African American Chamber of Commerce of New Jersey Speaks Out Against Proposed PLA Act Expansion in Joint Statement with ABC New Jersey

0 March 24, 2021  State & Local Construction

In what should come as no surprise, New Jersey’s history of favoring costly and discriminatory government-mandated project labor agreements over sensible policies favoring fair and open competition has reared its ugly head once again.

Pro-PLA lawmakers in the state legislature, including known PLA fanatic Senate President Stephen Sweeney, have shown they continue to value the granting of political favors to organized labor over what is good for the state’s construction workers and taxpayers. They have outdone themselves when it comes to poor policy decisions, now seeking to expand their existing Project Labor Agreement Act, passed in 2002, to apply to all public construction over $5 million in the state, beyond the current policy that applies to only public vertical construction contracts with the same price tag.

The bill, S3414/A5378, has already passed the Senate and been sent to the Assembly, where it has been referred out of committee and is poised to receive consideration by the full chamber. This is the second attempt in as many years to expand PLA mandates, with Gov. Phil Murphy vetoing S1370/A2607 in August, 2020. As far back as 2013, Sweeney and his allies attempted to expand PLA mandates on Hurricane Sandy reconstruction projects, to no avail.

However, this time around, proponents have shifted their strategy, hoping they can dupe voters and industry groups and finally succeed in passing this expansion. In a blatantly political attempt to dampen opposition from minority business groups, which historically stand in staunch opposition to PLAs due to the discriminatory impact they have on largely nonunion minority-owned businesses, they have inserted language purporting to benefit “disadvantaged communities.”

The bill requires any project labor agreement for projects to which this new policy is applicable to contain “all measures and programs to be undertaken to attain the goals…regarding minority group members, members of disadvantaged communities, and women, which may include measures giving them priority in referral and placement from the hiring halls of signatory unions, programs to provide on-the-job or off-the-job outreach and training, and programs to provide incentives for, or otherwise facilitate, their hiring and employment.”

Unfortunately, this language is only meant to perpetuate the Big Lie that PLAs in fact help, not hurt, minority communities and women, and lawmakers were certain this would secure support from those groups. However, that house of cards fell apart on Monday, when the African American Chamber of Commerce of New Jersey spoke out and batted down this lie once again in a joint statement with Associated Builders and Contractors of New Jersey. In the statement, AACCNJ President and CEO John Harmon decried the proposed PLA expansion and pointed out yet again the dangers PLAs pose to these minority communities, which union bosses and their political allies continue to attempt to use while simultaneously disenfranchising them. The statement reads:

Trenton, NJ – March 22, 2021 – Later this week, the New Jersey Assembly will vote on bill S-3414/A-5378, which revises the “public work projects” definition to permit government-mandated project labor agreements on additional categories of jobs. Under the existing Project Labor Agreement Act, if a public works contract is for the construction, reconstruction, demolition, or renovation of buildings over $5 million, it is subject to a government-mandated Project Labor Agreement (PLA). S-3414/A-5378 will extend the PLA requirement to any public works contract exceeding $5 million.

A Project Labor Agreement is between an owner of a specific construction project and applicable labor unions.  It is an agreement that union rules must be followed throughout the course of the project, making it very difficult for non-union contractors to participate. Union wages, union-level medical benefits, union dues, and pension contributions must all be paid, even by a non-union contractor, though that money will not be credited to the non-union employees.  Typically, PLAs are only used on local, state, and federal projects as private corporations find them wasteful and too expensive. According to the U.S. Bureau of Labor Statistics (2019), only 17.8 % of New Jersey’s private construction workforce is represented by a union.

“98% of Black and Hispanic construction companies are non-union shops.  Thus, a Project Labor Agreement greatly limits the opportunities for Black and Hispanic firms,” said John Harmon, Sr., IOM, Founder, President & CEO of the African American Chamber of Commerce of New Jersey.  “The possibility of Black and Hispanic labor is greatly suppressed. It is beyond disappointing when we see diversity clauses added to legislation that is fundamentally harmful to minority communities” Harmon continued.  “The diversity language within this bill is a guise of permissive language that has absolutely no benefit to the African American community within the state.”

