On Tax Day, the critics continue to attack the Obama administration’s final rule that gives federal agencies the power to mandate the use of costly, wasteful and anti-competitive project labor agreements (PLAs) on federal construction projects costing more than $25 million. As they should. Under PLAs, taxpayers will now pay more and get less.
Isn’t it time we put an end to public officials wasting tax dollars on crony contracting and then sticking taxpayers with the bill? Congress can restore competitive bidding on federal construction contracts by passing the Government Neutrality in Contracting Act (H.R. 983/S. 90).
The Center for Individual Freedom (CFIF) says the New Obama Administration Rule Greases Union Wheels, But Runs Over Taxpayers:
What makes this new order particularly egregious is the fact that only 15% of the national construction workforce is unionized, leaving 85% of contractors excluded. That constitutes an enormous, immediate reduction in open and competitive bidding for federal projects. The economic rules of supply and demand often escape those on the political left, but did anyone within the administration pause to fathom what will happen when the supply of eligible contractors is suddenly reduced by 85%?
Of course, this unfortunate economic reality is limited to federal, state and local construction projects where PLAs are mandated by government entities. Let’s hope federal procurement officials deciding the fate of PLAs are familiar with fundamental economic theory.
Diana Furchtgott-Roth at RealClearMarkets argues that the final rule implementing President Obama’s government-mandated PLA Executive Order 13502 is one of the reasons why “The United States is the New Europe“:
According to the new rule, “every contractor and subcontractor engaged in construction on a construction project agrees, for that project, to negotiate or become a party to a project labor agreement with one or more labor organizations.”
The language might make more sense when translated into German or French. Under project labor agreements, all employees have to receive union-approved wages and benefits, even if they do not belong to unions. This drives out small businesses from competing for these projects; raises their cost to the taxpayers; and funnels a larger stream of union dues from taxpayers’ pockets to union treasuries.
With a nationwide unemployment rate of 9.7%, this executive order makes job growth in the private sector harder to come by. Taxpayer dollars don’t go as far because projects are more expensive, and small businesses, the engine of job growth, hire fewer workers.
And finally, at RedState via 73Wire , David Poff explains how Obama’s PLA final rule is one of many recent gifts to Big Labor (Obama Gets His Trotsky, Takes The *High Road* To Union Labor,” 4/15) via an interview with Brett McMahon of ABC member Miller and Long Concrete.