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Voters Reject Union Favoritism

Posted By James Sherk On June 14, 2010 @ 4:00 pm In Economics | Comments Disabled


Two of the most important results from last Tuesday’s primary have been drowned out by the coverage of other races. Voters in Chula Vista, CA passed measure G by a 56 to 44 percent margin [2] while voters in Oceanside, CA passed measure K by a 54 to 46 percent margin [3].  These measures prohibit discriminatory “project labor agreements” (PLAs) on city-funded construction projects.

A project labor agreement forces contractors to negotiate a collective bargaining agreement before starting work. In practice this means that work on PLA-covered projects goes to union members at union rates – nonunion workers need not apply. Unsurprisingly unions love PLAs and use their political influence to attach them to as many government construction projects as they can.

Of course paying union rates and shutting down competition from the 85 percent of construction workers [4] who are not union members raises costs. The Beacon Hill Institute estimates that PLAs increase construction costs by 12 to 18 percent [5]. Taxpayers face a hefty tab when the government sets construction projects aside for union members.

On Tuesday voters in Chula Vista and Oceanside decided enough was enough. By banning discriminatory project labor agreements they required their cities to spend their tax dollars wisely – no matter how much unions lobby for a sweetheart deal. If only the Federal government would do the same.

When President Bush took office he signed an Executive Order banning the use of project labor agreements on federal construction projects. This saved taxpayers between $1.6 and $2.6 billion [5] in 2008. However, President Obama repealed this directive almost as soon as he took office.

In its place he put an Executive Order encouraging federal agencies to pursue PLAs on federally funded projects worth more than $25 million [6]. The regulations implementing this Executive Order took effect this past April. Requiring federal agencies to use PLAs richly rewards union lobbyists, but it will add billions to the deficit and leave nonunion workers in the cold.

This is not the only special-interest favor Obama has given to unions. Consider that the Administration has also:

Project labor agreements are political favoritism at its worst. Hopefully Tuesday’s election shows that voters are tiring of special-interest union handouts.

Co-authored by Young Leaders Program members Alexi Himarios and Bethany Aronhalt. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm [12].

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URL to article: http://blog.heritage.org/2010/06/14/voters-reject-union-favoritism/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/Construction.jpg

[2] passed measure G by a 56 to 44 percent margin: http://www.sdcounty.ca.gov/voters/results/transform.htm?paramVal1=prop_g.xsl

[3] passed measure K by a 54 to 46 percent margin: http://www.sdcounty.ca.gov/voters/results/transform.htm?paramVal1=prop_k.xsl

[4] 85 percent of construction workers: http://unionstats.gsu.edu/Private%20Construction.htm

[5] increase construction costs by 12 to 18 percent: http://www.beaconhill.org/BHIStudies/PLA2009/PressReleasePLA090923.htm

[6] Executive Order encouraging federal agencies to pursue PLAs on federally funded projects worth more than $25 million: http://www.whitehouse.gov/the_press_office/executiveorderuseofprojectlaboragreementsforfederalconstructionprojects/

[7] Repealed union financial transparency regulations;: http://www.heritage.org/Research/Reports/2009/05/Union-Accountability-Reversal-Breaks-Obamas-Transparency-Pledge

[8] Bailed out unionized GM and Chrysler;: http://detnews.com/article/20100424/AUTO01/4240379/Obama--Auto-bailout-unpopular-but-right

[9] Bailed out the pensions of union workers at GM subsidiaries, but not nonunion workers;: http://www.washingtontimes.com/news/2009/dec/24/nonunion-auto-retirees-cry-foul-over-deal/?feat=article_top10_read

[10] Appointed the Service Employee International Union’s associate General Counsel to the National Labor Relations Board: http://dailycaller.com/2010/03/27/obama-appoints-union-lawyer-to-key-labor-relations-board-despite-gop-protests/

[11] Begun regulations making it more difficult for employers to talk to their employees about the downsides of unionizing: http://www.dol.gov/olms/Regs/unifiedagenda/Spring-2010/1245-AA03.html

[12] http://www.heritage.org/about/departments/ylp.cfm: http://www.heritage.org/about/departments/ylp.cfm

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