Indepedent Research

"Project labor agreements drive up the cost of capital projects, hundreds of which are expected to be financed in the next few years with stimulus funds, by limiting competition. And since the vast majority of construction workers in Massachusetts are not union members, requiring PLAs would limit the jobs recovery to a sliver of the state's workforce. (Albeit the sliver that helps get so many politicians re-elected.)"

-Boston Herald editorial, "Don't Rig Recovery," February 19, 2009

Study after study demonstrates the increased costs from Project Labor Agreements and other attempts to block open-shop contractors from bidding on construction projects. Here are some of the findings from independent researchers.

The Beacon Hill Institute at Suffolk University

The Beacon Hill Institute research demonstrates PLAs result in an increase in winning bids of $18.83 per square foot, or 14 percent. In addition, PLAs add $16.51 per square foot, which for a new 125,000-square-foot school is an additional cost of $2.1 million. Read more about BHI's research on PLAs and school construction projects at www.beaconhill.org.

The Worcester Municipal Research Bureau

The Worcester Municipal Research Bureau reported in 2001 that PLAs discriminate against nonunion workers, hurt smaller contractors by restricting their access to projects, and offer no wage benefits on public projects.

PROJECT LABOR AGREEMENTS ON PUBLIC CONTRUCTION PROJECTS: THE CASE FOR AND AGAINST

Worcester Municipal Research Bureau
Report No. 01-04
May 21, 2001

Based on an extensive analysis of the literature, legal opinions, and Congressional testimony on the use of Project Labor Agreements (PLAs) on public construction projects, as well as interviews with proponents and opponents of their use, the Research Bureau makes the following observations:

  • Project Labor Agreements, which are prehire collective bargaining agreements setting the terms of employment on an entire construction project, have been increasingly pursued by unions working on public projects since the U.S. Supreme Court upheld their legality under Federal law in the Boston Harbor case (1993).

  • PLAs are not needed to secure "fair" wages to workers on public projects, since such wages are already guaranteed under "prevailing wage" statutes in Massachusetts and other states.

  • The chief benefit that PLAs on public projects offer to the public is a guarantee of labor harmony, i.e., a pledge to avoid strikes and speedily resolve interunion disputes during the course of the project. (Occasionally, however such pledges have been violated.)

  • The guarantee of labor peace is evidently purchased at the price of reducing the opportunity for nonunion contractors to compete for work on a project, since even if they should be awarded such work, the contractors are then compelled to operate under union rules governing such matters as staffing requirements that undermine the economies that might ordinarily give such contractors an advantage. Thus PLAs tend to constrict the number of bidders on a project compared with those without PLAs, and are likely to reduce the savings to the public that would accrue nonunion contractors who are employed were allowed to follow their customary methods.

  • Additionally, PLAs tend to discriminate against nonunion workers, by requiring them if they are hired on a project either to join the union or else to contribute agency fees to the union as well as pay into its benefit funds, from which they are unlikely to derive benefits themselves.

  • Because most smaller contractors are nonunion, PLAs tend to have a detrimental effect in particular on the opportunities available to small businesses.

  • Under Massachusetts State court decisions, PLAs are allowable under state competitive bidding projects only for projects of large scope and complexity. It seems doubtful that the City Manager's recent decision to order PLAs for the North and Vocation High School construction projects will meet this test.