Investor’s Business Daily Editorial: Peace for PLA is Big Labor’s Implicit Threat Behind Promotion of Government-Mandated Project Labor Agreements

0 June 15, 2012  Federal Construction, State & Local Construction

An Investor’s Business Daily (IBD) editorial exposes the truth about government-mandated project labor agreements (PLAs) and chronicles political efforts to restrict and impose PLA mandates in California, Virginia, New Hampshire and San Diego on local, state and federal construction projects (“Public Wakes Up To Unions’ PLA Power Play,” 6/14/12).

Enjoy this excelent editorial (my emphasis in bold):

Unions: The push-back against public-sector collective bargaining goes beyond Wisconsin. Project labor agreements, promoted by the Obama administration, are also taking hits.

Want peace? Get a PLA. That’s the implicit argument — or threat — behind project labor agreements.

Until recently, we doubt if many voters outside the building industry were even aware of these union-friendly contracts and their costs. But more people, including San Diego voters, are catching on to them.

Last week, residents of America’s eighth largest city passed not one but two tough measures against unions in the public sector. One, widely reported, is a reform plan that puts most new hires on 401(k)-style retirement plans rather than guaranteed pensions. The other bans the city from requiring PLAs on any of its projects.

The PLA ban drew less attention across the country. But, in its way, it’s even more defiant toward Big Labor and its political allies.

Under Gov. Jerry Brown, California has enacted laws barring state construction funds for cities that ban PLAs. San Diego will now put those laws to the test.

On the other side of the country, PLAs lost a round at the regional airport agency representing Virginia, Maryland and the District of Columbia. Last Wednesday, the Metropolitan Washington Airports Authority voted 11-1 to drop PLA preferences from contracts on the $6 billion second phase of the rail line it’s building from D.C. to Dulles International Airport.

Unions took another hit at the end of May when the Obama administration rescinded a bid solicitation that would have required contractors on a $40 million Job Corps Center in New Hampshire to sign a PLA.

The move came after three contractors protested the PLA requirement to the Government Accountability Office and the GAO indicated that it would find in their favor.

PLAs can serve some limited purposes, such as ensuring a steady supply of skilled labor for long-term projects in remote locations.

But most public agencies these days aren’t building dams in the middle of nowhere. Instead, PLAs most often serve as a way to expand unions’ reach well beyond their scanty membership, which comes to just 14% of the construction workforce.

By law, PLAs on government projects can’t bar non-union workers and contractors, but the workers are channeled through union hiring halls.

Workers on a PLA-governed project typically need to pay union dues, even if they are not members. Their employers have to contribute to union pensions and health plans, which are closed to the workers unless they join the union. Contractors are forced to adopt inefficient union work rules and job classifications.

Unions get all this in return for promising not to strike. Peace at this price can be costly to the taxpayer.

Even the Obama administration has admitted this.

Its own Veterans Affairs Department ordered a study of PLAs in 2009 and found that in three of five metro areas surveyed the agreements would raise project costs by as much as 9%. PLAs were found to be closer to cost-neutral in heavily unionized areas, but even here they’d save money only in a poor economy.

Project labor agreements on government projects are technically private-sector deals, signed between contractors and unions.

But when tax money funds the projects and governments require PLAs for contractors to bid, they’re really just a backdoor form of public-sector collective bargaining — and another way that unions exploit their political power to get into taxpayers’ pockets.

So it’s good to see some signs of rising awareness about PLAs. With awareness comes skepticism, and with skepticism will come more votes like San Diego’s.

IBD editorial board, thanks for raising awareness about government-mandated PLAs.

Now it is time for readers to raise skepticism and promote fair and open competition on taxpayer-funded construction projects.

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