“It is beyond disappointing that our legislators continue to support this exclusionary legislation that shuts out 80% of the construction workforce in New Jersey, many of which are minority and female-owned businesses,” said Samantha DeAlmeida, Second Vice President and Government Affairs Liaison. “The Project Labor Agreement Act mandated the creation of a yearly report analyzing the effectiveness of project labor agreements and a comparison of the performance of public works projects with PLA’s to those public works projects without PLA’s. New Jersey has been non-compliant for 13 years, only having followed their law once.”

On July 25th, 2002, The Project Labor Agreement Act was signed into law. Section C:52:38 of the Act required an annual report be provided to the Governor and Legislature detailing the effectiveness of all PLAs entered pursuant to the act. Parameters of the required report were outlined including a requirement that the first report is prepared and submitted on December 31, 2003, and each year thereafter. Additionally, the Act requires that in the 2006 report an analysis should be included detailing the overall effectiveness of the Act. To date, the only study that has been conducted took place in 2010, based on data from 2008.

“This is simply unacceptable. Until the State complies with its own law, it should not be creating additional laws to expand PLAs, without understanding the impact on the State. Our organization which represents over 450,000 workers in the State vehemently opposes this action. We are asking on behalf of our members, taxpayers in the State of New Jersey, and the entire construction workforce that the majority of the construction industry have an equitable opportunity to work on these public projects,” DeAlmeida continued.

Long-time followers of this issue will also remember similar statements made over the years by Harry Alford, CEO of the National Black Chamber of Commerce, in opposition to PLA policies and projects across the country. For example, in response to Nevada’s legislature repealing the ABC-supported Fair and Open Competition Act that prohibited government-mandated PLAs in the state, Alford wrote to Nevada Gov. Steve Sisolak:

“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 PLA.”

There have also been similar statements from other minority groups involved in their own fights in other PLA hotbeds, like John Macklin, past President of the Philadelphia chapter of the National Association of Minority Contractors.

Even leaders from unions representing workers who cannot work under PLAs because they are not members of specific unions designated in typical PLAs oppose this bill. Kevin Barry, director of construction for the United Service Workers Union/IUJAT in Hackensack opposed the bill in his NorthJersey.com March 16 column, New Jersey Project Labor Agreements Are Not For Everyone’s Benefit:

Contrary to popular belief, PLAs don’t actually protect all members of organized labor, and they certainly don’t save the taxpayers’ money.

They unfairly divide union groups into the haves — those certain hand-selected union groups who get the work — and the have nots —  the union workers left adrift with zero opportunity.

PLA rules say any project bidders can only recruit workers from select union hiring halls.  The “most favored union status” instantly eliminates 75% of potential project bidders, regardless of skills, ethnic or gender diversity, or competitiveness of bids.

Some in government have been misled to believe that PLAs are about protecting ALL union workers and providing quality wages and benefits. That is not true. Instead, it’s about protectionism and the affiliations of these 15 elite unions.

The result equals anti-competitiveness, plus inflated project costs, driving up costs for municipalities and taxpayers.

A 2019 study from the Beacon Hill Institute looked at this issue, examining the 107 schools built in New Jersey since 2002, when then-Gov. Jim McGreevey mandated PLAs be used in public school construction, which turned out to be quite a costly debacle .

The study, which examined the construction costs and other variables related to these projects, showed that PLAs raised the final school construction costs by an astounding 16.25%. By their estimates, Garden State taxpayers would have saved $565.1 million, or over $7.1 million for each and every school, if PLAs had not been used.

Just imagine what the state could have done with that extra half-billion dollars.

Because of favoritism — some call it patronage — insiders got fatter gorging on those taxpayer dollars and only got about half of the work done.

Not only has New Jersey been here before in terms of using, and losing out to, PLAs, but the state has even tried to enact the same project expansion criteria.

Former Gov. Chris Christie vetoed it, and even last year, current Gov. Phil Murphy gave a conditional veto to the idea, saying that the types of projects included in this bill are less complex and therefore “less likely to benefit from the efficiencies PLAs yield in bidding and project management.”

As the saying goes, doing the same thing over and over again and expecting a different result is the definition of insanity. So why are we back here again?

Some advocates are attempting to suggest it champions minority- and women-owned businesses, but contracts for state projects already have provisions in place for minority and women’s business development.

The reality is, expanding PLAs will make it harder for women and minorities to get hired. Unless a women and minority owned contractor agrees to hire from one of the PLA-preferred union hiring halls — the alternative is to be cut down and shut out, along with the 75% of bidders who will be regularly excluded from NJ PLAs.

