The Truth About Project Labor Agreements

Aleksandra Kulczuga’s article at The Daily Caller, “Obama Administration Hands Down Rule Limiting Contract Bidding to Union Shops,” interviews an employee of a federal and state contractor who debunks common pro-PLA arguments relying on the fallacy that PLAs guarantee high wages and benefits on federal construction projects:

“As a public works company we’re already required to pay a prevailing wage,” said Mark Compton, director of government affairs at American Infrastructure, a heavy construction company in Worcester, Pa. “It’s not an issue of us paying people less, the idea that you get away with paying employees less than federal wages is just inaccurate.”

Prevailing wage laws are set at the local level for employees in various industries. Employers have to provide certified payrolls for projects that have prevailing wage requirements.

Prevailing wage and benefit rates are determined by the U.S. Department of Labor Wage and Hour Division and are required on federal construction projects covered by the Davis-Bacon Act.  These “prevailing” rates are often similar or identical to union wages and benefits. You can look up prevailing wages in your community here.

So next time PLA advocates argue that PLAs are the only way to guarantee that construction workers receive high wages and benefits, remind them that federal law already requires prevailing wages with or without a PLA on federal construction projects.

More from Compton on the impact of government-mandated PLAs on competition, competition and taxpayers:

“We work alongside unions a lot, they often subcontract to us — it’s not a matter of who is capable or not. We have a lot of respect for them and many contractors in the area choose to be union. Because our employees did not opt for union representation we are at a disadvantage,” Compton said.

American Infrastructure employs 1,500 people and says 80 percent of its contracts involved some level of state or federal funds.

Compton said PLAs stifle competition: “If it’s your home, would you rather have five bidding or two? I’m not here to tell you the unions aren’t qualified to do this work, we compete against them every day and sometimes they beat us and sometimes we beat them, but eliminating competition is discrimination.”

“PLAs raise costs — you’re looking at four schools for the price of five, or four bridges for the price of five,” he said.

“We have to go back to our employees, who are taxpayers, and tell them that they aren’t good enough to work on a project that is funded by their tax money,” said Compton. “Some of them have 10, 20, 30 years as a taxpaying employee of our company, and I have to tell them we can’t bid on these jobs now.”

So what does a PLA mandated by a federal agency as a result of Obama’s recent final rule mean to the construction industry as a whole and to businesses like American Infrastructure that create jobs and rebuild communities as a result of federal construction projects?

“Essentially the administration is picking winners and losers, and we have 25 percent unemployment in the construction industry,” said Ben Brubeck, director of labor and federal procurement at Associated Builders and Contractors, a construction trade organization.

More than 85 percent of the construction industry is not unionized. While the ruling is not a mandate, it encourages agencies to require union labor on any projects with more than $25 million in federal funding.

…[PLAs] effectively prevent non-union shops from bidding.

Public officials need to realize that denying contractors the right to work on public works projects have negative economic consequences on taxpayers AND job-creating companies.

TheTruthAboutPLAs.com note: American Infrastructure was awarded the nation’s first stimulus construction project and is a member of ABC.