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Home / Commercial Construction / Officials see PLAs altering the business climate (4:22 p.m. 1/28/10)

Officials see PLAs altering the business climate (4:22 p.m. 1/28/10)

By Richard A. Webster
Dolan Media Newswires

New Orleans — Louisiana Associated General Contractors CEO Ken Naquin fears the use of project labor agreements on federal construction projects will drastically alter the way business is done in Louisiana.

Labor unions hope he is right.

While Naquin fears PLAs will freeze out nonunion contractors, union officials say they believe the use of PLAs in the surge of federal projects expected this year could force a sea change in how construction workers are compensated for the foreseeable future.

“PLAs are about construction workers being treated fairly and getting an opportunity to advance and have a career in the construction industry, one that pays a decent living wage with health insurance and retirement benefits,” said Lance Albin, business manager for the Plumbers and Steamfitters Local Union 60 based in Metairie.

PLAs require construction firms bidding on a project to agree to a collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific project. Nonunion contractors and subcontractors are not excluded from the bidding process, but they must abide by agreed-upon labor standards.

PLAs typically include wage standards, health insurance, retirement benefits and the inclusion of an apprenticeship program. Workers on a PLA project can attend night school for their specific craft that will allow them to advance in their field and elevate their salary.

“We have a shortage of skilled laborers,” Albin said. “We need to do a better job at recruiting and training, but the problem is right now no one wants to pay people or guarantee their advancement.”

PLAs were banned from federal projects under President George W. Bush, which made it more difficult for union contractors to get work, especially in right-to-work states such as Louisiana.

Union contractors are obligated to pay prevailing wages, so nonunion contractors can easily underbid them, said Robert Hammond, president of the Greater New Orleans AFL-CIO. Nonunion companies can agree to pay their electricians $20 an hour as opposed to $32 per hour including health insurance and retirement benefits standard among union firms, reducing the cost of the overall project.

There have been some exceptions.

Harrah’s casino, hotel and parking garages, in addition to Loews New Orleans Hotel were all built under project labor agreements.

The practice will be more common now that President Obama overturned Bush’s ban. Instituting PLAs will force all contractors to compete on a level playing field and in such cases, union firms will win the bid 90 percent of the time, Hammond said.

“The nonunion contractors do a good job undercutting the wages of union employees, so there’s only so much work out there for us,” Hammond said. “And as long as they don’t have to pay a decent wage and we don’t have prevailing wage ordinance in the state, they’ll keep getting away with that.

“But the PLAs change everything. Their unskilled labor force can’t compete with our skilled force when put up against one another.”

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