Right to Work Blog

What do underfunded union pensions and Project Labor Agreements (PLAs) have to with each other?  A lot; the Obama Administration and Pelosi’s Congress chose to force construction workers to pay into union pensions to work.  That’s right, if you plan to work on the new federal construction projects you must pay into the union pension, even if you are not a member of the union.  And, now more research reveals that union pensions imperil your retirement.  Kevin Mooney of the Washington Examiner reports that half of the 20-largest unions have underfunded pensions.  Mooney quotes Diana Furchtgott-Roth who issued her own report last year that drew similar conclusions.

The report reveals that familiar union pensions are in trouble:  Service Employees International Union (SEIU), the United Food and Commercial Workers (UFCW), the International Brotherhood of Electrical Workers, the Laborers International Union of Northern America, the International Association of Machinists, the United Brotherhood of Carpenters, the International Union of Operating Engineers, and the National Plumbers Union.  Four of these unions will dominate the PLA forced unionism contracts created by the Obama Administration.  

Mooney’s report reinforces the detrimental harm caused by forced unionism through Project Labor Agreements.  PLAs force all workers working under the PLA to risk their retirements by forcing payments into these union plans.

In a recent issue of Human Events, National Right to Work Committee President Mark Mix spoke out on the Obama administration’s economic “stimulus” package:

Barnstorming the country to sell his economic “stimulus” package, for which U.S. taxpayers will ultimately fork over more than a trillion dollars in principal and interest, President Barack Obama incessantly touts the construction jobs the package will bankroll.

Capitol Hill observers currently expect that more than $60 billion of the final version of Mr. Obama’s package will go into highway, bridge, mass transit, and other public works projects. Unfortunately, even as the President pitches the benefits of public works construction to the American people, the Obama Administration is undermining competitive-bidding rules that are designed to help taxpayers get the most for their money.

On February 6, Mr. Obama signed an executive order overturning an eight-year-old federal policy that has prohibited federal agencies and recipients of federal tax dollars from requiring contractors to sign union-only “Project Labor Agreements” (PLAs) as a condition for participating in federally funded public works.

To participate in PLAs, nonunion companies routinely have to consent to impose union monopoly bargaining and forced union “agency” fees on their employees and hire workers through discriminatory union hiring halls. Independent workers who already have their own retirement funds are nevertheless forced also to contribute to Big Labor-manipulated pension funds.

Taxpayers Burdened

Rather than compromise the freedom of their employees and the efficiency of their operations, most independent construction firms simply refuse to submit bids on PLAs. And since just 16% of construction employees nationwide are unionized, PLA discrimination against union-free workers and firms sharply reduces the number of potential bidders for public works jobs and, not surprisingly, also jacks up taxpayer costs. Every reputable study of PLAs’ impact on construction costs confirms this fact.

For example, a 2006 study of public-school construction projects in the State of New York conducted by two economists affiliated with the Beacon Hill Institute (BHI) at Suffolk University in Boston, Mass., found that “the presence of a PLA increases a project’s base construction bids by $27 per square foot (in 2004 prices) relative to non-PLA projects.” [emphasis in the original]

Since the average cost per square foot of the projects reviewed was $134.71, that means “PLAs raise the base construction bids of building schools by 20%,” and the potential savings “from not entering into a PLA on a school construction project range from $2.7 million for a 100,000 square-foot structure to $8.1 million for a 300,000 square-foot structure.” The New York study carefully controlled for the size and type of the project and other factors that might affect costs.

The President’s February 6 executive order lifting the ban on discriminatory PLAs in federal taxpayer-funded construction and “encouraging” government agencies to mandate them laughably claims that PLAs “promote economy and efficiency in federal government,” but this contention runs counter to common sense as well as dispassionate, scientific research like that of the BHI. How does tilting contract bidding rules against construction firms employing 84% of construction workers across America promote economy? How does imposing inefficient union-boss work rules on union-free firms promote efficiency in public works?

By all appearances, Barack Obama is too knowledgeable and intelligent to actually believe that his pro-PLA executive order, and other executive orders he signed in January that also promote union monopoly control over employees of federal contractors, are about economy and efficiency. A far more plausible explanation is that the President is wielding the power of the White House to pay back the union officials who last year funneled more than a billion dollars, most of it in unreported, forced union dues-funded “in-kind” contributions, to his ticket and to other likeminded federal and state politicians.

Mr. Obama explained his thinking well in his 2006 political memoir, The Audacity of Hope: “I owe those unions. When their leaders call, I do my best to call them back right away. I don’t consider this corrupting in any way.”

Unfortunately, there’s little pro-right-to-work Americans can do to stop Mr. Obama and Congress from giving multi-billion-dollar, taxpayer-funded handouts to Big Labor under the guise of “economic stimulus.” But we do have a fighting chance to block the even bigger power grabs now on the horizon, such as a federal law giving union officials unchallenged power to impose union monopoly bargaining over workplaces through so-called “card checks.”

Mr. Mix is [also] president of the National Right to Work Legal Defense Foundation, which litigates on behalf of employees whose rights have been violated by compulsory unionism. The foundation is representing more than 150,000 workers in nearly 300 cases nationwide.

President-elect Obama’s plan to spend hundreds of millions of dollars in public construction will certainly be funneled through union-only construction projects.

