Project Labor Agreements: Costly for Hawaii

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Sen. Sam Slom - Photo courtesy of Mel Ah Ching Productions

BY SEN. SAM SLOM, R-HAWAII KAI-DIAMOND HEAD – Two months ago, on May 22, 2012, Hawaii Governor Neil Abercrombie issued an administrative directive for use of Project Labor Agreements (PLA) for state construction projects. Most residents are not aware of this action or the enormous future impact PLAs can have here.

Abercrombie explained, “ the State of Hawai’i will use PLAs on a variety of construction projects in order to address obstacles that might arise due to a lack of labor coordination.” The Governor added, “A Project Labor Agreement provides a mechanism for collaboration on certain projects to prevent potential conflicts among labor unions. Our local economy has shown signs of improvement, but we cannot afford to lose this momentum by prolonging projects from getting done in a timely manner.”


Those “obstacles,” and “lack of labor coordination,” is code for: we don’t want a free, competitive government project process; we want union-only guarantees.

Five specific and costly ($519.9 million total) state projects were identified for PLAs by the Governor:

(1)  University of Hawai’i – Hilo College of Pharmacy; a $38 million project

(2)  Princess Victoria Kamamalu Building: Total project estimated cost is $32.9 million

(3)  Maui Regional Public Safety Complex: Total project estimated cost is $225 million.

(4)  Ewa Elementary School: This $11 million project

(5)  Honolulu International Airport Mauka Concourse Project: Estimated project cost is $213 million.

As expected, Hawaii unions applauded the Governor’s action. PLAs provide the compulsory building and trades unions even more of a stranglehold on public projects at the expense of non-union, merit shops.

Actually, unions have tried for decades to get legislative approval of PLAs. Former State Senator  Cal Kawamoto, was a champion of unions and union shops. During his Senate tenure, he annually introduced bills, resolutions and riders to other bills to sneak in Project Labor Agreements. He was an outspoken and passionate PLA supporter. He came close but did not succeed. Now, the Governor basically has trumped the legislature and did what they wouldn’t do.

But are PLAs good for Hawaii?

Hawaii is always identified as a heavy union state but most of the union membership comes from government unions. In the private sector, 2/3 of the workforce do not belong to a labor union. In a PLA, these contractors and their employees cannot compete on an equal basis, even though the state projects are funded by their own taxes.

The non-union, merit shop Associated Builders & Contractors (ABC) Hawaii criticized the Abercrombie unilateral decision, saying, “…This directive is a clear handout to construction union bosses,” said ABC Hawaii Chapter President Jonathan Young. “Gov. Abercrombie says he is concerned about jobs, but this directive shows he only cares about workers if they come with a union card.”

ABC and others believe PLAs are a Big Labor scheme to eliminate competition from nonunion contractors and their workers by requiring that construction projects be awarded only to contractors and subcontractors that agree to recognize unions as the representatives of their employees on that job; use the union hall to obtain workers; obey the union’s restrictive apprenticeship and work rules; and contribute to union pension plans and other funds in which their nonunion employees will never benefit from unless they join a union.

Past national research has shown PLA mandates deprive taxpayers of the opportunity to get the best construction at the best price. Numerous studies show that PLA mandates can increase construction costs by nearly 20 percent.

PLAs are also known as  Community Workforce Agreements. PLAs are  pre-hire collective bargaining agreements with one or more labor organizations that mandate terms and conditions of employment for a specific construction project.

There are private PLAs also but it is the government funded projects where all the action—and money— is.

Nationally, the earliest use of Project Labor Agreements affected several dam projects in the 1930s, including Grand Coulee Dam in Washington, Shasta Dam in California and Hoover Dam in Nevada.

PLAs accelerated during WW II. Then there was a shortage of skilled labor. Construction unions controlled almost 90% of the national marketand spending on construction increased significantly. PLAs emphasized standard rates of pay and prevented strikes.

The Boston Harbor reclamation project in the 1980s resulted in a challenge to the legality of PLAs. The Massachusetts Water Resources Authority PLA mandated union-only labor. ABC of Massachusetts/Rhode Island, Inc. challenged the project, arguing a PLA was prohibited by the National Labor Relations Act. A First Circuit Federal Appeals Court ruled in 1990 that Boston Harbor violated federal law because of its union-only mandate.

In October 1992, President George H. W. Bush signed Executive Order 12818 prohibiting federal agencies from exclusively contracting union labor for construction projects.

A year later, President Bill Clinton rescinded Bush’s order and issued Executive Order 12836 in February,1993.

President George W. Bush, issued Executive Order 13202 which prohibited federal agencies from requiring union-only PLAs on all federally funded construction projects.

Finally, on February 6, 2009, President Barack Obama issued Executive Order 13502, which requires PLAs on federal construction projects in excess of $25 million.

More than a dozen states have acted to restrict the use of government-mandated project labor agreements on public construction. Will Hawaii’s legislature act next year to curb the Governor’s power? Don’t bet on it.






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