2019/10/16 Council Agenda Packet

construction projects procured by government entities, from the construction of the Cape Canaveral Space Center in Florida to the Central Artery project(the "Big Dig")in Boston. PLAs used on prominent private sector projects include the Alaskan Pipeline and Disney World in Florida. The Arguments Against and For PLAs Government-mandated PLAs on publicly-financed construction projects are typically issued after lobbying campaigns from labor unions to help them regain lost market share. The logic of mandating PLAs is,however,increasingly dubious given the decline of union membership across the workforce and particularly in the construction sector. Only 13 percent of the U.S. private construction workforce currently belongs to unions.' PLAs typically require that general contractors and subcontractors must hire all construction labor through union halls and union apprenticeship programs, pay union dues, contribute to union-sponsored retirement plans and follow union work rules. PLAs force contractors to hire union workers in place of most of their own workforce. The contractors and any existing employees are required to contribute to union benefit plans even if they cover their own workers under their own policies. The work rules restrict the contractors from using their own,often more flexible,operating rules and multiskilling procedures across multiple trades with their own non- union employees. These restrictive conditions cause costs to rise for a project subject to a government-mandated PLA. Merit shop (non-union or open shop) contractors contend that their competitive advantages are nullified by a PLA even as they comply with other mandates such as prevailing wage laws. The result is that in practice,if not in principle,they are unable to bid competitively on jobs that have a PLA requirement. In turn, the absence of open shop bidders for PLA projects results in fewer bidders for the project, and with fewer bidders,the lowest bids come in higher than if open shop 8 U.S.Bureau of Labor Statistics, "Economic News Release,"January 18,2019, https://www.b1s.goyinews.release/union2.nr0.htm. The Anticompetitive Effects of Project Labor Agreements on Public Construction in Washington State 5