The Truth About Project Labor Agreements

James Sherk at the Heritage Foundation’s blog The Foundry mentions President Obama’s pro-project labor agreement (PLA) Executive Order 13502 while summarizing a list of special interest handouts Big Labor has received beyond those hiding in the health care bill (“Obamacare Full of Favors for Big Labor,” 1/14/10).

Obama’s handouts for unions go beyond the health care bill:

• All that federal spending on public works construction projects? The President’s Executive Order on Project Labor Agreements reserves most of those jobs for union members.

TheTruthAboutPLAs offers a point of clarification for this statement. Nonunion contractors and their employees will have a fair shot to compete for contracts on some federal construction projects – we just don’t know how many or which projects – yet.  Executive Order 13502 encourages federal agencies to require PLAs on projects in excess of $25 million – and PLAs essentially guarantee an all-union workforce.  So more PLAs equals more all-union jobs. And if Big Labor is happy, that means more campaign contributions and assistance in the next election from Big Labor.  It is a nasty cycle of corruption and pandering to special interests.

We won’t know if  federal agencies will turn a blind eye to the politics of PLAs and break the corrupt feedback loop until after the FAR Council has issued their final rule implementing Executive Order 13502 into the government’s procurement code and agencies have a green light to use PLAs at their discretion. We do know that the Chief Executive wants more PLAs, so taxpayers and the construction industry should hope for the best and expect the worst.

Sherk provides a concise synopsis of how the health care bill is a prescription for more union membership and increased union market share by raising costs, killing jobs and driving nonunion competitors out of business:

Obama happily gives some liberal special interests loopholes and exemptions from the laws that affect everyone else.The closed-door negotiations over the health care bill have made this clear. Unions strongly objected to the excise tax on “Cadillac” health plans. By some estimates the tax would hit one in four union members. Union lobbyists pressured the White House to drop that tax. After a high-profile meeting between Obama and union lobbyists on Monday, the unions apparently have gotten what they asked for: the excise tax will not apply to collectively bargained health plans. The tax that unions found so onerous will now apply to everyone but them.

What a deal. Unions want the health care spending, but they do not want to pay for it. Obama gave them just that. It also makes for a great recruiting pitch: join a union, get a tax cut.

That is just one of the many handouts unions get in the health care bill. It sets aside $5 billion to subsidize the costs of employer health benefits for early retirees. Few nonunion employers, of course, pay pension and health benefits for workers to retire at 55.

Or consider the small business exemption from the employer mandate for businesses with less than 50 employees. All businesses, that is, except construction companies. The costly employer mandate applies to any construction firm with more than four workers. Why would Congress kick small construction contractors when they are down? Because the construction unions asked Congress to. They did not want their small competitors to get out from under the bill’s costs and gain a competitive advantage. What if those costs put small contractors out of business? That is just too bad.

Big Labor’s investment in politics produces competition-cutting vehicles like PLAs and the health care bill to give union-signatory contractors and union members an unfair advantage over the remaining 84.4 percent of the U.S. private construciton workforce that does not belong to a union.

Visit ABC’s Grassroots Action Center (log in and click on “Oppose Health Care Bill” under “Current Issues”) to communicate to Congress your opposition to these special interest handouts.