Hartford Courant Op Ed
Open Government Projects To Nonunion
Labor by
Lelah Campo, president of the Associated Builders
and Contractors of Connecticut
in Rocky Hill, May 5, 2009
With Gov. M. Jodi Rell
and state legislators struggling to address a big budget deficit for this year
and huge projected deficits for the next two years, we are surprised that an
item that offers huge cost saving potential is not on the table.
The fiscal debate has included suggestions of tax hikes and compensation
concessions by state employees, but one opportunity to close budget gaps should
not be overlooked: the elimination of union-only construction.
In many of Connecticut's
cities, project labor agreements are signed between unions and politicians. The
sweetheart deals make it all but impossible for nonunion contractors to bid on
public construction projects.
Because project labor agreements require that all contractors and subcontractors
agree to union representation of all workers, use union hiring halls and
conform to restrictive union work rules and job categories, these agreements
are expensive. A 2004 study of Connecticut
school construction by the Beacon Hill Institute at Suffolk University,
which we underwrote, showed that such agreements raised costs by 17.9 percent.
Why are locally signed project labor agreements a problem
for state taxpayers? The state funds a large share of municipal construction in
Connecticut.
Thus, all state taxpayers pay the premium for such deals.
Hartford, for example, announced in January a decade-long, school-construction
project with an estimated price tag of $966 million. Under
the city's existing project labor agreement, that figure is nearly 18 percent
too high, based on the Beacon Hill study.
Given an expected state reimbursement rate of between 75 and 80 percent,
Hartford's building program will sock Connecticut's taxpayers with a
self-inflicted cost overrun as much as a $138 million. (If the elimination of
union-only construction in one city would save so much, just imagine the
savings that would result from banning project labor agreements throughout the
state.)
What do taxpayers get for the added expense of project labor agreements? It's
not superior performance. Plenty of such restricted projects have failed to be
completed on time and on budget. The long-troubled renovation of Hartford Public High School
is under a project labor agreement.
As for quality, jobs done with or without project labor agreements are governed
by the same codes and specifications, with engineers and inspectors providing
oversight.
Unions claim that project labor agreements ensure that only local workers are
employed. But more than 80 percent of construction employment in Connecticut is nonunion.
By restricting competition, project labor agreements exclude eight out of every
10 local workers, which can cause contractors to seek employees from other
states.
Construction union bosses say project labor agreements ensure workers fair
compensation for their work. Unfortunately, proponents prefer rhetoric to
reality. On Connecticut
public projects — all companies union and merit-shop alike — must pay the
"prevailing wage," (union scale wages) as well as benefits.
In some ways, nonunion contractors do even better for their workers. For
example, paid holidays and paid vacations, which are usually not included in
union contracts, are commonplace in Connecticut's
merit shops. Also, nonunion workers aren't required to pay union dues, much of
which is used not to represent members' interest, but to support lobbying and
election-related projects.
A recent poll found that nearly two-thirds of residents prefer spending
reductions as the means to balance the state's books. Couple that desire for
fiscal prudence with a serious drop in Connecticut's construction employment —
down 16,400 jobs since its October 2007 peak — and it's clear that expensive
agreements that lock the majority of state pre-qualified contractors out of the
bidding process for public building projects can no longer be justified.
Even in a strong economic environment, cozy and costly arrangements between
politicians and construction unions aren't sound public policy. In a period of
economic and fiscal woes, project labor agreements make even less sense. http://www.courant.com/news/opinion/editorials/hc-campo-labor-agreements-0505.artmay05,0,3998934.story