Mike Henderson and Debra Schoonmaker: Project Labor Agreements Hurt Local Workers and Make Construction More Expensive — So Why Are Local Politicians Still Pushing Them?

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By: Mike Henderson and Debra Schoonmaker 

Contrary to quotes in a recent Baltimore Sun article detailing the problems surrounding a costly “union-only” provision on the construction of a new library in Laurel, there’s nothing “new” about elected officials – local and otherwise – enacting policy that hurts workers who choose not to carry a union card.

Officially, Union-Only Project Labor Agreements (or PLA’s) date back at least to the earliest days of the Clinton Administration. Unofficially, the concept of union-only dates back significantly further. Back in the day, organized labor represented the majority of construction workers in this country, and union bosses called the shots and controlled nearly every aspect of the project — from manpower and productivity to the availability of materials and supplies. They held sway. But “back in the day” is more than 60 years ago. Today, barely 10 percent of the construction workforce in Maryland belongs to a union.

The reasons today’s construction worker has rejected union membership are both broad and nuanced and would require more space to cover than what we have been allotted. Suffice to say, the political machinations of union rules, of who gets what job and gets paid what wage, frustrates all but the least enterprising employee.  

Unions claim the reason they have lost market share is because of the “ready availability of cheap, unskilled labor and the unscrupulous nonunion employers who hire them.” It was one thing to make that claim in the 1930s, when unions controlled the overwhelming majority of the skilled workforce. But to make that claim today, when nearly 90 percent of craft professionals have rejected union membership, is simply ludicrous.

When a new hospital, data center or apartment building goes up in Maryland, chances are it was built by craft professionals unencumbered by union membership. So when union officials say a PLA is needed to ensure a project will be built “safely, efficiently and cost-effectively,” they are making a claim so bereft of any semblance of facts or hard data that, to an objective audience, they lose all credibility.

Here’s the bottom line: Union-only project labor agreements discriminate against local workers, minority and women-owned firms, and discourage competition, which in turn drives up the cost.

Need convincing? Because unions represent less than 10 percent of the construction workforce, unions often have to import craft workers from outside the region to fully staff a project – particularly on the larger ones.

This reality was brought home just a few years ago with the budget-busting construction of the National’s baseball stadium in Washington, D.C., where union lobbyists were able to convince the city council to require a PLA on the project.

Contained within this agreement were promises by union officials to meet local hiring requirements and funnel D.C., residents exclusively into union apprenticeship programs. Hiring data documented by a 2009 report, The True Cost of the Washington Nationals Ballpark Project Labor Agreement,”found unions were unable to keep those promises. For example, just 26 percent of journeymen hours went to District of Columbia residents, rather than the 50 percent unions promised in the agreement. Additional data revealed that half of the contractors involved in the stadium project hired no new apprentices; of the companies that hired new trainees, only 17 of 56 met the PLA requirement that 100 percent of new apprenticeships go to D.C. residents.

This failure to fulfill their local hiring pledge was poignantly illustrated whenever The Washington Post would run a photo documenting a new phase of the project. These photos would feature craft professionals on the job along with a caption that included their names and towns where they lived. To the chagrin of the D.C. City Council, instead of listing their residency as Washington, D.C., or even neighboring Prince Georges or Arlington counties, the workers were more likely to hail from Ohio, New Jersey and Pennsylvania.

In addition, on the Maryland Department of General Services’ (DGS) Juvenile Detention Center currently under construction in Cheltenham (also under a PLA), more than two-thirds of the contractors on that project are from states other than Maryland — some from as far away as Minnesota.  

Despite the lack of local contractors on the detention center project and the failed track record of other PLA projects in the region, the Prince George’s County Council continues to demonstrate an unshakable fondness for union-only and has passed legislation with a goal to build at least two projects a year under a PLA starting in FY2013.

Prince George’s County’s first attempted PLA was on the construction of a fire station in Brandywine. The PLA attracted only five bidders at a time when projects of similar size and scope were attracting bidders three times that many. The fire station’s lowest bid was 40 percent higher than the engineer’s estimate. After a series of endless delays, the project was rebid with a PLA (again exceeding the engineer’s estimate) and is currently under construction.

On the Laurel library project, officials eventually scrapped the PLA after the contractor they hired to manage the project was unable, under the union-only requirement, to attract a sufficient percentage of local labor and the cost estimates they received from union subcontractors far exceeded the budget.

Sadly, it’s not just Maryland that wrestles with the deleterious effects of PLA’s.  Empirical studies measuring the impact of PLA requirements on school construction costs in Massachusetts, New York, Connecticut, New Jersey and California have demonstrated that PLAs increase costs — typically in the range of 12 to 18 percent — when compared to similar non-PLA projects, even when wages and benefits are controlled by government-determined prevailing wage laws. This is important to understand because on a publicly-funded project (which is where you will find the overwhelming majority of PLA’s), workers – union and non-union alike – receive the same wages and benefits. So the increased cost of construction has nothing to do with whether someone is getting a “living wage,” but it has everything to do with artificially reducing competition.

If there have been any positives to have emerged from the “Great Recession,” it is that there appears to be an increasing awareness on the part of many Maryland politicians that “business as usual” has not necessarily been a good thing for Maryland businesses or their employees.

Those same public officials who now seek redemption don’t need to look any further than to the political chicanery of PLA’s as the kind of anti-small business, anti-worker policies from which they need to distance themselves.

Mike Henderson is president of the Associated Builders and Contractors, Baltimore Metro, and Debra Schoonmaker is president of the Associated Builders and Contractors, Metro Washington.

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