The Truth About Project Labor Agreements

Matt Lewis at The Daily Caller has an excellent piece on some special interest pie baking in the ovens of the Obama administration and Congressional leadership (“Cadillac Compromise May Breathe New Life to Card Check,” 1/27/10). Of course, one of the key ingredients is President Obama’s pro-government-mandated project labor agreement (PLA) Executive Order 13502:  

Recent developments are sending Big Labor scrambling to salvage its goal of increasing union membership. This is an important goal, inasmuch as unions are in serious danger of extinction.

Scott Brown’s stunning victory in the Massachusetts special Senate election—and the message it sent—implies the Employee Free Choice Act, also known as “card check,” can expect tougher opposition in this Congress. But the political reality is that President Obama still owes Big Labor several political paybacks—and those paybacks are now more likely to come through the Executive Branch.

One such repayment might come in the form of an Executive Order to promote project labor agreements (union-favoring contracts) on federal construction projects. (This is currently under a government regulatory review.) The order would make it difficult for non-union contractors to compete for big federal construction jobs.

While such a bold move may seem counterintuitive, with Democrats losing independent voters at an alarming rate, Obama may be forced to do whatever is necessary to salvage what’s left of his base.

This would be consistent with his recent moves. A few weeks ago, for example, Obama helped negotiate a politically unpopular ^[1] special exemption for union members who have so-called Cadillac health care plans (many of which were negotiated by unions in place of compensation). The deal would postpone their tax for five years, meaning it wouldn’t kick in until 2018. The fact that the public wasn’t supportive of the deal did not deter Obama from making it.

The article quoted ABC member Brett McMahon of Miller & Long Concrete Construction  for some insight:

Brett McMahon, a spokesman for Associated Builders and Contractors, recently explained to me that Obama was loath to anger labor, because, “They have a ready-made get-out-the-vote operation that is critically important and can be crucial in swing districts.”

Moreover, while Obama’s efforts to force union-favoring contracts may seem merely like an attempt to pay back a pro-Democratic special interest, there is real reason to believe his efforts are more urgent (and more telling) than most observers realize.

As labor union membership has precipitously declined over recent decades, many unions are ironically facing a similar problem as the auto industry they helped destroy: They are having a hard time keeping promises they made to members during better times.

The Washington Examiner’s Kevin Mooney ^[2] recently noted that according to the most recent 5,500 reports that unions are required to file with the government, “Eight of the largest unions have underfunded (pension) plans.”
What is more, citing the Pension Benefit Guarantee Corporation, Mooney added: “The average union pension has resources to cover only 62 percent of what is owed to participants and less than one in every 160 workers is covered by a union pension with the required the assets.”

Give the entire piece a read to learn how Big Labor plans to use special interest handouts like Executive Order 13502 and EFCA to boost membership and rescue failing pension plans.