who write the PLA requirements. The result: non-union labor is excluded and the public is forced to pay a higher cost that includes the ugly forced-tribute payments to politicians.
This is a fairly accurate assessment of how PLAs make their way onto public projects, except that these discriminatory and costly agreements often permit nonunion contractors to bid on projects. But only if contractors agree to recognize unions as the representatives of their employees on that job without a vote by employees; use the union hall to obtain workers; obey the union’s restrictive apprenticeship and work rules; and contribute to union pension plans and other funds in which their employees will never benefit unless they join a union. The terms and conditions drafted by Big Labor and their hand-picked politicians are so burdensome that nonunion contractors frequently can’t and won’t bid on PLA projects.
Politicians rarely admit to the quid pro quo nature of PLAs and are quick to cite weak arguments in support of PLAs that are easily refuted. Typical PLA advocates cite arguments that these back room deals prevent strikes, ensure a trained workforce, benefit local communities, guarantee the delivery of on-time and on-budget project, and do not limit competition or give a union-signatory contractor an unfair advantage over a nonunion contractor.
However, the chilling impact of PLAs on competition from nonunion contractors is acknowledged and celebrated by Big Labor, which is why Big Labor’s political clout pushes PLAs through changes to public policy that advance special interests at the expense of taxpayers and open competition. In order to compete in a competitive market, Big Labor needs the government to change the rules to stifle efficient competitors.
For example, Building and Construction Trades Council of New York President Edward Malloy (“PLAs are Essential to Growth Opportunities for Union Sector,” Subcontracting News, March 2008) wrote the following about the importance of PLAs in New York City:
“To create growth opportunities in the union sector, PLAs are the most valuable tool we have…
…These PLAs, which typically involve modest adjustments on isues other than wages and supplements, can reap huge rewards for the union sector of the industry by assuring that all work from start to finish — including tenant build-outs — will be done union.
We must address our shrinking share of the residential market, particularly in the affordable and low-rise segments, but quite frankly, in the market rate and high-rise segments as well…
In the affordable and low-rise segments, however, we must acknowledge that there are very few projects where union labor, contractors and subcontractors are competitive. We can, and therefore must, adopt a more aggressive package of wages and supplements to address this sector of work…”
It is well-documented that the impact of government-mandated PLAs on competition is real and taxpayers are shouldering this burden. Government-mandated PLAs remain a form of government corruption and are bad public policy.