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Executive order imposing PLAs draws industry ire

By |  February 7, 2022

AGC

The Associated General Contractors of America (AGC) and the Associated Builders & Contractors (ABC) came out against President Biden’s executive order that seeks to impose project labor agreements (PLAs) on many federal construction projects.

According to the AFL-CIO, PLAs are collective bargaining agreements between building trade unions and contractors that govern terms and conditions of employment for all craft workers – union and nonunion – on a construction project.

“It’s hard to explain why the president would choose to impose government-mandated project labor agreements to solve a problem that doesn’t exist,” says Ken Simonson, AGC’s chief economist. “Construction workers are among some of the highest-paid workers in the economy, earning 10 percent more than the average worker in the U.S. Their pay rates have continued to climb 5.1 percent as labor shortages have made this a workers’ market.”

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Ben Brubeck, ABC’s vice president of regulatory, labor and state affairs, says the order will exacerbate the construction industry’s labor shortage, increase construction costs and reduce opportunities for local contractors and skilled tradespeople.

“This anti-competitive and costly executive order rewards well-connected special interests at the expense of hardworking taxpayers and small businesses who benefit from fair and open competition on taxpayer-funded construction projects,” Brubeck says.

“Research has demonstrated that government-mandated PLAs increase construction costs by 12 to 20 percent, which results in fewer construction projects and improvements to roads, bridges, utilities, schools, affordable housing and clean energy projects – and the creation of fewer jobs,” Brubeck adds. “PLAs steer contracts to unionized contractors and workers at the expense of the best-quality nonunion contractors and workers who want to compete fairly at a price best for taxpayers.”

Brubeck and Simonson both say the president’s order will adversely affect the more than 85 percent of construction workers who do not belong to a union. Simonson says this is because firms subjected to PLAs are required to pay both employees’ benefits and those of the union involved in the agreement.

“Since few firms can be competitive while paying two sets of benefits, the order effectively locks out most workers from participating in federal constriction projects,” Simonson says. “Limiting the number of firms that can compete for federal construction projects and imposing agreements that are often more costly than existing collective bargaining arrangements will inflate the cost of construction projects at a time when firms are already struggling with labor shortages and skyrocketing materials prices.”

Both AGC and ABC are pushing back against the order and asking others to oppose it and PLAs, as well.

“Excluding the vast majority of construction workers, inflating the cost of federal construction and working against the interests of taxpayers is bad politics and even worse policy,” Simonson says. “Which is why we will explore every possible avenue as we push back against the needless and economically damaging new executive order.”

Featured photo: P&Q Staff

Jack Kopanski

About the Author:

Jack Kopanski is the Managing Editor for Pit & Quarry and Portable Plants. Kopanski can be reached at 216-706-3756 or jkopanski@northcoastmedia.net.

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