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Union-Only PLA Studies |
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Measuring the Impact of Union-Only Project Labor
Agreements
"The examination of the construction labor
market and the facts concerning the postures of organized
labor, unionized construction, and their political supporters,
as well as the cases in various states, demonstrate
that the claimed advantages of government-mandated PLAs
are not supported by factual evidence … "
(Dr. Herbert R. Northrup, Journal of Labor Research,
Winter 1998)
Construction Costs
By limiting bidders and forcing construction users
to use union workers who represent less than 15 percent of the workforce, pay into union coffers,
and follow outmoded and inefficient union work rules,
union-only PLAs drive up costs on construction projects.
Far from their claim of eliminating waste, union-only
contracts guarantee it, by forcing open shop contractors
to adopt inefficient union work practices and use unfamiliar
workers.
- A September of 2003 study by the Beacon Hill Institute
(BHI) at Suffolk University in Boston analyzed Massachusetts
school construction projects and concluded that bid
prices on projects with a union-only PLA were on average 14 percent
higher than bid prices on non-PLA projects. In addition,
the average actual cost of construction was 12 percent
higher for projects executed with a PLA.
Project Labor
Agreements and the Cost of School Construction in
Massachusetts
- In September of 2001, the firm of Ernst & Young
was commissioned by Erie County in New York to analyze
a union-only project labor agreement on the Erie County Construction
Project. Ernst & Young concluded that "bidder
participation was diminished because the county chose
to utilize a union-only PLA. Further, the use of PLAs adversely
affects competition for publicly bid projects to the
likely detriment of cost-effective construction. Our
research revealed that the use of PLAs strongly inhibits
participation in public bidding by non-union contractors
and may result in those projects having artificially
inflated costs." They went on to say that "there
are no apparent valid economic justifications for
the continued use of a PLA on Phase II of the Project."
Erie County Courthouse Construction
Projects: Project Labor Agreement Study
- The Worcester Municipal Research Bureau released
their study "Project Labor Agreements on Public
Construction Projects: The Case For and Against"
on May 21, 2001. The study concluded that "PLAs
tend to constrict the number of bidders on a project
compared to those without PLAs, and are likely to
reduce the savings to the public that would accrue
if nonunion contractors who are employed were allowed
to follow their customary methods."
PLAs on Public Construction
Projects: The Case For And Against
- A study commissioned by the Jefferson County Board
of Legislators concluded that "[t]he additional
costs estimated with the use of a PLA could range
upwards of $955,000. With the loss of even one general
contractor from the bidding [as a result of the union-only PLA],
the cost increase could approach $200,000." On
this estimated $14 million project, this would mean
a cost increase of upwards of 7 percent (September
2000).
Analysis of the Impacts
on the Jefferson County Courthouse Complex through
Project Labor Considerations
- The Clark County School District (CCSD) retained
Resolution Management to perform an objective study
of the use of union-only project labor agreements on School District
Projects. In an independent and unbiased study, they
found "no compelling reason for CCSD to enter
into PLAs for school construction at this time."
Task Order No. 99-1:
Project Labor Agreement (PLA Study)
- A study of public-sector PLAs concludes, "While
assuring that projects are performed union, they provide
little, if any, savings to the [public] owner. In
addition, they provide little, if any, competitiveness
to the union contractor and may be disruptive to other
owners and contractors involved in the local construction
market." It concluded that, "restraints
imposed by government-directed PLAs are political
decisions which have little or no economic rationale,
nor can they be defended on grounds of labor peace,
enhanced safety, or other such reasonable criteria."
(Dr. Herbert R. Northrup, Journal of Labor Research,
Winter 1998).
Government-Mandated Project
Labor Agreements in Construction: A Force to Obtain
Union Monopoly on Government-Funded Projects
- A comparison of bids for a Middletown, Connecticut,
school renovation proposal demonstrated a union-only PLA would
have added 20 percent to the cost. The town initially
issued 72 sets of bid specifications with a PLA, and
received only four responses, with the lowest bid
($9.1 million) at $600,000 over the project's $8.5
million budget. When the project was re-bid without
the PLA, it received more than double the number of
bids, with the lowest at $7.6 million, producing a
savings for the town of $1.5 million.
Middletown,
Connecticut Snow School Case (1996)
- A study of the taxpayer costs for Roswell Park Cancer
Institute in Buffalo, New York, assessed bids for
the same project both before and after a union-only PLA was temporarily
imposed in 1995. It revealed that there were 30 percent
fewer bidders to perform the work and that costs increased
by more than 26 percent.
Roswell Park Cancer Institute
Letters
- A U.S. General Accounting Office (GAO) report, issued
May 5, 1998, demonstrated that it is nearly impossible
to show any savings or increased quality derived from
the use of union-only project labor agreements, largely because
of the difficulty in finding two identical projects
with or without a PLA to study.
Project Labor Agreements: The Extent of Their Use
and Related Information
Work Opportunities
- The
U.S. Department of Labor's Bureau of Labor Statistics
(BLS) Jan. 27, 2005 report states that 14.7 percent
of the nation's construction workforce was unionized
in 2004. Therefore, since union-only PLAs effectively
preclude open shop companies from working as such
on a project, PLAs discriminate against the majority
of companies and the 8.5 out of 10 workers who choose
not to join a union. These workers' hard-earned tax
dollars fund these projects.
