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> Project Labor Agreements
 May
18, 2008
Project Labor Agreements Do Not Create Jobs
 By
Matt Kinley
Chairman of the Board
Long Beach Area Chamber of Commerce
The Long Beach City Council asked City Manager Pat West to
provide an update the proposed Project Labor Agreement (PLA)
with the Los Angeles and Orange County Building Trades Council.
The Chamber strongly opposes the negotiations and the creation
of any PLA.
The proposed PLA would harm small businesses and minority-owned
businesses. Such an agreement would require city management to
accept bids that require that all employees on the construction
project be represented by a union. A contractor in Long Beach
who does not bargain with unions and wishes to be awarded a
construction project under a PLA must jump through a number of
union hoops to comply.
The contractor is often then forced to reduce their workforce to
a handful of employees, hire new workers from the union, pay
representation dues for all non-unionized employees, pay into
union health and retirement funds, and agree to obey union work
rules. Private contractors take a gamble when bidding under a
PLA because, if granted the project, they must work with
unfamiliar employees and adopt different labor practices than
those which have made them successful in the past.
Such rules would vastly increase the cost of public construction
in Long Beach. Most new city construction would cost twenty
percent more than current practices. At a time when the city
can’t afford to pay for its public safety requirements, it is an
extremely poor time to add to such costs.
PLAs are bad for job creation. PLAs involve public or private
entities contracting with a union to provide exclusive
construction labor on one or more projects. PLAs would disrupt
Long Beach non-union contractors’ competitive business practices
and restrict their ability to hire the skilled workers that they
have enjoyed a past employment history with unless these workers
choose to become signatory to a union.
PLAs reduce the number of bidders and dramatically increase the
cost of a project and by implementing a PLA the City Council
will eliminate the right of local residents and businesses from
working in their own city.
The Beacon Hill Institute (BHI) at Suffolk University in Boston,
Massachusetts recently completed an extensive statistical
analysis of the affects of PLAs on bid and final costs of school
construction projects in Connecticut for the period of 1996
through 2003. The study found that PLAs raise the cost of
building schools by 18 percent. BHI concluded, “our key finding
is that PLA projects cost more than non-PLA projects, holding
the effects of project size and type constant.”
Finally, PLA’s will not attract local workers. Union seniority
rules require that the union halls send people by order of
priority
Project Labor Agreements are a bad idea. The City must carefully
consider the cost increases of projects, the likelihood of labor
disruptions, the number of trades and crafts involved in the
project, the size and complexity of the project, and the urgency
of completion. After examining these considerations, we believe
it is impossible for the Council to come up with other written
findings that clearly demonstrate how a PLA will benefit the
project and the interests of the public and the City with regard
to cost, efficiency, quality, safety, and timeliness.
May
15, 2008
Chamber Chairman
Statement on Proposed Project Labor Agreement
Long Beach City Council Meeting
May 13, 2008
Recommendation to request City
Manager to provide an update to the Mayor and City Council on the
status of the proposed Project Labor Agreement with the Los Angeles
and Orange County Building Trades Council.
Good
evening, Mr. Mayor and members of the City Council.
I am Matt Kinley, Chairman of the Long Beach Area Chamber of
Commerce.
I am here tonight, on behalf of the Chamber, to state our strong
opposition to Project Labor Agreement negotiations.
The Chamber believes that any PLA which contains a union-mandate
would hurt employers, employees and this city.
First, Project Labor Agreements have been shown to add as much as
20% in costs to constructions projects. When we can’t afford to
properly fund our health, safety and libraries, the city should not
be looking to add costs to city construction projects.
PLA’s with a union-mandate component have been shown to actually
decrease the number of local bids as well as limit the amount of
local workers that a construction company may hire.
These types of PLAs discriminate against employers and employees,
requiring them to be in a union. They actually harm small business,
which are far less likely to be union shops.
Unions will contend that PLAs with a union-mandate would guarantee
labor peace at site and timely completion of projects.
The Chamber believes, and, studies have proven these claims to be
false. In fact, many construction projects under PLAs experience
serious delays due to work stoppages and projects going over budget.
We urge the city manager and the council to consider carefully any
Project Labor Agreement and to oppose one with a union-mandate,
which would hurt the economic vitality of our city.
Thank you.
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