Although the infrastructure bill that Congress passed last year has more to do with climatic virtue signaling (bicycle lanes, electric car chargers) than roads and bridges, it does devote some money to those essentials (though not, per a Biden Administration maneuver, to building new roads or expanding the capacity of old ones). The President has now, however, acted to ensure that construction projects will cost more and buy less.
An executive order issued last Friday requires “project labor agreements” for construction projects valued at $35 million or more. There are some exceptions, and the order applies only to projects directly funded by the federal government, but the White House estimates that it will apply to $262 billion of contracts, that is, to the vast majority of work under the infrastructure bill.
An article on Law360, a left-leaning legal news site (you can easily get past its pay wall if you’re a lawyer; for others it’s more of a challenge), describes how the PLA mandate undercuts the goal of improving transportation.
A project labor agreement is a collective bargaining agreement that covers work on a particular project. The George W. Bush Administration banned them on federal projects. The Obama Administration rescinded the ban but “PLAs were only sparsely used under the Obama administration, and not at all under the Trump administration”. The Biden order will, as Joe might say, turn them into a BFD.
PLAs will “improve timeliness, lower costs and increase quality in federal construction projects” by ensuring all companies working on a contract follow the same labor terms and have a common dispute resolution mechanism, the White House said.
But construction companies that don’t already employ a unionized workforce may find it difficult to comply with employment terms they don’t typically have to follow, such as union job delineations, which may discourage some companies from bidding on construction solicitations, said Brian Lundgren, a principal at Jackson Lewis PC.
“You’ll see issues with how it can reduce competition, because [a PLA] can be an impediment to contractors, and [particularly] smaller contractors, who are not familiar with this and are nonunion,” he said. . . .
If nonunionized companies react to the order by pulling back from federal work, the effect on competition could be significant. The Bureau of Labor Statistics’ annual report on union membership, released in January, indicated that the vast majority of the industry is not unionized. According to the BLS, 86.4% of people working in construction in 2021 were either not a member of a union or not represented by a union.
The availability of construction workers for federal construction jobs is already tight, with the industry having struggled with shortages in skilled labor going back long before the recent “Great Resignation,” said Neil Wilcove, a member at Miller & Martin PLLC, whose litigation practice focuses on the construction industry.
“I think the unintended consequence of this is that the [labor] shortage is going to be more than what we’re already dealing with now, which is significant,” he said.
I doubt that the consequence is unintended; it’s simply not as important for an automobile-hostile Administration as doing favors for union bosses. That fewer potholes get fixed is a problem only for the deplorables.
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