Project Labor Agreements and Big Labor Fail at Local Job Creation

5 August 5, 2010  Federal Construction, State & Local Construction

Big Labor bosses and government-mandated project labor agreement (PLA) advocates frequently claim that PLAs are the only way to guarantee local hire on construction projects funded by tax dollars.

Of course, this is another myth promoted by special interests to convince lawmakers and taxpayers that there is a public benefit to anti-competitive and costly PLA schemes, which funnel lucrative public construction contracts to unionized contractors and their union employees.

Research has found that a lack of competition and inefficient union work rules resulting from PLAs, even on projects subject to prevailing wage and benefit laws, increase the cost of construction. A series of studies by the Beacon Hill Institute found that PLAs increased the cost of school construction projects by 14 percent to 18 percent when compared to similar non-PLA schools.

An article in yesterday’s San Francisco Examiner demonstrates that PLAs can’t guarantee local hire because union hiring rules can’t guarantee local hire (“Union allocation is roadblock to local hiring,” 8/4):

SAN FRANCISCO — City residents are landing more construction jobs on San Francisco Redevelopment Agency projects, but union practices still keep some from working.

The City and the Redevelopment Agency, a state bureau that oversees massive building efforts, aim to provide half the work on construction projects to San Francisco residents.

But those goals are rarely achieved, prompting some activists and politicians to push for a law that would fine contractors when city residents perform less than half the work on a locally funded project.

Mayor Gavin Newsom would support such legislation if it’s achievable given the constraints of unions’ collective bargaining agreements and the poor economy, mayoral spokesman Tony Winnicker said.

Less than 25 percent of work on 29 San Francisco-funded construction projects went to locals, a city-funded research report published Monday showed.


But with tens of billions of dollars worth of construction planned in San Francisco, including the building of new Hunters Point neighborhoods, city and agency officials said unions hold the key to achieving 50 percent local hiring rates.

“There’s no way we’re going to meet the goal without relationships with the building trades,” Redevelopment Agency Executive Director Fred Blackwell said at the bureau’s meeting Tuesday.

That’s because construction workers are generally assigned to jobs by unions, not contractors.

“We cannot legally determine our membership by where they live,” San Francisco Building and Construction Trades Council Secretary-Treasurer Michael Theriault said. “Hiring is generally done under the principle that the worker who has been out of work longest has first crack at the work.”

Theriault is involved with a city task force that’s exploring ways of boosting the local work force through labor agreements and other measures. The group next meets Thursday.

That quote from a Big Labor Boss is accurate. Union membership and hiring hall rules can’t guarantee a local workforce for public projects. PLA advocates claim special language within PLAs can help establish local hiring goals (not mandates) that can help with local hire.  But so can clauses in contracts without all of the discriminatory and costly baggage contained in typical PLAs.

It is not uncommon for a city or state to experience a lack of job creation for local residents when Big Labor has control of an urban or regional construction market with help from politicians beholden to Big Labor’s special interest agenda.

Philadelphia has a similar problem.

In 2008, an investigative journalist from the Philadelphia Inquirer, Tom Ferrick Jr., uncovered government data indicating that Philadelphia’s construction trade union members “remain all-male, nearly all-white, and the majority live in the suburbs” (“Why the Unions Won’t Share: Data on their membership here show they are mainly white, male and suburban,” 1/6/08).  Ferrick’s piece discovered that almost all cityfunded construction work was conducted under PLAs or built all-union, yet construction jobs weren’t being created for minority, women or Philadelphia residents.

Washington, D.C., Baltimore, Las Vegas and NYC have experienced similar local hire problems with construction unions and/or PLAs.

In Washington, D.C., recent reports found that Big Labor Bosses failed to meet local and minority hiring goals set by the PLA on the Washington Nationals ballpark. One of the unions signatory to the ballpark PLA, Roofers Local 30, is based in Philadelphia (see page 19 of the PLA).

In July, Ashley H. Brown, Baltimore’s assistant attorney solicitor, examined controversial legislation (Bill No. 10-0455) before the Baltimore City Council that would require the city to include government-mandated PLAs on all contracts for construction projects with a total cost of $5 million or more in which Baltimore has a certain financial role.  Brown’s legal opinion found that mandating the local hire provisions via a PLA is illegal.

And as this article from the Las Vegas Review-Journal explains, typically union collective bargaining agreements contained within PLAs give out-of-area “travelers” or “boomers” hiring preference over local union members — and of course, skilled and qualified local nonunion labor are locked out because of the PLA too.

In New York, the NY Daily News reported that the community benefits agreement containing a PLA on the new $1.3 billion Yankee Stadium has been a “joke” and a failure:

Then there are all those promises about contracts and construction jobs.

The team acknowledges that more than 3,900 people have applied for construction work at the stadium. More than 80% didn’t belong to any union. Since you must be a union member to work on the site, the Bronx residents most in need of a job have been shut out of the daily workforce of 1,200.

