The Truth About Project Labor Agreements

The National Black Chamber of Commerce CEO Harry Alford had some strong words about discriminatory project labor agreements and prevailing wage laws in a March 17, 2020, letter to Virginia Governor Ralph Northam (D), in response to recently passed Virginia legislation that would allow the Commonwealth and its localities to require PLAs on taxpayer-funded construction projects and repeal a statute prohibiting government-mandated PLAs on state, local government and state assisted construction projects:

The effect of government-mandated PLAs is that they discourage competition from Virginia’s qualified contractors and the 97.8% of Virginia’s construction workforce that chooses not to join a union to rebuild their communities. Government-mandated PLAs are opposed by the NBCC because almost all minority-owned contracting firms are not affiliated with unions. African American-owned contracting firms are typically small businesses and employ their own core workforce of skilled construction workers who are not unionized and are generally more diverse than construction workers coming from union hiring halls.

Despite efforts of various construction trade unions to diversify their membership over the years, they simply are not recruiting enough African American members into the trades. In addition, claims that a PLA can be a tool to ensure minority construction workers and businesses are used on a public project is a farce. These goals can be achieved via contracting and workforce requirements independent of a discriminatory PLA mandate.

The entire letter is worth a read, especially in light of the ongoing Build Virginia Local campaign opposing controversial government-mandated PLA policies advanced by Democrats in Richmond as payback to their out-of-state union donors.  It isn’t a coincidence that 46 construction unions gave a total of $1.68 million in direct contributions to state Democratic party lawmakers during Virginia’s 2018-2019 election cycle. 62% of the 2018-2019 cycle’s contributions came from out-of-state construction unions with a vested interest in getting Virginia’s lawmakers to stifle competition from local, qualified and diverse businesses.

The letter also drops this gem about the racist origins of  the federal Davis-Bacon Act and copycat state prevailing wage laws:

Finally, the NBCC is also deeply concerned the General Assembly passed legislation requiring government-determined prevailing wage mandates on all construction projects exceeding $250,000 procured by state entities and allowing local governments to require prevailing wages on local public works projects like schools, hospitals and affordable housing. The NBCC opposes the practice off orcing contractors to pay wages and benefits at rates determined by the U.S. Department of Labor via the federal Davis-Bacon Act. The NBCC opposes the Davis-Bacon Act and prevailing wage laws enacted in 27 states because these federal and state laws remain one of the last vestiges of Jim Crow.

The true history of the Davis-Bacon Act was that it was originally enacted as protectionist measure for white northern workers against southern black labor. Today, Davis-Bacon continues to discriminate against nonunion firms, many of which are minority-owned while few minority firms are signatory to unions. The truth is the Davis-Bacon Act drives up construction costs and leads to less construction industry job creation for African American businesses and fewer schools, roads and bridges for our community.In addition, the U.S. Government Accountability Office and the DOL’s Office of Inspector General have concluded the U.S. DOL’s wage determination process is unscientific and fundamentally flawed, because it typically sets rates that are anything but local, prevailing, timely or accurate.11

Eliminating burdensome regulations like prevailing wage laws and allowing employers to pay wages and benefits determined by the free market is a win-win for taxpayers and minority businesses. The solution to underemployment and unemployment in the African American community is free enterprise and entrepreneurship. Government-mandated PLAs and prevailing wage laws undermine both cornerstones and harm nonunion African American firms and construction workers disproportionately and will lead to less economic development and prosperity in the Commonwealth.If you are serious about fulfilling your commitment to creating contracting opportunities for Virginia’s small, women, and minority-owned (SWaM) businesses,12 you must veto PLA (SB 182/HB 358) and
prevailing wage (SB 8/HB 833) mandate legislation.