In one of the first acts of his presidency, Barack Obama crafted an Executive Order reinstating the use of Project Labor Agreements (PLAs) on federal construction jobs where total costs to the government exceed $25 million. This gift to Big Labor overturned a previous ban on the practice President Bush instituted early in his term back in 2001.
It took bureaucrats almost a year to devise the regulations, which were released last week. Naturally the Administration was pleased with the effort. Secretary of Labor Hilda Solis called the new red tape “a win-win; they benefit businesses, workers and taxpayers. I’ve seen the track record in cities like Los Angeles — high quality work on projects done on time, on budget and good job and training opportunities that strengthen our communities.”
But Obama’s first attempt at enacting a PLA resulted in the cancellation of bidding on a New Hampshire job training center because a non-union contractor balked at the restrictive pro-union rules it would have to follow as a winning bidder.
Most telling about the arrogance of Washington bureaucrats, though, is their claim (page 8 here) that these regulations are not a “major rule,” which allows them to circumvent the Congressional Review Act. Their ludicrous assertion is that PLAs will not create an effect on the economy of more than $100 million, cause a major increase in costs, or lead to significantly adverse effects on competition.
It’s a claim which is laughable. According to the Associated Builders and Contractors, these PLAs will increase construction costs 20 percent at a time when 1 of every 4 in the industry is unemployed. Thus, taking the ABC at face value, just $500 million in construction contracts let would bring the price of these new regulations above the $100 million threshold and certainly a 20 percent increase would be termed “major” to most unbiased observers. The Associated General Contractors also weighed in, calling the new regulations, “unnecessary…costly and counterproductive.”
While the proposed rules leave some wiggle room for discretion against PLAs in certain situations, it’s unlikely that this labor-friendly regime will allow exceptions but for rare cases. With billions of dollars in stimulus money still to be given out, the timing of these rules is key to promote the cause of Big Labor just in time for the midterm elections.
This is another article I did for Red County National; they chose to title it “Another Day, Another Economy-Wrecking Gift to Big Labor.”