It is time to look past the empty promises and false, flowery language of PLAs, and those working behind the scenes to orchestrate who benefits from contracting.

This 2021 legislation is nothing more than an election year gift to the Building Trades, without any hint of benefitting the people of New Jersey.

It’s time to wake up and say no to expanding NJ-PLAs.

Ensuring that taxpayer-funded construction projects are open to be performed by all workers that are paying for these projects with their own tax dollars should be common sense. More importantly, minority- and women-owned businesses and disadvantaged communities should not be used in trite political games to shore up support for bad policy to line union coffers. We hope that New Jersey legislators and Gov. Murphy will hear this most recent appeal from Harmon and the AACCNJ and make the correct decision by ending this latest PLA charade.

Update: March 26, 2021, the African American Chamber of Commerce of New Jersey and Associated Builder and Contractors New Jersey Chapters issued this joint statement on the New Jersey Assembly’s unfortunate vote passing Bill S-3414/A-5378. The bill has been sent to Gov. Murphy’s desk.

African American Chamber of Commerce of New Jersey and Associated Builders and Contractors New Jersey Chapter Issues Statement On Passing Of Bill S-3414/A-5378 Through State Assembly

Yesterday, the New Jersey State Assembly voted to pass Bill S-3414/A-5378, which revises the “public work projects” definition to require a government-mandated project labor agreement to any public works contract exceeding $5 million. The Bill has now passed both the State Senate and Assembly, moving the legislation to Governor Murphy’s desk.

A PLA is a project-specific collective bargaining agreement unique to the construction industry. Typically, PLAs force contractors to recognize unions as the representatives of their employees on a given project, discouraging merit shop contractors from bidding on taxpayer-funded construction activities. According to the U.S. Bureau of Labor Statistics (2019), only 17.8 % of New Jersey’s private construction workforce is represented by a union.

“It is beyond disappointing that our legislators voted to pass a Bill that shuts out 80% of the construction workforce, many of which are minority and female-owned businesses. 98% of Black and Hispanic construction companies are non-union and this legislation will limit any possibility of these businesses competing on public projects,” said Samantha DeAlmeida, Second Vice President and Government Affairs Liaison.

“We share our disappointment along with Associated Builders Contractors, due to the passage of this Bill, although, not surprising given that this Legislature has advanced every union sponsored Bill that I can recall during this session,” said John E. Harmon, Sr., IOM, Founder, President, and CEO of the African American Chamber of Commerce of New Jersey. “We are not opposed to unions; they perform a significant role in New Jersey’s economy, however, when it comes to taxpayer dollars; there must be a level playing field with fair and open access to compete,” Harmon continued. “There is no doubt that Black People, and Black Business  owners will realize very little benefits if this Bill is signed into Law by Governor Murphy, based on the historical record of minimal inclusion in the trades and public construction projects. Now, our only hope is that Governor Murphy will remember that Black People and Black Business owners held an equitable stake (94%) in electing him to office when the Bill arrives at his desk for signature.”

On July 25th, 2002, The Project Labor Agreement Act was signed into law. Section C:52:38 of the Act required an annual report be provided to the Governor and Legislature detailing the effectiveness of all PLAs entered pursuant to the act. Parameters of the required report were outlined including a requirement that the first report is prepared and submitted on December 31, 2003, and each year thereafter. Additionally, the Act requires that in the 2006 report an analysis should be included detailing the overall effectiveness of the Act. To date, the only study that has been conducted took place in 2010, based on data from 2008.

“Our organization represents over 450,000 workers throughout New Jersey and vehemently opposes this piece of legislation,” said Sam Fiocchi, President of ABC-NJ. “According to the State’s own study, enforcing PLAs on public school projects resulted in increased costs of 33%, and slowed project timelines by 6-8 weeks. We are at a point in time where job growth and workforce diversity should be the priority, not restricting who can bid on jobs. We are asking Governor Murphy, on behalf of our members, taxpayers in the State of New Jersey, and the vast majority of the construction workforce to have an equitable opportunity to work on these public projects,” Fiocchi continued.

About Associated Builders and Contractors: ABC is a national association representing 21,000 merit shop construction and construction-related firms in 69 Chapters across the United States. Our membership represents all specialties within the U.S. construction industry and is comprised primarily of firms that perform work in the industrial and commercial sectors of the industry. ABC NJ is the industry’s liaison to federal, state, and local governments and the public at large. For more information, please visit our website at www.abcnjc.org.

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