Op-Ed Offers Solution to Government-Mandated Project Labor Agreement Problem

0 June 27, 2018  Featured, Federal Construction

The Hill published an op-ed by ABC CEO and President Michael Bellaman laying out three key policy recommendations for Congress and the Trump administration to enact in order to continue the construction industry’s positive economic growth (“Time for Cogress to bolster Trump’s roadmap for rebuilding America,” 6/27/18).

The op-ed is part of ABC’s one powerful message during its Legisaltive Week 2018.

Check out the portion of the op-ed on eliminating government-mandated project labor agreements (PLAs) via legislation or executive policy.

America’s construction industry is riding high. The positive economic impacts of President Trump’s first 500 days in office — especially the rollback of more than 800 regulations and the passage of a historic tax reform package — are driving momentum. As a result, employers feel more certainty in hiring and growing their businesses.

The demand for new construction projects has soared, according to the latest economic reports from Associated Builders and Contractors (ABC). ABC’s Construction Backlog Indicator (CBI), which reflects the amount of construction work under contract but not yet completed, expanded to a record 9.67 months during the fourth quarter of 2017 and remains elevated at 8.8 months in the first quarter of 2018. And about three-quarters of our members plan on hiring additional workers during the next two quarters, according to ABC’s surging Construction Confidence Index.

Now is the time to build on recent legislative and executive accomplishments to set the table for continued prosperity.

First, we must ensure that Congress and the administration are working with the construction industry to ensure we have the skilled workforce we need to build America. ABC estimates there are half a million open construction jobs today. Factor in a potential infrastructure bill with $1 trillion of additional construction spending into the equation, and the industry could need to fill another 1 million jobs as early as 2020.

Policymakers should throw their weight behind industry efforts to build a safe, skilled and productive workforce by supporting an all-of-the-above strategy of industry-recognized and government-registered apprenticeships, plus innovative and flexible models such as just-in-time task training, competency-based progression and work-based learning.

Trump’s executive order expanding apprenticeships is driving action to make these proposals a reality. Congress should also pass the Perkins Career and Technical Education Act and the PROSPER Act, which would open federal tuition assistance to industry-recognized education programs and better align career education programs with industry demand.

Second, Congress and the administration must promote open competition, efficiency, fairness and equality in government contracting. Government-mandated project labor agreements (PLAs) on federal and federally assisted construction projects discourages merit shop contractors and the 86 percent of the construction workforce that chooses not to join a union from competing for such contracts.

At a time when our industry is facing a skilled workforce shortage, it makes no sense to exclude the vast majority of American construction workers rebuilding their communities.

Moreover, PLA mandates drive up construction costs by between 12 percent and 18 percent, according to numerous studies Two dozen states already have enacted laws to ensure taxpayers are getting the most value for their tax dollars by prohibiting government-mandated PLAs, and Congress should pass the Fair and Open Competition Act (H.R. 1552/S. 622) to ensure maximum competition on federal and federally assisted construction contracts.

In addition, Trump should rescind an Obama administration executive order that encourages PLA mandates on taxpayer-funded federal construction projects and replace it with a new order that maintains government neutrality in contracting.

Finally, Congress must act to solidify the accomplishments of the Tax Cuts and Jobs Act, the first comprehensive tax reform in more than 30 years. For the construction industry, which paid the highest effective tax rate of any sector of the economy for far too long, tax reform gave us a simpler and fairer tax code, promising more economic freedom and global competitiveness.

To unleash the full potential of family-owned businesses and hardworking Americans, Congress should make the act’s expiring provisions permanent.

Michael D. Bellaman is president and CEO of Associated Builders and Contractors, a national construction industry trade association representing more than 21,000 members.

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