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By Tim Hunt

Project labor agreements are bad business

Uploaded: Oct 30, 2012

As you prepare to vote next week or fill in your vote-by-mail ballot, you should be aware of the implications of project labor agreements.
These union-backed and driven agreements basically guarantee trade union members government or private work. If a private company decides to make a deal to use union labor exclusively, so be it. That's their call.
When it comes to government and your tax dollars and mine—it's different. For decades, since the passage of the Davis-Bacon Act during the Depression, federal projects have required paying prevailing wages (that simply translates to union scale). That adds substantially to the costs of projects particularly now that the vast majority of the construction work force is non-union.
Over the years, merit (non-union) contractors have learned how to bid for prevailing wage jobs effectively. They can do so because they are not bound by union work rules that are generally designed to ensure as many jobs (thus as much dues income) as possible. Employees receive the higher union wages, but the costs for non-union contractors are still less. For ample, a plumbing job involving an 8-person crew averages $100.87 with union work rules and $77.06 for the merit shop when paying union scale.
The unions have responded to this challenge by turning to the politicians—virtually all Democrats—to seek project labor agreements on jobs.
Numerous studies have demonstrated that these agreements raise costs by 10 to 15 percent.
On federal jobs, the Bush Administration allowed open competition and disallowed any labor agreements. Early on, the Obama Administration reversed that and requires labor agreements—one could argue in a direct payback for the union support.
What that means is not only higher costs borne by all taxpayers, but the non-union 85 percent of the construction work force is eliminated from bidding or doing jobs they are paying for with their taxes.
Let's bring this down to Alameda County, a traditional union stronghold. Let's start with the National Ignition Facility at Lawrence Livermore National Laboratory, a multi-billion project that has a labor agreement. So do the BART extensions to the Oakland Airport and Eastern Contra Costa County—the airport line alone is more than $500 million.
It also covers the Chabot-Las Positas Community College District and all of the new facilities at Las Positas and the refurbishment of the Chabot campus.
The Alameda County Board of Supervisors already has determined that the East County Courthouse, to be built next to Santa Rita county jail, will be constructed by union labor. Given the sorry state of both state and county finances, it is irresponsible to lock out 85 percent of the work force and then raise the costs 10 to 15 percent to take care of their union bosses.
What's interesting is to witness school districts cry poor and then mandate these agreements for construction. Seven other Alameda County school districts require these agreements as does the city of Berkeley. On the docket for potential agreements is all work in Alameda County of more than $1 million as well as all work in Hayward, for the Oakland Housing Authority and for any work on conversion of the Oakland Army Base of more than $1 million.
Who sits in the White House will determine if these agreements are used on jobs with federal funding, but it's the local agencies that are paying off unions at the expense of taxpayers in the local areas.
These also are worth considering as you weigh your vote on Measure B1 to double the sales tax for transportation in Alameda County to 1 cent and make it permanent. The county commission, conveniently, has not determined its policy on project labor agreements, but given the political makeup of the majority of the county it's not a difficult guess when it comes up.
These political payoffs are no different that compulsory union dues that are collected from employees and then used to invest in Democrat candidates for office.