States Taking Pro-Jobs Rules Into Their Own Hands

22 Jul, 2011 by Warner Todd Huston

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One of the first things that President Obama did when he walked into the White House was to authorize an Executive Order as a payback to his buddies in Big Labor by implementing project labor agreements (PLAs) for all federal construction projects. That this was his very first action upon taking office shows that he is definitely the president that unions bought and paid for.

A PLA is a set of rules that forces every contractor that works for the federal government to pay union wages, pay union dues, pay into union pensions and operate under union rules even if the company is not a unionized company. PLAs end competitive bidding and cost the government more on every project. These rules are nothing but a freebie, a sop to Obama’s Big Labor pals at the expense of taxpayers and lost jobs.

As the Wall Street Journal says, “PLAs are a form of political bid-rigging that robs taxpayers even in good economic times. Amid today’s limited fiscal resources, PLAs steal money from the likes of education and law enforcement to reward politically connected companies and their unions. They deserve to be outlawed.”

Only about 13% of construction workers belong to unions, and PLAs are a union invention to use their political muscle to organize more companies. Proponents argue that PLAs ensure the speed and quality of construction plans. But PLAs are one of the reasons that Boston’s Big Dig was estimated at $2.8 billion but eventually cost $22 billion. Studies show that projects under PLA contracts on average cost 12% to 18% more than projects awarded by open, competitive bidding. Taxpayers pick up much of this tab.

Fortunately, the states are taking this situation into their own hands and passing various laws and rules to limit or outright outlaw PLAs.

As the Journal notes, several states are “pulling away” from project labor agreements.

Louisiana passed a law this month that prohibits state entities from mandating the use of PLAs. Tennessee, Arizona and Idaho passed similar legislation earlier this year, and Iowa’s Governor Terry Branstad, in one of his first acts after inauguration, signed an executive order ending a state PLA requirement. Legislatures in Maine and Michigan recently passed bills along these lines that governors are expected to sign. These states are joining Utah, Montana, Missouri and Arkansas, which enacted bans in recent years.

Even officials in several heavily Democrat states are realizing that, in this day of deeply in the red budgets, PLAs cost too much and are inherently unfair and un-American.

In Michigan, for instance, Gov. Rick Snyder recently signed Michigan’s historic anti-government-mandated PLA legislation and already reports have emerged that SB165 killed a PLA on a Michigan transit project. Additionally, Maine Governor Paul LePage (R) signed similar legislation (L.D. 1257).

As The Truth About PLAS recently wrote, “PLAs are bad for taxpayers and the construction industry workforce still struggling to come back from more than 15 percent unemployment.”

It is a good thing that the states are taking their own jobs situation in hand and saving their taxpayers money. But we also need to be rid of PLAs on a federal level. Let’s hope this is a grassroots groundswell that will reach Washington D.C.