- Ernst & Young's September 2001 study stated
that their "research revealed that the use of
PLAs strongly inhibits participation in public bidding
by non-union contractors and may result in those projects
having artificially inflated costs."
- In his analysis of government-mandated PLAs, Dr.
Herbert Northrup concludes, "To exclude or to
limit the right of open-shop contractors, who have
won 75-80 percent of the national construction dollar
spent, from the opportunity to bid on public financed
construction, and thus to limit or to eliminate their
participation in construction paid for by taxpayers
unless they are willing to work as if they were unionized
contractors is palpably both unfair and contrary to
sound public policy" (Journal of Labor Research,
Winter 1998).
- In addition, minority
and women's groups have been vocal opponents of union-only
agreements. The American Asian Contractors Association,
the National Association of Women Business Owners,
the National Black Chamber of Commerce and the Latin
Builders Association are among the groups that have
gone on record as opposed to PLAs. The National Black
Chamber of Commerce described PLAs as "anti-free-market,
non competitive and, most of all, discriminatory."
These groups represent workers that are significantly
underrepresented in all crafts of the construction
union shops. Encouraging PLAs on public works projects
will make it even more difficult for minority-owned
contractors to compete.
Productivity and Quality
Union-only PLAs do nothing to guarantee better quality,
skills, or productivity. Merely having a union status
does not guarantee better performance as there is no
evidence that union labor is more skilled than open
shop. Some of the largest and most successful projects
completed every year are built on time and within budget
with open shop companies and without PLAs. The union
label is not needed for construction to be of top quality.
Project quality is governed by voluminous procurement
laws and regulations, project specifications, and bonding
requirements. Safeguards against shoddy work practices
and stiff market competition also prevent unqualified
companies from competing on public contracts. Moreover,
quality lies with the worker's individual motivation
and performance. Quality is not determined by race,
creed, national origin, gender, or labor affiliation.
- Although the unions promote PLAs by claiming open
shop contractors do not have the capability of managing
very large construction jobs, a study by Dr. Herbert
R. Northup concludes that, "the facts demonstrate
that open-shop contractors can and do successfully
both perform and manage large projects." (Journal
of Labor Research, Winter 1998).
- After performing a thorough study of PLAs in the
New York area, Ernst & Young (September 2001)
concluded that "[t]here is no quantitative evidence
that suggests a difference in the quality of work
performed by union or open shop contractors."
Safety
Union claims are wrong about unions' safety records and performance. There is no statistical evidence to support this claim.
In fact, OSHA statistics consistently demonstrate that
open shop craftspeople have better safety records and
lower fatality rates than that of their union counterparts.
- 2004 research conducted by Clemson University of construction
industry fatalities between 1994 and 2002 concluded
that the nonunion workers experienced 12.8 percent
less fatalities per 100,000 workers than union workers.
List of Studies
Project
Labor Agreements: Union Monopoly in Public Works Construction
- Carl F. Horowitz, National Institute for Labor Relations
Research (April 2005)
Project Labor Agreements and the Cost of Public
School Construction Projects in Connecticut -
Paul Bachman, Jonathan Haughton and David G. Tuerck,
Beacon Hill Institute at Suffolk University (September
2004)
Project Labor Agreements and the Cost of Public
School Construction Projects in Massachusetts
- Paul Bachman, Jonathan Haughton and David G. Tuerck,
Beacon Hill Institute at Suffolk University (September
2003)
Union-Only Project Labor Agreements: The Public
Record of Poor Performance - Maurice N. Baskin
(2001)
Erie County Courthouse Construction Projects:
Project Labor Agreement Study - Ernst & Young
(September 2001)
Project Labor Agreements on Public Construction
Projects: The Case For and Against - Worcester
Municipal Research Bureau (May 2001)
Government-Mandated Project Labor Agreements in
Construction: The Institutional Facts and Issues and
Key Litigation: Moving Toward Union Monopoly on Federal
and State Financed Projects. Government Union Review,
Volume 19, Number 3. - Herbert R. Northrup and
Linda E. Alario. (October 2000)
Analysis of the Impacts on the Jefferson County
Courthouse Complex through Project Labor Considerations
- Prepared for the Jefferson County (NY) Board of
Legislators - Professor Paul G. Carr, P.E., Engineering
and Management Consultant (September 2000)
Project Labor Agreement Study: Prepared for Clark
County (NV) School District - Resolution Management
(June 2000)
Government-Mandated Project Labor Agreements in
Construction: A Force to Obtain Union Monopoly on
Government-Financed Projects - Herbert R. Northrup,
The Wharton School. (January 2000)
"Boston Harbor"-Type Project Labor Agreements
in Construction: Nature, Rationales and Legal Challenges
- Journal of Labor Research. Herbert R. Northrup and
Linda E. Alario. (Winter 1998)
Project Labor Agreements:
The Extent of Their Use and Related Information
- GAO Report (May 1998)
Comparison of Nonunion and Union Contractors
Construction Fatalities - National Center for
Construction Education and Research (May 1995)
Analysis of Bids and Costs to the Taxpayer for
the Roswell Park Cancer Institute, New York State
Dormitory Authority Construction Project - Associated
Builders & Contractors - Empire State Chapter
(March 23, 1995)
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