Union-Only PLA Studies

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 almost 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 December 2006 study by the Beacon Hill Institute (BHI) at Suffolk University in Boston, Massachusetts, found that new funding formulas to be adopted by the state of Massachusetts will further increase the share of costs borne by cities and towns for school construction projects completed under union-only PLAs. Under the new funding formulas, a union-only PLA could increase the cost of construction for local communities by an average of 35 percent. The study also examines the adverse impact of a union-only PLA on the Fall River school construction project and describes how removing the PLA increased the number of bidders and lowered costs significantly. This study is a follow-up to a September 2003 study titled, Project Labor Agreements and the Cost of School Construction in Massachusetts.
  
  BHI study: Project Labor Agreements and Financing Public School Construction in Massachusetts
  
  
• A May 2006 study by the Beacon Hill Institute (BHI) at Suffolk University in Boston, Massachusetts, found that the use of PLAs on school construction projects in New York increased the cost of the projects by 20 percent. Project Labor Agreements and Public Construction Costs in New York State concluded that the presence of a union-only PLA increased the projects' base construction bids by $27 per square foot relative to non-PLA projects.
  
  Project Labor Agreements and Public Construction Costs in New York State
  
  
• A 2006 study by The Public Interest Institute, a nonpartisan, nonprofit research and educational institute, concludes the union-only project labor agreement agreed to for the construction of the Iowa Events Center project in downtown Des Moines placed an "unnecessary burden" on local workers, business and taxpayers. The board of supervisors signed the union-only PLA with the Central Iowa Building and Construction Trade Council in 2002, stating the agreement was necessary to "keep the project on time, keep it on budget, and complete it in a safe manner." According to the study, the union-only PLA "failed on all three counts."

  The PLA for the Iowa Events Center: An Unnecessary Burden on the Workers, Businesses and Taxpayers of Iowa

• A September 2004 study by the Beacon Hill Institute (BHI) at Suffolk University in Boston, Massachusetts, completed an extensive statistical analysis of the effects of union-only PLAs on bid and final costs of school construction projects in Connecticut for the period of 1996 through 2004. The study found that PLAs raise the cost of building schools by an average of almost 18 percent. BHI concluded that "our key finding is that PLA projects cost more that non-PLA projects, holding the effects of project size and type constant. This is true whether one considers bid costs or final project costs. The effect is statistically significant and robust."
  
  Project Labor Agreements and the Cost of School Construction in Connecticut

• 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 Nevada Water Authority project PLA cost taxpayers an additional $200,000, because the true low bidder refused to sign the union-only PLA. The project then went to a union contractor whose bid was $200,000 higher.
  
  Project Labor Agreements Research Study: Focus on Southern Nevada Water Authority

• 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

• Another GAO report, on a Department of Energy (DOE) Idaho Laboratory Project, found that the labor costs under the union-only PLA were 17-21 percent above the federally mandated Davis-Bacon rates.
  
  U.S. General Accounting Office (GAO) Report: Construction Agreement at DOE's Idaho Laboratory Needs Reassessing (May 1991)

Work Opportunities

• The U.S. Department of Labor's Bureau of Labor Statistics (BLS) Jan. 28, 2009 report states that 15.6 percent of the nation's construction workforce was unionized in 2008. Therefore, since union-only PLAs effectively preclude open shop companies from working on a PLA 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 and they deserve a fair chance at working on these construction projects.

• New Study Questions Effectiveness of DC Baseball Stadium PLA (October 2007) A PLA signed to ensure local residents the majority of work on the District of Columbia's new $611-million baseball stadium has failed completely, according to a new report released Oct. 2 2007 by the District Economic Empowerment Coalition (DEEC). The study can be found here.

• 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 and Financing Public School Construction in Massachusetts - Beacon Hill Institute at Suffolk University (December 2006)

Project Labor Agreements and Public Construction Costs in New York State - Beacon Hill Institute at Suffolk University (May 2006)

The PLA for the Iowa Events Center: An Unnecessary Burden on the Workers, Businesses and Taxpayers of Iowa - Public Interest Institute Iowa (2006)

Union-Only Project Labor Agreements: The Public Record of Poor Performance - Maurice N. Baskin (2005)

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)

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)

U.S. General Accounting Office (GAO) Report: Construction Agreement at DOE's Idaho Laboratory Needs Reassessing - (May 1991)