As for the union employees, a lot of the craft unions have been “checkerboarding,” according to one source who has worked on the stadium project from the start.

“They take members who live in the Bronx but work at some other site in Manhattan, then they transfer them to the stadium just to boost the numbers. That doesn’t add any new jobs for Bronx residents.”

So even when Big Labor bosses and PLA advocates claim a PLA has helped meet local hiring goals, investigate whether “checkerboarding” is a problem and ask for evidence that the PLA has actually delivered a net increase in local employment.

Don’t let Big Labor get away with false claims that PLAs guarantee a local workforce.

Use this information from to debunk yet another pro-PLA argument.

Update #1:

An article in The Des Moines Register  highlights another reason why PLAs can’t guarantee local hire (“Prison labor accord to use Illinois halls, 9/22/10).

Numerous unions signatory to a PLA for an Iowa prison project have hiring halls that are physically located in Illinois:

Several union leaders and a union lawyer said Tuesday said that it’s common for union halls to have cross-state jurisdiction…

“I think it will be predominantly Iowans, heavily Iowans,” said Bill Gerhard, president of the Iowa State Building and Construction Trades Council.

But because the prison will be built on Iowa’s border, it’s likely that some Illinois and Missouri construction workers will be employed on the project, he added.

That means Illinois union members who are dispatched out of union hiring halls (regardless of where the hiring hall is located) will have preference over union construction workers from Iowa as well as nonunion construction workers from Iowa. Union hiring hall rules and collective bargaining agreements typically specify that employees at the top of the hiring hall out-of-work list are dispatched to jobsites first, regardless of their place of residency. A PLA cannot change this fundamental rule of union hiring halls.

This is another example why PLAs can’t guarantee local hire.

Of course, the real goal of these special interest government-mandated PLA schemes is to discourage competition from nonunion employees and their employers and reward Big Labor bosses for their political patronage.

There are other effective mechanisms to encourage local hire without the favoritism, waste and discrimination inherent in PLAs.

Update #2, July, 2011

This blog post provides analysis on the San Diego Union Tribune’s report that the San Diego school district has failed to meet the hiring goals of its labor pact, which promised to employ local workers to build and repair campuses under its $2.1 billion construction bond measure.(“Labor Pact Hiring Goals Not Met,” July 8, 2011).

The Detroit Free Press reported July 15, 2011 (pdf) that Detroit residents are getting 30% fewer construction-related jobs than promised by a PLA covering Detroit public school construction funded by $500.5 million for school capital improvement projects Detroit voters approved via Proposal S in Nov. 2009.

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5 Responses to Project Labor Agreements and Big Labor Fail at Local Job Creation

Tweets that mention Project Labor Agreements and Big Labor Fail at Local Job Creation | The Truth About PLAs -- August 5, 2010 at 11:21 am

[…] This post was mentioned on Twitter by U.S. Chamber, The Truth About PLAs. The Truth About PLAs said: Another PLA myth BUSTED! Big Labor and PLAs fail at creating jobs for city residents. […]

BenBrubeck September 30, 2010 at 11:51 am

Here is another reason why PLAs can’t guarantee local hire:

One of the unions signatory to a PLA in Iowa is physically located in Illinois. That means Illinois union members that are dispatched out of that hiring hall because they are at the top of the union hiring hall list have preference over union construction workers from Iowa and nonunion construction workers from Iowa.

BenBrubeck September 30, 2010 at 12:49 pm

If you are concerned about whether a PLA can help deliver local hire, it is important to know the union hiring hall and dispatch rules for local union halls that supply tradesmen to contractors participating in PLAs. These are the unions with jurisdiction over the location of the project and an agent of that union typically signs the PLA.

Here are some resources on hiring hall rules and rights for construction employees:

Ben Brubeck July 1, 2011 at 8:29 am

Here’s an example of a PLA project that failed at local hire and failed at safety.

The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) fined three construction companies and 14 site contractors a total of $16.6 million – the second largest OSHA fine ever – following a gas explosion during the construction of the Kleen Energy Plant in Middletown, Conn., that killed 6 workers and injured 30 people Feb. 7, 2010. The accident occurred while the project was built under a PLA and used union labor from as far away as Kentucky and California.

Kleen Energy’s fatal deal. CNN Money. 09/10/10
As Day Went On, It Got Worse: Kleen Plant Director Shaken By Lost Lives. Hartford Courant. 02/14/10.
Workers pushed hard to get Kleen Energy job done. Middletown Press. 02/02/10.

ABC Opposes Discriminatory, Costly PLA on East Side Fire Station | Think Merit Construction September 20, 2012 at 3:01 pm

[…] of PLAs claim PLAs ensure the use of local workers. The truth is that PLAs fail at real local hire and job creation. PLA supporters fail to mention the term “local workers” […]

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