Pay to PLA

Industry groups call for infrastructure program that ends policy favoring unions

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Industry groups and labor watchdogs want to see the Trump administration eliminate wage rates that favor union labor as part of the $1.5 trillion infrastructure plan.

President Donald Trump has proposed a $200 billion federal spending program and called on a further $1.3 trillion in investments from private, state, and local resources to boost infrastructure projects. He has pledged to roll back onerous regulatory and environmental reviews that have slowed large-scale building projects in the past as part of the program.

"We built the Empire State Building in just 1 year—is it not a disgrace that it can now take 10 years just to get a permit approved for a simple road?" Trump said in his State of the Union address. "Any bill must also streamline the permitting and approval process—getting it down to no more than two years, and perhaps even one."

Ben Brubeck of Associated Builders & Contractors, an industry group that represents mostly non-union construction employers, said the president should also take aim at government-mandated Project Labor Agreements (PLAs), which force contractors to hire most or all construction labor from union hiring halls, follow union work rules, and require labor to join a union or pay union dues or fees. He said such agreements discourage competition from qualified contractors and American construction workers not affiliated with unions deliver "less bang for their buck for taxpayer" than projects with open bidding, and that such agreements can hinder development as badly as lengthy regulatory approval processes. He cited a Beacon Hill Institute study that found PLAs can increase costs on projects by as much as 13 percent.

Almost all federal and federally associated projects are already subject to the Davis-Bacon Act, which typically requires contractors to pay wages and benefit rates on a union scale.

"There really needs to be some more efficiencies found in infrastructure. Projects are mothballed for far too long because of environmental review and other permitting processes," Brubeck said. "The effect on these arrangements is they discourage competition for non-union companies."

One of President Obama's first acts in office was to sign an executive order recommending PLAs for any federal contract valued at more than $25 million, reversing the Bush administration's policy eliminating PLAs. Unions have lobbied lawmakers to preserve PLAs in federal spending, while the AFL-CIO demanded that any infrastructure plan "maintain longstanding federal policies that protect working people with high labor standards to ensure that infrastructure investments create good jobs." The Trump administration, which has rolled back numerous Obama-era labor policies that favored unions, has yet to take action on PLAs. The White House's 53-page guidance for the infrastructure plan did not mention PLAs, nor did it get into specifics about wage rates.

Republican leaders have taken aim at such agreements at the state level. Wisconsin, Iowa, and Missouri signed legislation barring PLAs in 2017. Twenty-four states currently have similar bans. Patrick Semmens, spokesman for the National Right to Work Foundation, said that project labor agreements favor interest groups over the public that is supposed to be served in taxpayer-supported projects.

"The winners of government contracts should be selected on merit, not based on whether or not the contract will result in more forced union dues collected by union bosses who can then use those funds to back their favored politicians," he said.

Brubeck said Trump's experience as a developer should inform his decisions in setting policy. He praised the White House for aiming for "transformative" changes to the American landscape, rather than the "shovel-ready" approach the Obama administration took to the construction industry during the $700 billion stimulus plan.

"It's exciting to have a developer-in-chief in the White House that speaks our language and I think he realizes the state of American infrastructure and the investment needed," he said. "This isn’t a quick employment fix for the industry. This is focusing on transformative projects."

The House Committee on Transportation and Infrastructure approved the Trump administration's framework for the proposal on Wednesday. Congress is now debating the details of the plan and hopes to put forth a final bill by the summer.

Update Feb. 20, 11:26 a.m.: This post has been updated to clarify how PLAs affect government contracting.

Bill McMorris   Email Bill | Full Bio | RSS
Bill McMorris is a staff writer for the Washington Free Beacon. He joins the Beacon from the Franklin Center for Government and Public Integrity, where he was managing editor of Old Dominion Watchdog. He was a 2010 Robert Novak Fellow with the Phillips Foundation, where he studied state pension shortfalls. His work has been featured on CNN, Fox News, The Economist, Colbert Report, and numerous print publications and radio stations. He lives in Alexandria, Va, with his wife and three daughters. His Twitter handle is @FBillMcMorris. His email address is mcmorris@freebeacon.com.

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