TWO VIEWS

Project Labor Agreements in which contractors doing work for governments agree to hire union workers are in the news because several local agencies are considering requiring them. These two essays take opposing views of PLAs.

By KEVIN D. KORENTHAL

It’s astonishing that any local government in the Los Angeles area would still consider signing a Project Labor Agreement, or PLA, with construction unions. After all, the PLA on the construction of the new Los Angeles police headquarters failed to prevent “labor disharmony” that just cost city taxpayers an extra $344,000.

But the truth is that PLAs have nothing to do with the phony claims made by unions about their benefits. Instead, PLAs have everything to do with cutting bid competition and raising construction costs for the benefit of a politically powerful special interest group. Every PLA in California negotiated between construction unions and local governments contains provisions meant to discourage non-union contractors from bidding and to discriminate against workers who do not belong to a union.

For example, under PLAs, non-union contractors are required to pay employee fringe benefits into union trust funds instead of their own company benefit plans, with no way for their employees to get their benefits back unless they remain with the union. Non-union contractors are required to obtain workers from union hiring halls instead of using their own permanent workforce. Workers must pay union dues and fees and be represented by a union to work on a project under a PLA. And under a PLA, contractors can only train apprentices from union apprenticeship programs.

What a shame that government officials inclined to support PLAs have not evaluated the staggering implications of how many small businesses in the Los Angeles area employ construction workers who every day make a conscious decision not to join a union. Statistics just released from the U.S. Bureau of Labor Statistics show that in 2007 only 16.5 percent of construction workers in California belonged to a union.

In particular, construction firms that are owned by minorities and women tend to be non-union not surprising considering the lingering reputation of construction unions as the last bastion of white men in the construction trades. The shocking revelation earlier this month of how few minorities are in the Philadelphia building trades unions is a reminder that unions and their apprenticeship programs were conceived in part as a way to control who and how many people entered the construction workforce.

Local governments in Los Angeles should be doing all they can to increase opportunities and choice for people to enter the construction trades. PLAs do the opposite.

Dinging the taxpayers

It’s not just contractors and workers who suffer from the restrictive and discriminatory provisions in PLAs. Taxpayers also pay the price. Studies and anecdotes from throughout the state and country confirm what common sense suggests: PLAs cut competition and thus increase costs.

In 2003, a power plant in Pasadena was originally put out to bid without a PLA. At that time, the lowest responsive bid was $15 million. That bid was rejected so the project could be rebid with a PLA. When the new bids came in two months later, the lower bidder for the power plant was at $17.2 million. The 15 percent increase for the Pasadena power plant matches the 15 percent increase seen in a 2003 study of the impact of PLAs on school construction in the Boston area.

Unfortunately, local governments in the Los Angeles area seem more interested in fulfilling the political demands of the Los Angeles/Orange County Building and Construction Trades Council than in fiscal responsibility and freedom of choice in union membership. Construction unions have filled a political vacuum left by local business organizations uninterested or unwilling to activate their small-business members against local threats to free enterprise and open competition.

When minority business associations throughout Los Angeles County claim that Project Labor Agreements are “not on their radar screen,” they are doing a disservice to their members who specialize in public works construction. Associated Builders and Contractors cannot fight the PLA threat alone.

Local business owners and their representative organizations need to provide a check and balance against a special interest group whose goal is to achieve monopoly control over taxpayer-funded construction.

Kevin D. Korenthal is the director of government affairs for the Los Angeles/Ventura Chapter of Associated Builders and Contractors, which represents commercial, industrial and public works contractors.