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Latest News - November 2014

November 18, 2014
OP-ED: More to Project Labor Agreement than Meets the Eye
Source: Long Beach Post

As reported here, the Long Beach City Council recently and unanimously approved a recommendation from Council members Lena Gonzalez, Robert Uranga, and Al Austin to “direct (the) City Manager to negotiate a Citywide Project Labor Agreement (PLA) with the Los Angeles/Orange Counties Building and Construction Trades Council, and specified Craft Councils and Local Participants.”

Our readers may review the specific Council Item, as well as the support documentation provided, by clicking here and I encourage them to do so.

Although the Council Sponsors’ memo does not define exactly what a PLA is, one can find definitions from any number of sources. According to this source…

“A project labor agreement or PLA is a pre-hire union labor agreement in which the contract terms and labor conditions are established in advance.”

Sounds pretty straight forward. As the previous LB Post article states…

“The goal of this PLA is to put together a workforce with at least 30 percent of workers residing in Long Beach zip codes.”

That also sounds great. Considering Long Beach’s unemployment rate is currently and historically higher than the state or national averages, why would the Council not want to try to enact public policies that might improve that circumstance?

Getting more of Long Beach’s residents back to work is not the only goal of this proposal, however. Another goal, implicit in the very nature of all PLA’s, is to increase the amount of jobs in an area which labor unions control. When unions control the jobs, they likewise control the wages. When they control the wages, they can drive the cost of construction projects up significantly.

According to this source:

“The use of a project labor agreement usually results in cost overruns and higher construction costs for taxpayers. Qualified non-union contractors who wish to make lower-cost bids, and employees who wish to work non-union, are locked out of the project. However, politicians and government officials continue to impose project labor agreements to reward the union officials that fund their political campaigns and keep them in power.”

This adverse potential was at least partly responsible for the federal government once deciding to prohibit federal agencies, and other entities receiving federal aid for construction projects, from using PLA's.

As reported here, last month Maryland’s Prince Georges County actually suspended the PLA it had initially approved for a local public library project. According to Mr. Floyd Holt, Deputy Director of the county’s Office of Central Services…

“…ultimately there wasn't enough local labor" and the costs proposed by union subcontractors had "escalated beyond the budget appropriated for the project." (Emphasis added)

These and other PLA-related challenges had delayed the library construction project for almost a year and the county eventually suspended its PLA, allowing the developer, NARDI Construction, to pay workers “local prevailing wages”, rather than requiring them to pay considerably higher union-scale wages. To be fair, the county has also approved a PLA in the construction of a local fire station and that agreement is still in effect, although construction has yet to commence.

According to this source, last September, “(t)he Associated Builders and Contractors, New Jersey Chapter (ABC-NJ), a trade group representing construction contractors throughout the state…filed suit against Jersey City over the city’s insistence on requiring Project Labor Agreements (PLA) on private construction projects that receive favorable tax treatment.

In filing its lawsuit, ABC –NJ said that…
“…all contractors should receive equal consideration when bidding on private construction projects, based solely on their merits and ability to perform the work. We believe that requiring PLAs on private development simply because the developer receives favorable tax treatment violates state and federal law, is overreaching, and puts thousands of contractors at a disadvantage…”

These and many other PLA-related challenges around the country all seem to offer strong evidence to support the suggestion that even though PLA’s might help a given jurisdiction like Long Beach mitigate its persistent unemployment challenges, they often accomplish this by increasing the overall cost of public construction projects (or those private projects which receive public subsidies) and unfairly limit access to these projects to only union-controlled construction companies and trade organizations.

In other words, PLA’s tend to illustrate how labor unions leverage government in order to protect predominantly labor union interests, rather those of the entire community. 

Incidentally, according to public records, labor unions donated significant amounts to the election campaigns of each of the Council Members who co-sponsored the PLA proposal which the Council then approved 6-2, with Councilmembers Suzie Price and Stacey Mungo dissenting and Dee Andrews absent.

This may or may not be a coincidence. I’ll leave that for our readers to judge.



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