WASHINGTON — Nonunion contractors and minority and female workers fear that they could miss out on major construction projects funded by the economic stimulus package because President Barack Obama has issued a directive on contracting that favors union labor.
An executive order that Obama signed in February "encourage(s) executive agencies to consider requiring the use of project labor agreements" on federal construction projects of $25 million or more.
PLAs are collective bargaining agreements with labor unions that set the terms and conditions of employment on large construction projects. They typically make unions the bargaining representatives for workers at sites, even though 85 percent of U.S. construction workers aren't union members. They also require nonunion workers to join unions and pay membership dues for the projects' duration.
Because white males dominate the membership of the skilled construction trade unions, however, jobs for minorities and women could be hard to come by on large stimulus-bill projects unless the PLAs set goals for their inclusion.
The issue has pitted the interests of organized labor against those of minorities and women, though all three groups are mainstays of the Democratic Party and of Obama's winning coalition. The dispute also has revived a decades-old debate among diverse business groups that say PLAs skew the bidding process in favor of union contractors
With construction jobs at a premium in the unraveling economy, large stimulus infrastructure projects hold enormous employment opportunities, and an equal degree of uncertainty, for some groups.
"In an environment where jobs are already scarce, the promise of infrastructure jobs is supposed to be a promise for all," said Catherine Singley, a policy analyst for the National Council of La Raza.
"If you're giving preference to unionized workers, you're definitely leaving out Latinos, who generally do not belong to unions. And you're exacerbating the disparities they already face in accessing high-quality jobs."
Obama's order could put Latino workers at a disadvantage, because most PLAs require that additional workers come only from union hiring halls and apprentices only from union training programs. Latinos, who can be of any race, account for 30 percent of U.S. construction workers, but most work on a temporary basis for smaller, nonunion contractors and aren't heavily recruited by the unions, Singley said.
Last year, according to Department of Labor statistics, blacks and women made up only about 11 percent of the nation's working construction laborers and sheet-metal workers, and about 8 percent of pipelayers, brickmasons and carpenters. Just 3 percent of structural iron and steel workers were African-American or female.
For many years, women and minorities trying to join construction unions faced discrimination, ethnic and family nepotism and little access to union apprenticeship programs, said William Gould, a law professor at Stanford University who's studied the issue for more than four decades.
John Gaal, the training director at the Carpenters' District Council of Greater St. Louis and Vicinity, said that times have changed.
"It curls my stomach when I hear that," Gaal said. "I can't tell you the efforts we've made to overcome those issues. I don't have any relatives who are carpenters, and I've made it to where I'm at."
Depending on the language, PLAs can set goals for hiring and training women, minorities and people from disadvantaged communities.
"Whoever's paying for the project negotiates terms of the PLA. They're the ones in a position to have any requirements they want. It's their money," said Todd Swanstrom, a public policy professor at the University of Missouri-St. Louis.
Regulations to implement Obama's executive order will be announced in May.
Tom Gavin, a spokesman for the White House budget office, wouldn't comment on what the guidelines may include, but he said: "I think it's safe to say that the president wants to make sure all of America gets back to work, and the guidance that we put forward will reflect that."
Harry Alford, the president of the National Black Chamber of Commerce, said that his organization would scrutinize the agreements and consider suing if they didn't include mechanisms to boost minority hiring.
"If we sit back and don't get involved in this stimulus, we will definitely get the short end," Alford said.
The Obama administration argues that PLAs eliminate labor disputes and promote the timely completion of projects by ensuring a steady supply of skilled union workers on sites with multiple employers.
Advocates say that PLAs also bring about workplace harmony by banning strikes, lockouts and work slowdowns, which cause delays and cost overruns. They also say that the wage agreements in PLAs make for more accurate cost estimates and bids on public projects.
"Project labor agreements are a tried and true way of making sure that taxpayers and local workers of all backgrounds and communities get the most for their money," said Terry O'Sullivan, the general president of the Laborers' International Union of North America.
The laborers group is one of the most diverse unions, with some 30 percent Hispanic, 25 percent African-American and about 10 percent female membership. However, it's also the least skilled of the construction trades.
Others say that by ensuring access to well-trained union workers, PLAs make for safer and more productive workplaces. Swanstrom said that nonunion contractors typically provided less training for their workers.
"They don't do it because their competitor may offer their workers more money and lure them away, but all companies that agree to PLAs have access to skilled workers first," he said.
Nonunion contractors, however, argue that PLAs concede too much power to construction unions. They say that while PLAs allow nonunion or "open-shop" contractors to bid on projects, they usually attach restrictions that make it cost-prohibitive to do so.
"They set up so many hurdles that a lot of nonunion contractors don't even submit bids. They just figure why bother with the hassle," said Ben Brubeck, the labor and state affairs director of the Associated Builders and Contractors Inc., which represents nonunion firms.
For example, PLAs require nonunion contractors to adopt union work rules that prohibit employees from performing multiple tasks. They require that additional workers come only from union hiring halls and apprentices only from union training programs. Most also require nonunion contractors and their employees to pay into union benefit plans, even if they already contribute to their own plans.
Women Construction Owners and Executives, USA, and the Associated General Contractors of America — both of which represent union and nonunion firms — oppose PLAs because, they say, the agreements leave contractors with little say about whom they can hire.
"PLAs undermine local bargaining agreements that have already been negotiated between unions and contractors and leave them to work under an agreement they didn't help write," said Stephen Sandherr, the chief executive officer of the Associated General Contractors.
Gould, who chaired the National Labor Relations Board under President Bill Clinton from 1994 to 1998, wants minority-hiring goals for disadvantaged groups applied to all public construction projects that have PLAs.
"For almost four decades, the U.S. government has been saying goals and timetables are appropriate for minority recruitment. And these goals and timetables should apply to project labor agreements wherever they are," Gould said.
Several studies have found that PLAs increase construction costs by 10 to 20 percent.
"By closing off competition from nonunion companies, you make it more likely that the bids are going to be higher and the cost of the construction is going to be artificially inflated," said Paul Kersey, the director of labor policy at the Mackinac Center for Public Policy in Midland, Mich.
However, studies by Dale Belman, a Michigan State University economics professor, suggest that higher construction costs on projects with PLAs result from the extra amenities and requirements often found in large, complex projects, not because of the PLAs themselves.
The U.S. Chamber of Commerce and other groups are considering a lawsuit over whether Obama's order violates the National Labor Relations Act by restricting the labor relations of private contractors.
The National Association of Women in Construction hasn't taken a position on Obama's order, but groups that oppose it include the National Federation of Independent Business, the National Association of Small Disadvantaged Businesses and the northeast chapter of the National Association of Minority Contractors.
Obama's executive order reverses an order by former President George W. Bush that had banned PLAs on federal projects since 2001. Like Obama, Clinton issued an executive order in 1997 that reversed a previous ban on PLAs by former President George H.W. Bush.
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