The WSJ published this op-ed Feb. 9, exposing the truth about President Biden’s Executive Order 14063, which requires federal construction contracts of $35 million or more to be subjected to controversial government-mandated project labor agreements. This piece is one of many op-eds and editorials opposing government-mandated PLAs published by the WSJ over the years. View additional coverage on the Biden EO here.
Infrastructure Law Becomes a Biden Union Giveaway
A new executive order grants closed shops a monopoly on contracts greater than $35 million.
President Biden’s repeated promises to be America’s “most pro-union president” are about to cost taxpayers a fortune and undermine critical infrastructure investments.
On Friday, at a packed union hall in Maryland, Mr. Biden signed an executive order making federal construction contracts greater than $35 million subject to project labor agreements. PLAs are project-specific collective-bargaining agreements that steer public-works contracts to union contractors, granting unions a monopoly on projects procured by federal agencies.
Here are three reasons why this administration’s latest union giveaway is a lose-lose for taxpayers and the business community.
First, we’ve seen this before with previous Democratic administrations and state and local lawmakers currying favor with union donors. When government mandates PLAs, taxpayer dollars are wasted on public works because PLAs discourage competition from construction firms that employ the 87.4% of U.S. construction workers who freely choose to not join a union.
PLAs force qualified contractors to replace all or most of their existing employees with workers from union hiring halls and follow inefficient union work rules, creating excessive cost burdens as well as safety and quality risks for high-performing nonunion contractors. Nonunion contractors have built more than half of the federal government’s large-scale construction projects since 2009 and are more likely to be owned by women and minorities.
Second, for the unfortunate token nonunion construction workers allowed to work on a PLA project, a third of their compensation is forfeited to union coffers and benefit plans unless they join a union, pay fees and help prop up multiemployer union pension plans.
Third, while PLAs appropriate wages from nonunion workers, they increase construction costs between 12% and 20%, resulting in fewer improvements to road, bridge, utility, school, affordable-housing and clean-energy projects—and fewer jobs.
The Biden administration’s rationale for bombarding taxpayers with extra costs through anti-competitive labor agreements is shaky. It claims that PLAs improve the quality of construction by employing skilled and highly paid union labor and prevent delays caused by strikes. But all federal construction contracts already are subject to the Davis-Bacon Act of 1931, which requires contractors to pay government-set union-scale wages and benefits on most federal construction projects, with or without a PLA. Construction projects with PLAs have a mixed record of strikes, cost overruns and delays.
Eliminating competition from the majority of experienced local contractors and construction workers is not the answer to building long-lasting federal construction projects safely, on time and on budget—especially when the construction industry is facing a skilled labor shortage of 430,000 workers.
For these reasons, when given the option, federal agencies have mandated PLAs on only 12 of nearly 1,900 large-scale federal construction projects since President Obama signed an executive order in 2009 to encourage the use of PLAs on federal projects on a case-by-case basis.
Likewise, 24 states have laws restricting government-mandated PLAs on local construction projects. Republican governors are fighting back against other recent Biden administration policies pushing PLAs on federally assisted construction projects procured by state and local governments.
A coalition of construction-industry, small-business and taxpayer advocates are asking lawmakers to oppose PLA mandates and sponsor the Fair and Open Competition Act, which would prohibit mandated PLAs on federal and federally assisted construction projects.
Taxpayers would be best served by the adoption of inclusive, win-win policies that help America’s construction industry realize the potential of the Infrastructure Investment and Jobs Act of 2021. We can’t rebuild our nation’s crumbling infrastructure effectively, increase accountability and reduce waste with PLAs.
Mr. Brubeck is the vice president of regulatory, labor and state affairs for Associated Builders and Contractors.