A Project Labor Agreement is a trade-off between the project owner (in this case, the state) and the people building the project. Basically, the state agrees to hire all workers on the project through specified union halls, and non-union workers have to pay union dues while on the project. In exchange, the state gets a guarantee of labor peace – no strikes, slowdowns, etc. – and also sets wages for the life of the project so that it won’t be hit with unanticipated wage increases.
What this does not mean is that non-union contractors are prohibited from bidding on these projects. It may mean that, in practice, they are unlikely to win them. But they can still bid. Even the PLA-hating Beacon Hill Institute describes the situation this way (PDF, p. 7):
open-shop contractors contend that their competitive advantages are nullified by the PLA. The result is that in practice, if not in principle, they are unable to bid competitively on jobs that have a PLA requirement.
Furthermore, the Supreme Judicial Court held a decade ago that PLAs are acceptable only in certain kinds of construction projects.
We do not articulate a bright-line, litmus-test standard for determining when the use of a PLA is appropriate. Nor do we conclude that a PLA will be justified in all, or even most, circumstances. A project must be of substantial size, duration, timing, and complexity, and the interplay between all four of these factors must be considered. It may be that, in certain cases, the sheer size of a project warrants the adoption of a PLA. In most circumstances, the building of a single school will not, in and of itself, justify the use of a PLA.
No word from Charlie Baker as to how much of the $1.6 billion in public construction projects would actually be potentially subject to PLAs, but it seems certain from the SJC’s decision that it’s considerably less than 100% of it.
So, do PLAs favor union contractors? You bet. And there’s an interesting policy discussion to be had about whether or not that’s a good thing. But let’s not put out disinformation about what PLAs actually are, and what they actually do.
There are arguments, as David notes, on both sides of the issue. There are few conclusive studies on the impact of PLAs. To the extent that they prevent strikes on public projects, I would think they help save time and money.
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p>Baker’s contention that PLAs add to project costs appears to be based largely on a Beacon Hill Institute study. The Beacon Hill Institute is solidly anti-union, however, and isn’t exactly an unbiased source of information.
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p>This is a complex area of construction law and management; and calling for an outright ban on PLAs is, surprising as it may seem, just partisan politics.
Well it sure is good to know that open shop contractors can bid under a PLA even though they have no chance of getting the work. I’m sure they’re eager to go through that exercise. Bottom line is that in practice PLA’s lock out 80% of the state’s construction workforce. Since even the building trades have trouble convincing most government officials tht they should pay a 15% premium for construction in the current fiscal climate, they have moved on to more subtle ways to lock out the open shop, like apprecticeship requirements and laughably named responsible employer ordinances.
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p>Formalities out of the way, the point of my post is not to praise PLAs, nor to bury them, as the saying goes. I just wanted to correct what seemed to me a very misleading characterization of what they actually are. What’s your basis for the 15% figure? That’s considerably higher even than Baker’s or Beacon Hill’s.
… prevailing wage provisions in PLAs? If so the 15% he’s talking about could be the difference between a non-union low bidder’s labor cost and the labor cost of a union shop or a non-union shop that has to adjust it’s wages for the project to comply with the PLA. Although 15% seems very high – it might be 15% of wages, but not 15% of overall project costs.
Gee, you’ve mentioned just about every open shop critique of labor unions except for the prevailing wage, which requires public construction projects to pay, effectively, union pay rates? Why leave that out? Is it because it means that there is no difference in pay rates between open shop and union shop contractors because they all have to pay the same rates? Yes, union construction workers do make 15% more than non-union open shop construction workers, but only on private jobs. There is no wage differential on public jobs – so where are the savings? This is all BS. Won’t save a dime. Complete crap. What would you expect from the folks who screwed us taxpayers with their Big Dig fincancing schemes. Charlie Baker and Charles Chieppo are the Enron-Goldman Sachs of the Big Dig. And they have the nerve to lecture us. They really have no shame.
… prevailing wage.
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p>You’re in the rather odd position of arguing that the right to pay less in wages places you squarely in the crosshairs of an oppressive government. Now where would that kind of thinking come from? Insofar as unions care about testing, training, mentorship and responsible licensure, in addition to good old-fashioned elbow grease, then 15% becomes, not a “premium”, but the margins between professionals and wage slaves. And anybody who refuses to join a union for political and/or ideological reasons cares more for the political than the professional… And I wouldn’t hire them.
