PLAs: Some Good News for Taxpayers

No more directing construction work to union companies

Yesterday, the Michigan House passed SB 165, which prohibits local governments and state agencies from using "project labor agreements" to effectively reserve construction work for union companies. The bill now goes to Gov. Rick Snyder, who is expected to sign it.

Project labor agreements had been used to require non-union companies to reach agreements with local unions, meaning that they had to make union dues payments and also contribute into union pension and health care benefit funds. These payments were over and above the benefits that companies provide for their own employees. PLAs were deal-breakers for non-union companies, which happen to employ nearly four-fifths of the construction workforce in Michigan.  Studies from the Beacon Hill Institute at Suffolk University showed that restrictive PLAs added 14 to 18 percent to the cost of construction. That's on top of the 10 percent that prevailing wage laws add.

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Which leads to the next task for the Legislature, repealing the state's prevailing wage law. But we're in a generous mood, so that can wait until after they get back from their July 4th holiday.