Equal opportunity has long been a cherished ideal in America. Yet state government is engaging in unequal contracting practices. Governor Rendell’s administration is mandating discriminatory Project Labor Agreements (PLAs) on public construction projects across Pennsylvania.
What are PLAs? They are agreements between government and state contractors that contain stipulations beneficial to unionized labor, such as: requiring employment of unionized workers, use of union apprentice programs, and payments into union funds.
PLAs are a hot topic nationally, with President Obama promulgating an executive order to encourage federal agencies to issue these contracts. They have also received special attention in Pennsylvania, with the Department of General Services (DGS) issuing a series of PLAs on prison projects.
The most egregious PLA in Pennsylvania entails a $400 million correctional facility being erected in Montgomery County. All bidding contractors must assent to hundreds of pages of biased collective bargaining agreements. Consider, for example, the pre-arranged agreement for the Iron Workers Union. Contractors must pay into the union’s pension fund, annuity fund, health fund, apprentice fund, vacation fund, welfare fund, and other funds. In total, the contractor must pay $30.77 per work-hour to these funds for all employees, regardless of union membership! Without a PLA, the cost to taxpayers would be much less.
PLAs such as this are nothing more than political kickbacks to Big Labor. While PLAs benefit unions and politicians granting them, they do so at the expense of taxpayers, contractors, and minorities:
- Taxpayers – A September study by the Beacon Hill Institute (BHI) reveals that PLAs increase construction costs 12 to 18%. Additional studies on various PLAs by Ernst and Young, the Public Interest Institute, and others corroborate these increased costs for taxpayers.
- Contractors – The Bureau of Labor Statistics reports that only 15.6% of the construction industry is unionized, which means over 80% of construction workers are discriminated against in PLA contracts. This is no trivial matter; while PLAs are few in number, they are applied to the largest and most expensive government projects.
- Minorities – It is commonly observed that union membership is lacking in minority representation. Such is the case in Philadelphia; investigative journalist Tom Ferrick Jr. reveals that only 26% of construction employees in the city are minorities. This is a severe underrepresentation, considering that 55% of the city’s population is minority.
Reasons for opposing PLAs are many, and leading figures are now taking a stand. John Macklin, president of the Philadelphia chapter of the National Association of Minority Contractors, has attacked PLAs on grounds of discrimination. The Associated Builders and Contractors’ (ABC) Pennsylvania Chapter has filed numerous lawsuits against DGS for its recent PLA contracts. Even state legislators are now taking a stand, with Reps. John Bear and Stan Saylor introducing legislation (House Bill 2010) that would ban PLAs in Pennsylvania.
It should be noted that these critics are not attacking the concept of unionized labor itself; they are merely saying that government should not tailor contracts for organized labor to the exclusion of non-union competitors.
This message has had limited success thus far. The DGS has rescinded PLA provisions in two prison projects – a $200 million project in Centre County and a $17 million project in Forest County. These projects were previously open to PLA bids, but all offers were rejected. Maybe the DGS realized Pennsylvania taxpayers can’t afford PLAs.
Whatever the case, it is clear that the PLA injustice must end, whether by legislation or litigation. The political pandering must stop. Pennsylvanians should take a stand and send the message that our state is an equal opportunity employer.