WSJ Editorial Mischaracterizing SB 922 and PLAs Rebuked

October 6, 2011 -  In a letter to the editor of the Wall Street Journal, SBCTC President Bob Balgenorth and Northern California Mechanical Contractors Association Executive Director Scott Strawbridge, in their capacities as trustees of the California Construction Industry Labor Management Cooperation Trust, have refuted a Journal editorial critical of SB 922 and supporting blanket bans on Project Labor Agreements.  We are not certain at this time if or when the letter will appear. The entire letter and the editorial to which it responds follow.

Letter to the editor, Wall Street Journal, October 6, 2011

As contractors and workers in the construction field in California, we take issue with your October 5 editorial, “Shovelling for Labor,” because it contains several false statements about Project Labor Agreements (PLAs) and the new California law recently signed by Governor Jerry Brown.

You say the new law will “deter cities from passing laws that keep the doors open to non-]union contractors.”  In fact, the new law specifically keeps those doors open.  It specifies that no PLA may discriminate against any worker based on union membership, and further guarantees that all contractors, union or non-]union, are free to bid on any project using a PLA.

We were surprised that you simply parroted the false claim, manufactured by anti-]union contractors, that PLAs raise costs, rather than conducting your own research independently.  Had you done so, you would have found that the only “study” supporting that claim was paid for by anti-]union contractors, and it was immediately debunked by reputable academic scholars with no axe to grind.

PLAs are not the best method for every project.  But for 70 years they have been the cost-saving method of choice on many private-]sector projects, where cost is the overriding issue.  They have worked for Toyota, Honda, Disney World, the Trans-]Alaska Pipeline, Wal-Mart, and power plants up and down the state.  Profit-]driven businesses wouldn’t repeatedly use PLAs if they proved costly.

Cities should be free to seek the same savings private businesses enjoy when they are constructing these types of projects.  The new law simply keeps all those options on the table. Local governments who don’t want to use PLAs remain entirely free to make that choice.

“In fact, this bill preserves the right of all sides to debate what obviously is a hotly contested issue,” the Governor said in his signing message.  “Seems fair to me – even democratic.”

 Bob Balgenorth and Scott Strawbridge

 

Wall Street Journal, Oct. 5, 2011

Shovelling for Labor,

California tries to raise the cost of construction projects.

We keep hearing that the U.S. needs better roads, bridges and other public works.  But then why do politicians keep making it so much more expensive to build them?  In the latest example, Governor Jerry Brown signed a bill on Sunday that attempts to prevent California cities from banning government-mandated project labor agreements, or PLAs.

PLAs are pre-hire agreements that contractors negotiate with labor unions.  Construction firms must generally agree to play by union work rules, pay workers union wages, and contribute to union health and retirement funds—whether or not the employees they hire belong to a union. Non-union workers usually then have to join the union and pay union dues.  According to some studies, PLAs raise costs by 12% to 18%, which explains why cash-strapped governments and tapped-out taxpayers are moving against them.

Arizona, Louisiana, Maine, Michigan and Tennessee have enacted laws in the last year prohibiting local governments and agencies, which often play into the hands of unions, from mandating PLAs. Voters in San Diego County and the San Diego suburbs of Chula Vista and Oceanside approved bans on government-mandated PLAs last November.  The cities of San Diego and Sacramento are planning similar ballot measures next year.

Unions hate this trend, so they encouraged Democrats who run the state legislature in Sacramento to pass the bill that Mr. Brown so obligingly signed.  Democrats know that the National Labor Relations Act, a federal law, already prevents local governments from banning PLAs altogether.  But what states and cities have been trying to do is prevent governments from requiring PLAs.  Democrats hope the new law will deter cities from passing laws that keep the doors open to non-union contractors.  Cities that ban government-mandated PLAs could face legal challenges and harassment from unions.  The state could also refuse to fund their projects.

The California law is the first of its kind, and non-union construction firms fear that other labor-friendly state legislatures will follow Sacramento's lead.  If that happens, taxpayers will lose the limited ability they have to constrain costs and expedite construction.  The result?  Public projects that cost more and create fewer jobs, though they'll be the kind of jobs that Democrats prefer—unionized, and thus with dues payable into campaign funds to elect more Democrats. 

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