APPRENTICESHIP PLAs – Fact or Fiction??? By Pete Saucedo, Executive Director - AGC Apprenticeship
At nearly every government agency, school board, etc., both small and large, organized labor has a team of individuals who actively pitch project labor agreements (PLAs). Labor has had success at several levels in peddling PLAs, most recently at the San Diego Airport Authority, as well as various school districts, and some large private projects too. While in a court of law, for example, both sides through their attorneys argue the merits of a case, and the most persuasive argument typically prevails. With PLAs, labor has stacked the deck so to speak. They do not rely on the merits of a PLA to sell itself, rather the Building Trades actively support politicians, and once elected, they persuade those same supported politicians to introduce and pass a PLA. This strategy has been successful with some entities, although when a vote is put to the people, the electorate has consistently rejected PLAs. The Fallacy Labor’s hired guns eloquently tout that PLAs are primarily about four things: - Local hire - Labor harmony/no strike clauses - Veteran outreach and utilization on projects - Apprenticeship utilization and training All these things sound great on its face, and who wouldn’t support these important concepts? The Reality What Labor officials do not tell politicians is the real motive behind their efforts. PLAs are a political tool to gain market share - period. There are two main components of a PLA that support this reality: 1. Labor wants their workers to perform the work. 2. They want union dues and all fringe benefit dollars to go into their trust funds/coffers. This often amounts to tens of millions of dollars on large bond issues. 18 AGCSD.ORG
These are the only two reasons why Labor consistently pushes PLAs locally and statewide. And how do we know? Because we have offered to negotiate a PLA with all the benefits that Labor claims (local hire, veteran outreach, labor harmony, and apprenticeship utilization) but without those two major provisions (the contractor can use their own workers, and all fringe benefit money can go to any bona fide third-party fund in accordance with state prevailing wage laws). Labor will never agree to such a modified PLA because it doesn’t accomplish the two primary goals previously stated: they want their workers to perform the work, and they want the money (and not necessarily in that order!). Based on objective data and also testimony of large general contractors who have performed both PLA and non-PLA work, the costs of a PLA project will increase somewhere between 10-20%. The primary reason is reduced bidders. Many open-shop subcontractors will not even bid a PLA project because they can’t utilize their own team, and for the very few core workers a non-union contractor may use, their fringe benefit monies are often gobbled up by the system with the worker receiving absolutely no benefit (i.e., pension contributions where a worker doesn’t work five years to vest are often forfeited in their entirety). On a bond issue of say $500 million, a PLA can cost an extra $50-$100 million in excess costs due to the union only provisions. $50-$100 million buys a lot of buildings, and PLAs promote economic waste on several levels. So why would any board ever pass a PLA? Politics, plain and simple.