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p>To put it simply: if you wish to pay less in wages, you are, de facto, pricing yourself out of some sectors of the market… Pay your workers only minimum wage, and see how many big construction projects you’re invited to bid upon.
company operates a union and non-union shop. Holyoke for example has Daniel O’Connell’s Sons and Western Builders located in the business mecca of Granby. Depending on the job, they can offer and bid non-union or union labor.
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p>I feel sorry for businesses and all having to pay union wages, but every difficulty is an opportunity.
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p>The real electoral question: who’s more stupid: Cahill or Baker?
Various studies by Beacon Hill Institute and the Worcester Regional Research Bureau place the PLA premium at 12-20%, so 15% seems a fair estimate.
Well, I wouldn’t exactly call Beacon Hill a “fair and balanced” source when it comes to PLAs. They’ve had a major axe to grind on that one for years. Don’t know about the WRRB.
I don’t think it means what you think it means..
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p>From m-w.com (merriam-webster dictionary website):
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p>So a wage can’t, simultaneously, be ‘prevailing’ and ‘a premium’. It is interesting that you think it can be…
Here’s Charlie’s pension reform proposal:
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p>”3. Implement real pension reform – $50M in savings
The current pension system is unaffordable, unaccountable and unsustainable. It is unfortunate that it took three years for the current Governor to file a pension reform bill and the Treasurer believes that the current system is working fine as it is. The fact that taxpayers and future pensioners face an unfunded liability that exceeds $22 billion didn’t happen by accident. Reforms must be enacted now to control costs and eliminate overly generous payouts for state workers.”
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p>That’s it. That, folks, is Charlie Baker’s pension reform proposal. Forgive me for asking, but what exactly is Charlie Baker proposing? What reforms? What overly generous payouts for state workers? After all that has been written about pension abuse, Charlie Baker cannot come up with even one single concrete reform, yet he’s claiming $50 million in savings. Sounds to me like he back at his Big Dig accounting tricks.
is that everyone’s been moaning about the MBTA’s 23-and-out pension perk for years and years. Who finally got rid of it? Hint: it wasn’t Bill Weld, Paul Cellucci, or any other GOoPer.
I think that Patrick and we Dems haven’t done a really good job of telling the story. IIRC, it’s now 25/55 (25 years or more, 55 years old or older) but I could be mistaken.
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p>Are we not talking about it because
a. we don’t have ourselves organized
b. it’s confusing
c. it’s not “locked in”
d. it pisses off union voters
e. while better, it still doesn’t sound, well, fair (only 25!)
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p>???
The 15% premium (at least) associated with PLAs has nothing to do with prevailing wage rates (p-rate).
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p>As most here know, the p-rate is tied to the union rate and is established for all MA public works projects. The 15% + premium is a byproduct of the limited competition that results from PLAs.
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p>For those who scoff at the Beacon Hill Institute’s studies on the matter or the study conducted by the Worcester Regional Research Bureau, perhaps you might review the history of the Fall River school project, which clearly illustrates that PLAs are anti-competitive and as such, raise the cost of projects significantly, negatively impacting taxpayers.
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p>In 2006, the City of Fall River embarked on a five-school building project. Mayor Edward Lambert prequalified (as stipulated by law) 76 subcontractors, clearing the way for them to bid on the project.
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p>At the 11th hour, Lambert imposed a union-only PLA. The result: less than half the prequalified bidders (just the union subcontractors) submitted bids that far exceeded the city’s budget. In fact, a few subcontractor bids came in 100% over budget.
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p>Here’s a perfect case study why PLAs cost more: Of the five electrical subcontractors to prequalify, only one was union. When Lambert imposed the PLA, this union subcontractor submitted a bid 100% over budget. Unable to afford the bid, Lambert sought and received special permission from the Attorney General’s office to allow any union electrical subcontractor – not just prequalified – to bid. Faced with competition, the previous lone bidder managed to drop his bid by $1 million just three weeks after submitting his first bid.
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p>What changed? Competition was introduced.
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p>After months of receiving budget-busting bids, Lambert finally relented and rescinded the PLA. The number of bidders doubled and prices plummeted. Municipal finance professionals conservatively estimate that the city saved $8.5 million from lower bids.
Otherwise, well, you know.
http://www.beaconhill.org/BHIS…
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p>Getting public construction done correctly is hard enough without restricting the contractors who are going to bid on the project to union only.
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Again with Beacon Hill. Isn’t the info about Fall River available from a truly impartial source?