Although only 15% of America’s private-public hardhat labor force currently belongs to a union, you can rest assured — thanks in part to the billion dollars in political spending by the Big Labor Bosses — public monies will only be available to companies that are 1) union or 2) pay an inflated “prevailing” wage rate. It will be a raw deal for the taxpayers but a good deal for the union bosses.

California Gov. Arnold Schwarzenegger used his power as governor to veto a proposed $6 million in state funding to a Big Labor institute that trains political operatives.

Kevin Korenthal, the Executive Director of the Associated Builders and Contractors of California, commented:

For the last 2 years, Governor Schwarzenegger has allowed the taxpayers to shoulder the cost for the operation of a special interest group training program that has long been used to train operatives on the finer points of defeating Republicans and conservative initiatives at the ballot box. The 6 million taxpayer dollars that the Miguel Contreras UC Labor Institute was handed each of the last 2 years is also responsible for the composition of a bogus “study” supporting a union Project Labor Agreement (PLA) for the Los Angeles Community Redevelopment Agency immediately before the agency’s commissioners voted on it. This was done with YOUR money – misusing the name and academic reputation of the University of California to advance the union political agenda.

So it was to our pleasant surprise to learn today that the long sought 2008/09 budget did not include this special interest payment. In this era of budget deficits and decreased tax revenues, Schwarzenegger’s line-item veto of this giveaway denies its beneficiaries much needed public funding. Yes, the unions will somehow come up with the money to keep the Big Labor training program in operation, but denying the program public money sends the right message and the Governor should be applauded for killing the funding.

Like a diamond in the rough, the Waterbury Republican American newspaper in the heart of Big Labor Connecticut is willing to stand up for taxpayers against the political power of union bosses even when the politicians won’t. Their latest editorial about the construction of a local elementary school is a perfect example.

Confronted last week with a choice between giving taxpayers less and adopting a risk-free strategy with high potential to give taxpayers more, Waterbury’s Board of Education gave taxpayers less, possibly at a higher price.

Members were shocked when bids for Gilmartin Elementary School renovations came in $7.5 million over the expected $26.2 million budget. The proposal called for a Project Labor Agreement (PLA) that effectively excluded nonunion contractors from bidding. Independent and Republican board members, joined by an unaffiliated member and a lonely Democrat, Coleen Flaherty-Merritt, wanted to drop the PLA for the Gilmartin project. The board owes it to taxpayers “to look at every factor we can to bring (the project) in on time and on budget,” unaffiliated board member Ann M. Sweeney said at the Sept. 2 meeting.

Nobody knows whether the union-only provision inflated the price. But the answer is simple enough to find: let union and nonunion contractors compete as equals. The numbers will tell the tale.

Unfortunately for the taxpayers of Connecticut, the Board of Education knows that competition will bring lower costs to most any project including the construction of local schools. But with the power of local union bosses, most politicians refuse to cross them:

The five Democrats who remained in lockstep after Ms. Flaherty-Merritt broke ranks produced a 5-5 tie vote Sept. 2, leaving the PLA intact. As an ex officio member of the board, Mayor Michael J. Jarjura could have broken the tie, but he did not attend. Having settled the PLA issue, the board approved, 7-3, a plan to bring forward a cheaper design.

Politicians beholden to Big Labor will stop at nothing to prevent workers from exercising their free choice as to whether to join a union. You can add Los Angeles Mayor Antonio Villaraigosa to that list.

The mayor has decreed that any city project that receives funds from the Community Redevelopment Agency must agree to use union workers.

Rather than ensuring the best quality work at the lowest cost, this special-interest earmark to Big Labor prevents workers who chose not the join a union from getting work from a fund they subsidize with their taxes.

In San Diego, California, Big Labor construction unions are demanding that Gaylord Entertainment, a hotel operator, sign a Project Labor Agreement (PLA) that prohibits non-union construction companies from working on the building of a new 1,500 room hotel.

Gaylord Entertainment is rightfully refusing.

The Constitution protects your right to associate and, by logic then, your right to disassociate. But Broome County, New York has decided to punish and discriminate against those exercising this basic right.

The Birmingham, New York Press & Sun Bulletin reports that:

Broome County’s non-union contractors are up in arms over the county’s decision to set aside 90 percent of the work on the $16.9 million George Harvey Justice Building renovation to union members as part of a new labor agreement.

They say it will shut out local workers in favor of out-of-county and even out-of-state workers.

County leaders who are obviously in the back pockets of Big Labor bosses claim the policy will “save money.”

What nonsense.

But non-union contractors say the agreement — a first for Broome County — will jack up costs by attracting fewer bidders and awarding jobs to union members from outside Broome County.

There is a more fundamental issue at stake than dollars and cents.

Using taxpayer dollars to discriminate against Broome County residents who exercise their constitutional rights is an outrage that must be overturned.

“Organized Labor has a long history with extortion and the mob. Federal prosecutors have put most of those mob bosses behind bars, but unions haven’t renounced using blackmail to get what they want. They simply use more sophisticated methods to do the same thing,” writes James Sherk at the Heritage Foundation.

The new tactic can be called “greenmail,” blackmail with an environmental hue.

Sherk continues: “Take the way unions exploit environmental concerns through Project Labor Agreements [PLAs]. Under PLAs, businesses promise to hire only union members — or else. Why would businesses sign such agreements? Because unions threaten to use environmental regulations to shut them down unless they sign the PLA.”