Editor’s note: This is an edited version
of an Op-Ed that appeared July 2, 2011, in the Detroit
As the state
continues to struggle its way out of a recession — technically Michigan’s
economy began to grow again in 2010, but jobs remain hard to find — state and
local governments should still be looking for every opportunity they can find
to cut expenditures without cutting back on core services. Which is why the
state Legislature deserves credit for passing legislation recently
that prohibits union-only project labor
of a project labor agreement means that before a construction company can work
on a publicly funded project, it must have a contract with local construction
unions. To get this agreement, a company must arrange for payments of union
dues and contributions to union pension and health care funds.
companies this is no big deal; they already have their union contracts. But for
non-union construction companies, the PLA is often a deal-breaker; it means
they have to pay into union benefit funds from which their employees will never
receive a nickel. These payments are on top of the wages and benefits that they
already pay their workers. None of this benefits the workers, especially when
state or federal prevailing wage laws already often dictate that workers
receive union wages and benefits, with or without a PLA.
The upshot is
that non-union companies are forced to pay twice for benefits: once for their
workforce, then for the union. Alternatively, they could hire new workers from
the union hall and take on the project with an unfamiliar workforce. Either
approach puts non-union construction companies at an unfair and unjustifiable
disadvantage when bidding for government projects.
Needless to say,
PLAs drive up costs for taxpayers, as well. According to the Union Membership
and Coverage Database, only 21.7 percent of Michigan’s construction labor force
is unionized, so a PLA can eliminate four-fifths of the construction workforce
from competing for a contract. The Beacon Hill Institute at Suffolk University
in Massachusetts found that PLAs added 14 percent to the cost of public
construction in Massachusetts and 18 percent in Connecticut. That was over and
above the cost of prevailing wage laws in those states. There is little reason
to expect that project labor agreements have had a different impact in
PLAs also do
little to promote labor peace, the oft-given justification for laws that favor
unions. Over the long haul, a non-union workplace can only be sustained through
mutual respect and trust between employers and employees; a non-union company
will typically have at least as good
a relationship with its employees as a union company. Nor do PLAs ensure
quality workmanship. Non-union companies must meet the same building codes and
engineering specifications using the same materials that union companies do,
and have their own worker training programs to make sure they do just that.
taxpayers are still burdened by a state prevailing wage law that imposes union
wages and benefits on state-funded construction projects; eliminating that
requirement will be the logical next step.
But when Gov. Rick Snyder signs this long overdue piece of legislation,
non-union construction companies will be able to compete on a more level
playing field, and Michigan taxpayers will get better bargains on the roads and
buildings they pay for.
Paul Kersey is
director of labor policy at the Mackinac Center for Public Policy, a research
and educational institute headquartered in Midland, Mich. Permission to reprint
in whole or in part is hereby granted, provided that the author and the Center
are properly cited.