Project Labor Agreements

Hurrah to the Wall Street Journal Opinion page today for taking on Project Labor Agreements.  The Journal’s opinion piece is by far the highest profile criticism of wasteful project labor agreements.  As the editors note, the tide of public opinion is turning squarely against project labor agreements even in those areas that are sympathetic to organized labor.

“As Andy Conlin of Associated Business and Contractors notes, wherever PLAs are subject to popular referendum, they’re rejected.”

The Journal calls project labor agreements

“a form of political bid-rigging that robs taxpayers even in good economic times.”

and calls for them to be outlawed.

What the article implies, but does not state, is that project labor agreements run contrary to the fundamental America values of free enterprises  and reward which is based on merit, not class, rank, or, in the case of PLA’s, political connections.  It is these values that explain why voters of all political persuasion find project labor agreements so distasteful.

Former GOP rising star/policy wonk/excellent Governor, Bobby Jindal of Louisiana,  recently signed into a law a bill banning government mandated PLA’s.  Louisiana is the fifth State in 2011 and the ninth overall to ban the use of PLA’s on government funded projects.

Thanks to aggressive efforts of organizations like the Associated Builders and Contractors and the National Right to Work Committee, State Houses are finally waking up to the waste of taxpayer dollars caused by PLA’s.

Recently, the Regional Plan Association published a report “Construction Labor Cost in New York City,” which highlighted how union construction firms continue to lose market share to merit based firms.  A copy of this report is available for download here.  The report comes on the heels of a recent New York Times article regarding the proliferation of high profile New York City construction projects being built with non-union labor.  The problem according to both the report and the article is simple: union labor is too expensive and union work rules inefficient.

The trend towards more merit based construction jobs does not bode well for unions not only in New York City but nationwide.  As more and more owners grow comfortable with using non-union labor, trade unions will continue to lose power.  This trend could signal the tipping point in the battle between union and merit based construction.  In the end, union firms could be relegated to government awarded projects steered towards union firms through project labor agreements – which themselves have come under increased fire.

One thing is certain, as their market share dwindles, trade unions will undoubtedly become more aggressive in their tactics to protect their turf.  Therefore, merit firms and owners wanting to build non-union should be prepared to do battle where necessary.