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Private sector embraces PLAs. Why shouldn’t governments?

Lawmakers wrongheaded for wanting to ban agreements on public projects

Dave Branson is the executive director of the Building and Construction Trades Council of South Central Wisconsin.

Dave Branson is the executive director of the Building and Construction Trades Council of South Central Wisconsin.

State Rep. Rob Hutton’s attempt to ensure “the importance of providing a neutral and competitive playing field” by prohibiting the use of project-labor agreements on taxpayer-funded projects flies in the face of the realities of today’s construction industry, and is a direct affront to the wishes and desires of the American electorate during the recent election.

Contrary to the propaganda being bandied about by Hutton and his “race to the bottom” supporters, a project-labor agreement is simply a market-based project-management arrangement that has been used increasingly and successfully in the private sector to achieve greater jobsite efficiencies. These regularly produce on-time and on-budget results and quality construction.

When Wisconsin public agencies look to invest taxpayer dollars in construction projects, they — just like corporations in the private sector — essentially have two distinct business models from which to choose.

The first relies on project-labor agreements, commonly called PLAs. It’s a business model that offers increase jobsite efficiencies through the use of a 21st century labor-management approach that fosters cooperation, harmony and partnership. It ensures that construction owners will have a steady, local supply of the world’s safest, most highly skilled and productive craft workers. And it ensures these workers will receive a pay and benefits package that is reflective of their skill and productivity.

PLAs further promote employment opportunities for local residents — particularly military veterans, women and minorities. PLAs can help people in these groups gain access to career training in the skilled trades through the use of apprenticeship-readiness programs and formal apprenticeship education and training.

PLA arrangements present a stark contrast to the “race to the bottom” business model that permeates the U.S. construction industry today. Advocates of this system appear to staunchly believe that contracts in the construction industry should be awarded primarily to contractors who are able to assemble the lowest-cost workforce possible. Workers in this group tend to be among the most vulnerable and exploitable.

In the public realm, where there is oftentimes an ironclad “low bid wins” requirement, disreputable employers are increasingly misclassifying employees as “independent contractors” or using undocumented workers, in order to reduce their labor costs and win contracts.

All across America we are seeing an alarming increase in the abuse of the federal visa system to import low-wage skilled craft workers from other countries in order to take the place of American workers in the construction industry. Why? Because the contractor associations that support Hutton and his anti-PLA bill have successfully usurped the process. The poisonous fruits of these endeavors can be seen in the fact that U.S. construction wages have remained relatively flat since the 1970s.

Hutton and his “low road” contractor supporters frequently like to talk about ensuring “fair and open competition” when it comes to public construction here in Wisconsin. What these race-to-the-bottom business practices inevitably make you wonder is: How exactly would their advocates define fair and open competition? Should a contractor be rewarded for his expertise in assembling a low-wage, low-skill, easily exploited and abused workforce? I believe the taxpayers of Wisconsin would say “No.”

Probably the best argument for PLAs in the public sector is that they have been used for decades in the private sector by large, sophisticated, experienced and cost-conscious owners, developers, construction managers and contractors. All these people are driven in part by the profit motive. They want to achieve the best results possible in the least expensive and quickest manner. For examples of projects that have benefited from PLAs, one need look no further than Disney World, Gillette, Reebok, the Trans-Alaska Pipeline, dozens upon dozens of professional sports stadiums (including the Milwaukee Bucks new arena), and all eight of Toyota’s U.S. factories. Even Wal-Mart, the widely recognized standard-bearer for efficiency and cost control, has increasingly turned to PLAs for the construction of their retail outlets.

If project labor agreements continue to be used by the profit-oriented, cost-conscious private sector, there must be a reason. Clearly it must be because they work. And if they work for the private sector, they will work for the public sector.

It’s time for PLA critics like Hutton to put aside their narrow political biases and stop talking about preventing state and local government agencies from being able to make rational, case-by-case decisions about the benefits of PLAs. Courts and private-sector owners have long found this to be a reasonable and responsible approach.

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