On Tuesday, the Obama Administration implemented a new policy — initiated by an early executive order signed by President Obama — encouraging federal agencies to adopt so-called "project labor agreements" (PLAs) on large-scale federal construction projects.

Some of the typical conditions demanded by unions in PLAs include monopoly bargaining, forced dues and fees for all “represented” workers, exclusive union hiring halls, and inflexible union work rules which strictly separate job functions into exclusive union jurisdictions based on craft.

The Wall Street Journal strongly criticized the new policy, which effectively discriminates against the 85 percent of all construction workers who are not under union monopoly control. Moreover,

It’s also a rotten deal for taxpayers. White House economist Jared Bernstein blogged that these agreements "significantly enhance the economy and efficiency of Federal Construction projects." In fact, the carve-outs put an end to open, competitive federal bidding, which means higher project costs. They also mean taxpayers must finance the benefits and work rules of union members.

Boston’s Big Dig, Seattle’s Safeco field, Los Angeles’s Eastside Reservoir project, the San Francisco airport, Detroit’s Comerica Park—all were built under PLAs marked by embarrassing cost overruns. We’d list more, but newsprint is expensive.

The White House went out of its way to note that the Supreme Court has upheld such agreements in the past, suggesting it has a guilty conscience. In fact, the High Court has never ruled on the legality of these agreements under federal competitive bidding laws. Industry groups are now threatening legal action to defend the rights of workers who will be denied employment for the crime of not sporting Obama-Biden bumper stickers. It’s a fight worth having.

The Washington Examiner likewise denounced the discriminatory policy, noting the National Right to Work Foundation’s objections:

"The Obama administration’s policy is a slap in the face to the vast majority of construction workers who have chosen not to unionize," said Mark Mix, president of the National Right to Work Legal Defense Foundation."Qualified nonunion contractors whose workers have opted against unionization will be locked out from large-scale construction projects. The true purpose of so-called project labor agreements is simple: To impose unwanted union boss control on workers from the top down."

Another factor helps explain Obama’s willingness to sign an executive order that will put millions more tax dollars in union coffers. Mix points out that unions under PLAs typically exact agreements that include requiring contractors to make payments to union pension funds. This is an increasingly urgent issue, as the Washington Examiner’s Mark Hemingway has recently detailed in these pages. According to Labor Department filings, the average union pension has only enough money on hand to cover 62 percent of the benefits it has promised to union members. Pension plans with 80 percent funding are considered "endangered" by federal auditors, while those with less than 65 percent funding are put on the "critical" list. With this latest executive order, it’s clear that Obama intends to give unions on the critical list a massive dose of federal tax dollars to cure what ails them.

Posted on Apr 15, 2010 in Blog