Unionwatch.org reports that the Sacramento and San Diego school boards have just voted to place bond measures on the November ballot, totaling $346 million and $2.8 billion, respectively. Both districts require project labor agreements on all projects above $1 million. Thus, in addition to approving the funds, voters will also have to decide about "the wisdom of government-mandated Project Labor Agreements."
PLAs work as follows. In advance of soliciting bids on a major construction project, the government sits down with the local building trade unions to determine all work rules and compensation for the project. All workers on the project must be hired through union halls. PLAs unfairly bar perfectly competent non-union shops from public work, reduce the pool of available bidders, and drive up costs for taxpayers
PLAs are always bad news, but Californians should take heart, because it could be worse. It could be Massachusetts, where PLAs are on the rise and no voter approval is being requested.
Within the past few months, Gov. Deval Patrick has announced that PLAs will be used on two separate multi-million dollar bridge projects. PLAs have been around for some time in Massachusetts (Boston's Big Dig, that model of government thrift and efficiency, had a PLA), but have become more common during the Patrick administration. Pushing back against this trend are not only non-union trade groups but also the Boston Globe editorial board. Even the state's own transportation secretary admits that non-union workers, who compose 85% of the Massachusetts construction industry, are qualified to do the bridge work.
PLAs attempt to make the private sector operate more like the public sector. Building trade unions are not public employee unions: strictly speaking, they work for their contractor, they don't elect their bosses, and they don't bargain collectively with the government. But PLAs allow private sector unions to strike deals similar to those enjoyed by teachers and public safety unions. In exchange for political support, government officials grant unionized contractors a monopoly over the public construction industry. The end result is both union dominance of public work and, for unionized firms, freedom from competition and market discipline.
State and local construction spending is at its lowest point since November 2006. Union-friendly policies like PLAs and prevailing wage laws minimize the value that taxpayers gain from what limited expenditures they are able to make. There's a clear parallel here with recent trends in the public sector. Just as the soaring costs of health and retirement benefits have caused state and local government workforces to decline even while budgets continue to rise (here and here), PLAs increase the cost of basic public services without any corresponding increase in productivity or quality.