Federal project labor agreement proposal fuels debate across local industry

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A federal proposal to implement an executive order for project labor agreements for federal projects worth $35 million or more has sparked debate within Wisconsin’s construction industry. 

The Department of Defense, the General Services Administration and National Aeronautics and Space Administration proposed to implement President Joe Biden’s executive order requiring federal agencies to use a project labor agreement for federal projects that cost $35 million or more. Biden signed the executive order in February. 

Otherwise known as PLAs, the agreements are between contractors and labor unions to set working standards for construction projects. If the rule is implemented, it would affect federal infrastructure investments in projects like roads, bridges and sewers. 

In Wisconsin, construction leaders anticipate a flow of federal money from the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, worth $740 and $550 million respectively, that will be invested in local infrastructure. If the proposed rule becomes law, future federal projects in the state would be subject to project labor agreements if the cost is high enough. 

Associated Builders & Contractors of Wisconsin President John Mielke said in a commentary last week in The Daily Reporter that while the policy benefits union labor, it would be “bad news” for construction workers who don’t belong to labor unions. Without the number cited, PLAs would exclude 80% of non-union construction workers and would hike materials costs, Mielke added. 

“PLAs needlessly exacerbate the industry’s skilled labor shortage by excluding the overwhelming majority of workers who are not union,” Mielke said. “This effectively discriminates against eight out of 10 Wisconsin construction employees.” 

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But PLAs don’t entirely exclude non-union companies and workers because they go through the same bidding process public projects go through, said Milwaukee-based Building Advantage Executive Director Chris Mambu-Rasch. Private owners choose whether to use PLAs, which have been used in Milwaukee landmarks like the Potawatomi Hotel & Casino and The Couture, he added. 

“The PLA bidding process is still competitive and has mechanisms to eliminate increased cost,” Mambu-Rasch said. “On the public side, PLAs still include bidding for union and non-union contractors.” 

The agreements can also come with requirements to hire a local workforce, including small businesses and hire women and workers of color – all of which can boost local economies, Wisconsin Building Trades Council Executive Director Emily Pritzkow said in a column responding directly to Mielke that published in The Daily Reporter this week.

Pritzkow added that labor unions and contractors had to work as partners.

“We look to them to tell us what they need to perform and what we need to do to remain competitive, while also bringing a voice for workers into that process,” she added. 

Leaders in construction should always be working together “on ways to drive growth here in Wisconsin,” Pritzkow said.