A Washington Times editorial calls government-mandated project labor agreements (PLAs) resulting from President Obama’s pro-PLA Executive Order 13502 and proposed D.C. Council legislation “a solution that neither the District nor the nation can afford” (“EDITORIAL: More silver pieces for unions,” 4/2).
Evidence rapidly accumulated that President Obama will pay any price, bear any burden, meet any hardship in order to do the bidding of big union bosses. Now Washington’s city council seems poised to pursue the same, sorry course.
At issue is a presidential executive order issued last year that is soon to be implemented – and a copycat proposal pending at the D.C. Council – that will require something called a “Project Labor Agreement” (PLA) on any government-funded construction project above a certain size. A PLA is a forced agreement between construction contractors and unions that requires all union rules be followed for the duration of the contract, even if the contractor or subcontractors are non-union companies. PLAs also require the contractors to pay into union health and pension funds even if the workers do not belong to the union. In practice, a PLA amounts to a guarantee that only unionized contractors will actually get the work no matter how many added costs will be borne by taxpayers as a result.
The president’s Executive Order 13502, which of course would have great effect in the District because so much of the federal government is located here, would apply to federal construction projects worth more than $25 million. The proposal before the D.C. Council, sponsored by Independent Michael Brown and Democrat Harry Thomas Jr., would apply to any government-assisted project costing more than a mere $200,000 – which means almost all of them.
A study released Wednesday by the national Associated Builders and Contractors (ABC) provides convincing evidence that PLAs are counterproductive. For one thing, the report says, only 12 percent of all construction workers in the city are unionized. A PLA thus would have the effect of disqualifying 88 percent of city construction workers from any government-backed project. It also would rule out the vast majority of officially “disadvantaged” contractors because most of them are nonunion. A PLA requirement would be especially bad news right now because “national construction unemployment stood at a whopping 27.1 percent in February 2010, far exceeding the overall national rate of 9.7 percent.”
The usual excuse for PLAs is to avoid labor unrest. Yet the ABC study concludes, “there is no statistical or anecdotal link between the absence of PLAs and the presence of labor strife.” On the other hand, the District’s own experience with both the Washington Convention Center and the Nationals Stadium, both built under PLA rules, showed significant cost overruns ($650 million budgeted, $850 million spent for the Convention Center), along with complaints of shoddy workmanship.
All of which is eminently predictable; lack of competition generally causes expenses to grow and work quality to deteriorate.
Granted, the ABC trade association has quite a stake in the issue, so critics might look askance at their report even though it is well-sourced and documented. A different study released last fall, though, reached many of the same conclusions. The Beacon Hill Institute at Suffolk University concluded, after extensive data analysis, that Mr. Obama’s executive order is “a solution in search of a problem” – and “a costly solution as well.”
It is a solution that neither the District nor the nation can afford.
Newspapers know The Truth About PLAs: These special interest schemes are bad public policy.
ICYMI, here is more information on the recent study, “The Problem with PLAs in the District of Columbia.”