In our third installment of The Cato Journal’s January 2010 “Are unions good for America?” issue, we cover the third myth.
Here is The Homeland Stupidity web site’s synopsis of this myth, and a link to each of the 12 Cato articles.
Myth Number Three: Project labor agreements reduce project costs and delays and are good for construction workers as a whole.
Fact: Project labor agreements increase costs and only help union workers. PLAs are agreements between construction project owners and unions that contractors on the project must use union labor, even if they otherwise would not. David G. Tuerck, economics professor and chair at Suffolk University, cites numerous examples of how nonunion workers were harmed when they worked under PLAs, “first by forcing them to pay twice for benefits already offered their workers and second by forcing pay cuts on their workers.” Then, unions use veiled threats to “labor peace” to intimidate project owners into accepting PLAs for “job stability.” Further, PLAs increased costs for every project studied which used them, sometimes as much as 20 percent.
“PLAs are motivated by a desire on the part of the construction unions to shore up the declining union wage premium against technological changes and other changes that make traditional union work rules and job designations obsolescent,” Tuerck writes. “Now the PLA has evolved into an instrument that the unions employ in tandem with the prevailing wage laws in order to reduce the competitive advantage of nonunion contractors.”
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