Construction Forecast Issue Home

March 30, 2000

Do PLAs deliver what they promise?

By KATHLEEN GARRITY
Executive Director, ABC

Project labor agreements, known as PLAs, have been adopted for publicly financed construction from Massachusetts to California, and have been adopted or are being considered for many public projects in Washington. But, whether they are good or bad for workers, contractors, owners and taxpayers, and what the real purpose and long-term effect of PLAs might be are key questions in a heated debate.

How can limiting bidders to union-only contractors, eliminating nearly 75 percent of Washington’s construction workers, promote cost savings? What makes a union-only project safer than one performed by an open-shop contractor who has access to considerably more workers than the unions? Why is using all taxpayers’ money to support discriminatory practices even considered by public entities? Why are they being used even in light of project results that prove they do not live up to what they purport?

Project labor agreements are contracts negotiated between an owner and a group of labor unions, usually the local building trades council. They require that projects be awarded only to contractors who agree to sign a contract with the union to recognize unions as the representatives of all employees on the job, to use the union hiring hall to obtain most or all of the workers, to require all workers pay union dues or representation fees, pay into union health and pension trusts, and obey union work rules, job classifications and dispute and grievance procedures. The actual terms of the contract vary from one agreement to another, although the Building & Construction Trades Department of the AFL-CIO has standard language it prefers for key provisions.

The building trades unions are strong proponents of PLAs, claiming that they are a good deal for public owners. Not surprisingly, they are also a good deal for the unions. They assert PLAs reduce costs to public owners, guarantee no work stoppages or slowdowns that could delay the project, provide a steady source of skilled labor, produce a higher quality and safer project, and enhance opportunities for women, minorities and apprentices.

Unions also contend these agreements don’t discriminate against open-shop contractors and their employees -- that open shops just have to agree to the terms of the contract and then they can work on the project.

Public owners, have legitimate concerns about how they are going to get their project built, given the billions worth of projects in both the public and private sectors. The unions promise that "If you sign a PLA, it will ensure your project will be done in a timely fashion, on budget." The members of public agency boards and commissions aren’t construction professionals; they just know they have projects to complete. The building trades spend a great deal of time and effort with local public owners, lobbying them on the benefits of PLAs. The unions’ political clout is considerable in Washington, and it is brought to bear to convince public owners’ board and commission members to vote for PLAs.

Those in the area who are construction professionals, both union and open-shop construction firms, are opposed to project labor agreements. Associated Builders & Contractors of Western Washington and Associated General Contractors of Washington, along with their national organizations, oppose PLAs mandated by government bodies.

Because each construction project is unique, it is virtually impossible to compare a project with a PLA versus one without and draw any meaningful conclusions. But, there is ample evidence from projects that have been completed under a project labor agreement that a PLA does not produce what organized labor has promised.

So, why are the building trades unions so keen on PLAs? The number of construction workers who are represented by unions has been decreasing since the 1950’s, only last year increasing from 17.8 to 19.1 percent (Bureau of Labor Statistics). That number is about 25 percent in Washington, based on a city of Seattle auditor’s study. The unions have tried traditional organizing methods (top down and bottom up), none very successfully. So, they are seeking to use public policy to do what they have been unable to do for themselves. PLAs are more about union organizing and regaining market share than sound use of taxpayers’ dollars for capital projects.

Open-shop workers paying fees to unions and into union benefit trust funds will vastly improve the financial condition of unions because the open-shop workers will never vest to receive payments from the trusts.

A healthy industry depends on healthy tension between the open-shop and union sectors. Without a balance, either side can negatively impact the industry. By using public policy to favor unions over the rest of the industry, this balance is interrupted. Since a union-dominated market tends to see prices increase as wage demands increase, the cost of construction, both public and private, will tend to escalate. The long-term best interest for public owners, contractors, workers - and ultimately the taxpayers - is to allow free and open competition for publicly funded projects without the artificial restrictions and requirements of project labor agreements.