Public Officials Shrugging Public Costs Of Project Labor Agreements

(Dec. 10, 2011) -- The Press Telegram recently ran a story headlined "Long Beach Bridge jobs sought for local workers." Under this headline, the story suggested that with a Project Labor Agreement (PLA) the Port could ensure local hiring, quality construction, labor peace, good wages, good benefits, a project built on time.

If it were only true.

Sadly those assertions cited as facts are more the spinning union PR machines trying to sell Project Labor Agreements enabled by politicians who seek to curry favor with unions by promising outrageous benefits that defy any objective or logical review.

I want to make clear that I am not anti-union. I have been a dues paying member of the UAW and in a past life was on the contract negotiating committee of the Newspaper Guild so I know the benefits of union membership. I also don't begrudge anyone for trying to improve their wages.

But ladies and gentlemen, we are speaking about wasting taxpayer money and a lot of it!

Therefore when Mayor Foster and his Council minions (who I suspect have never been involved personally in a construction project larger then remodeling a bathroom or kitchen) make unsubstantiated claims and start wasting taxpayer money, I get more than a little miffed.

I suggest the headline in the story ought to read, "How the Gerald Desmond Bridge PLA may cost taxpayers up to $90 million or more."

The biggest cheerleaders for PLA are unions and the politicians wishing to curry favor with them. Why are unions pushing so hard for PLA’s? It's not altruism; it's self preservation. Organized labor has been losing ground to nonunion workers in the private sector for years. The pay differential between union and nonunion workers has narrowed substantially and approximately 87% of construction workers are non-union. (Source: United States Dept. of Labor, Bureau of Labor Statistics, Economic News Release, Jan. 21, 2011 bls.gov/news.release/union2.nr0.htm).

Will PLA’s promote labor peace and prevent strikes? I find it hard to believe that PLA proponents can say this with a straight face. Call me cynical but in my opinion this strikes me as a legalized "protection" system. "Sign the PLA and we won't strike but if you don’t you're on your own!" And of course it's the union workers who strike, NOT non-union workers.

Will PLA's save taxpayers money? The notion is absurd. There's considerable evidence that PLA's cost taxpayers money, and that's not surprising since common sense says they cost more money. Below are a number of citations, opinionated to be sure but citing facts, that indicate costs ranging from 12% to 22% or more when PLA's are used:

Cato Journal 2010, "Why PLA's Are Not In The Public Interest"; Wall Street Journal, April 14, 2010, "Crony Contracts"; Boston Globe, June 27, 2010, "Labor Agreements Make No Sense"; Worcester Municipal Research Bureau, May 2001, "PLA's on Public Construction Projects: The Case for and against" [group is non-partisan and non-profit); Beacon Hill Institute Study for Public Policy 2003 Research @ Suffolk University, "The Effects of PLA's in Mass."

Consider what this means in terms of public money: If one applies the low end of the cost estimates, recent LB Airport construction done under a PLA may have cost roughly six million more on the $40 million contract. In addition, the City had to hire a "PLA Compliance Officer" at $88,000 to monitor the PLA. AND the Airport was picketed in Oct. 2011 by a Carpenters union local that says it was discriminated against by not signing onto the PLA (a deal the LA-OC Building and Trades Council cut with the Airport).

Consider that even a 10% additional cost applied to other pending projects -- including the Port's nearly billion dollar Desmond Bridge tear-down/rebuild (for a bridge barely fifty years old) -- and the costs in public money are truly mindboggling.

Yes, I know Mayor Foster and some of his minions claim PLA’s don't cost more money, but in my view they either choose to ignore reality or are absurdly naïve. How in the world can anyone seriously suggest that it can save money on a project if it requires higher wages, restricts competition on bidding, requires union work rules (remember featherbedding), requires contractors to pay union benefits in addition to the benefits they pay their own workers and requires all but a restricted number of core workers be hired out of the union hall? It defies logic.

And another issue worth noting is that PLA’s require all NON UNION job site workers to pay union dues!

Will the PLA guarantee local hiring and high wages? Nope. Federal law prohibits local hiring preferences on jobs they finance so the PLA won’t help this one. And this issue could be worked out as a gentlemen’s agreement with the contractor before the bid is awarded WITHOUT A Project Labor Agreement.

As for the wage issue, California already has a Prevailing Wage requirement (which also isn't in the best interest of taxpayers) that ensures higher wages WITHOUT A PLA.

Will the PLA provide better quality construction and guarantee the job will be completed on time and under budget? Nope. The assertion is preposterous and not supported by logic or real world experiences.

Consider a local example of the performance of a Project Labor Agreement with the Los Angeles Community College District (LACCD). LACCD has been renovating, under Project Labor Agreements, several of their campuses with the proceeds of a $5.7 billion bond program. The Los Angeles Times reported in a six part series on the LACCD construction program that "tens of millions of construction dollars had been squandered on frivolous spending shoddy workmanship and poor planning.:" Ouch!

How does one maximize the chances of having a quality project built on time and within budget? The most important factor to ensure a quality job is to hire an experienced architect, use quality and detailed plans and specifications, utilize an experienced contractor selected by an open bid process and use the team to value engineer construction design and specifications.

It has been my experience that most job delays are caused by hidden conditions not known until one starts digging or demolition, bad weather, owners who make numerous changes and/or are slow to make decisions and problems with city inspections and permits.

The ultimate quality and timely completion of a job are determined by factors not associated with union membership and work rules which can have significant negative impacts on job schedules and budgets.

So what should Long Beach taxpayers do about PLA’s? I suggest taxpayers contact Port officials, the Mayor and Council members and insist that the City follow the lead of then-President George Bush who banned the use of PLAs on federal construction projects (President Obama revoked the ban in 2009) and stop using PLA’s for projects in Long Beach.

If Long Beach doesn't ban PLAs, taxpayers will clealy see that the Port, Mayor Foster and his minions will, as the Cato Institute opines, be "sending a signal that they are willing to subordinate the interests of the general public to those of the unions."

Previously on LBReport.com: Common Sense by Terry Jensen (continuing series):