Beyond the Rhetoric

Harry C. Alford & Kay DeBow | 2/6/2020, 9:37 a.m.

The effect of government-mandated PLAs is that they discourage competition from Virginia’s qualified contractors and the 97.8 percent of Virginia’s construction workforce(7) that chooses not to join a union to rebuild their communities. Government-mandated PLAs are opposed by the NBCC because almost all minority-owned contracting firms are not affiliated with unions. African American-owned contracting firms are typically small businesses and employ their own core workforce of skilled construction workers, who are not unionized and are generally more diverse than construction workers coming from union hiring halls.

Despite efforts of various construction trade unions to diversify their membership over the years, they simply are not recruiting enough African-American members into the trades. In addition, claims that a PLA can be a tool to ensure minority construction workers and businesses are used on a public project is a farce. These goals can be achieved via contracting and workforce requirements independent of a discriminatory PLA mandate.

Government neutrality toward whether a construction contractor has an agreement with a labor organization is the best way to ensure fair and open competition on taxpayer-funded public works projects. This inclusive policy also benefits taxpayers, as research has shown government-mandated PLAs can increase the cost of taxpayer-funded school construction by 12 percent to 18 percent.(8)

Finally, it has come to our attention that several bills requiring prevailing wage on state- and/or locally(9) procured construction projects are also moving through the Virginia legislature. The NBCC opposes the practice of forcing contractors to pay wages and benefits at rates determined by the U.S. Department of Labor via the federal Davis-Bacon Act. The NBCC opposes the Davis-Bacon Act and prevailing wage laws enacted in 27 states because these federal and state laws remain one of the last vestiges of Jim Crow.

5 An October 2009 report by Dr. John R. McGowan, The Discriminatory Impact of Union Fringe Benefit Requirements on Nonunion Workers Under Government-Mandated Project Labor Agreements, finds that employers that offer their own benefits, including health and pension plans, often continue to pay for existing programs as well as into union programs under a PLA. The McGowan report found that nonunion contractors are forced to pay in excess of 25 percent in benefit costs above and beyond existing prevailing wage laws as a result of “double payment” of benefit costs. See New Report Finds PLA Pension Requirements Steal from Employee Paychecks, Harm Employers and Taxpayers, Oct. 24, 2009. 6 The McGowan report found employees of nonunion contractors who are forced to perform under government-mandated PLAs suffer a reduction in their take-home pay that is conservatively estimated at 20 percent.

In addition, PLAs force employers to pay employee benefits into union-managed funds, but employees will never see the benefits of the employer contributions unless they join a union and become vested in these plans. See TheTruthAboutPLAs.com, New Report Finds PLA Pension Requirements Steal from Employee Paychecks, Harm Employers and Taxpayers, Oct. 24, 2009. 7 Just 2.2 percent of Virginia’s construction workforce belonged to a union in 2018. See UnionStats.com, Table II, State: Union Membership, Coverage, Density, and Employment by State and Sector, 1983-2018, Barry Hirsch (Andrew Young School of Policy Studies, Georgia State University) and David Macpherson (Department of Economics, Trinity University), accessed Jan. 20, 2020. 8 See research about the impact of government-mandated PLAs on school construction costs at: http://beaconhill.org/labor-economics/. 9 See bills introduced by Sen. Saslaw (SB 8), Sen. Favola (SB 180), Del. Kory (HB 114), Del. Carroll Foy (HB 833), and Del. Tran (HB 1203).3