Did “YouCut” Federal Project Labor Agreements Yet?

0 September 13, 2010  Federal Construction, Uncategorized

Congress is back in session this week, which means time is running out for you to tell Congress to say NO to wasteful and discriminatory project labor agreements on federal construction projects via House Republican Whip Eric Cantor’s “YouCut” program.

TheTruthAboutPLAs.com is asking readers and the public to support Oklahoma Congresswoman and gubernatorial candidate Mary Fallin’s (OK-5) YouCut proposal to prohibit the federal government from requiring anti-competitive and costly project labor agreements (PLAs) on federal construction projects.

Text YouCut1 to 68398 to ban government-mandated PLAs on federal construction projects.

The YouCut website, launched May 12 by House Republican Whip Eric Cantor (R-Va.), features a list of five proposals aimed at reducing Congressional spending. The public is encouraged to vote for a proposal they would most like to see eliminated by Congress. After the votes are in and a proposal is chosen, House Republicans will force a vote on the House Floor on whether or not to take up and debate the top vote-getter selected by the public.

In June, the YouCut website featured a proposal to eliminate federal government-mandated PLAs, but it was beaten by Rep. Aaron Schock’s (R-Ill.) suggestion to prevent millions of federal dollars in waste on signs advertising construction projects that are funded by dollars from the American Recovery and Reinvestment Act.

Here is a statement from Rep. Fallin’s press release in support of her anti-PLA YouCut proposal:

“The Executive Order issued by President Obama encourages the use of anti-competitive union favoring contracts, known as project labor agreements, which could increase the cost of government projects by as much as 20 percent,” Fallin said. “This doesn’t improve the quality of projects or create more jobs, it is simply a payback to organized labor. That means in the face of an unprecedented $1.5 trillion deficit, taxpayers are also on the hook for hundreds of millions of dollars wasted on government projects that could have been completed for far less.”

The winning YouCut proposal will be selected this week.

Please visit the YouCut site at http://republicanwhip.house.gov/YouCut/ and vote for proposal #1: “Prohibit Mandated Project Labor Union Agreements That Increase Government Construction” or text “YouCut1” to 68398 on your mobile phone.

Learn Why You Should Vote for This YouCut Proposal After the Jump

Do you want to save the federal government up to $2.6 billion a year?

Do you want to eliminate the influence of special interests and corruption in federal contracting?

Do you want to create employment opportunities for all skilled and qualified professionals in the construction industry, regardless of their affiliation with labor unions?

Are you opposed to forcing taxpayers to join or be represented by a union in order to get a job?

Do you want the federal government to deliver to taxpayers the best possible construction product at the best possible price?

If you answered yes to any of these questions, visit the YouCut site at http://republicanwhip.house.gov/YouCut/ and vote for proposal #1: “Prohibit Mandated Project Labor Union Agreements That Increase Government Construction” or text “YouCut1” to 68398 on your mobile phone.

PLAs are designed to funnel lucrative federal construction contracts to unionized contractors and Big Labor bosses that send campaign contributions to politicians who promote these schemes.

President Obama’s Executive Order 13502 encourages federal agencies to mandate wasteful and discriminatory PLAs on federal construction projects exceeding $25 million in value. PLAs are special interest schemes that hit taxpayers in the wallet and reek of political favoritism.

An April 14 Wall Street Journal editorial, “Crony Contracts,” blasts the Obama administration’s costly gift to Big Labor saying:

“Only 15% of the nation’s construction workers are unionized, so from now on the other 85% will have to forgo federal work for having exercised their right to not join a union. This is a raw display of political favoritism, and at the expense of an industry experiencing 27% unemployment … It’s also a rotten deal for taxpayers.”

Here are some important reasons why you should vote today to ban government-mandated PLAs on YouCut.

Wasteful PLAs harm taxpayers and the construction industry.

PLAs force contractors to follow archaic and inefficient union work rules that increase the cost of construction and make it difficult for nonunion contractors and their employees to compete against union contractors on a level playing field.

PLAs require contractors to hire most or all of their employees from union hiring halls, which effectively limits the pool of available bidders on federal projects to union contractors and union employees.

According to the most recent data from the U.S. Department of Labor’s Bureau of Labor Statistics, in 2009 only 14.5 percent of America’s private construction workforce belonged to a union. That means PLAs discourage more than eight out 10 U.S. construction employees from building projects paid for by their tax dollars.

Studies demonstrate that PLAs result in a lack of competition, increased costs and inefficiencies caused by union work rules that inflate the cost of construction between 10 percent and 20 percent when compared to similar projects without PLAs.

According to a September 2009 study by The Beacon Hill Institute at Suffolk University in Boston, PLAs significantly increase construction costs on federal projects without adding benefits for taxpayers. The study found that if President Obama’s Executive Order 13502 were in effect in 2008, federal construction costs would have increased as much as $2.6 billion because of PLAs. Americans can expect greater levels of waste in FY 2010 and 2011 construction spending due to a significant increase in infrastructure investments (approximately $150 billion) through the American Recovery and Reinvestment Act.

Employees who don’t belong to a union don’t benefit from PLAs.

An October 2009 report by Dr. John R. McGowan, “The Discriminatory Impact of Union Fringe Benefit Requirements on Nonunion Workers Under Government-Mandated Project Labor Agreements,” found that employees of nonunion contractors forced to work under government-mandated PLAs suffer a reduction in their take-home pay that is conservatively estimated at 20 percent.

PLAs force employers to pay employee benefits into union-managed funds, but employees do not see the benefits of the employer contributions unless they join a union and become vested in these plans.

Employers that offer their own benefits, including health and pension plans, often continue to pay for both existing programs and union programs under a PLA.

The McGowan report found that nonunion contractors are forced to pay in excess of 25 percent in benefits costs above and beyond existing prevailing wage laws as a result of this “double payment” attached to PLAs. These added costs make it impossible for nonunion contractors to compete and results in increased construction costs. It is also unfair to employees who have earned this money for a secure retirement.

McGowan found that had President Obama’s pro-PLA Executive Order 13502 applied to federal contracts in 2008, additional costs incurred by employers related to wasteful PLA pension requirements likely would have ranged from $230 million to $767 million and would reach higher levels in future years.

Lost wages for nonunion construction workers would have ranged from $184 million to more than $613 million, depending on the assumptions made for companies executing contracts via PLAs. In total, the move to PLAs would have cost nonunion workers and their employers $414 million to more than $1.38 billion in 2008.

Solutions to Waste and Cronyism in Federal Construction Contracting

Lawmakers and taxpayers can restore accountability and fiscal discipline in federal construction contracting by passing The Government Neutrality in Contracting Act (S.90/H.R. 983).

Taxpayers can urge Congress to restore fairness and accountability in federal construction contracting today by texting “YouCut1” to 68398 or by voting online for proposal #1: “Prohibit Mandated Project Labor Union Agreements That Increase Government Construction.”

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