Pioneer Institute Statement on the Project Labor Agreement Provision in the Massachusetts Economic Development Bill
Governor Healey should veto a provision in the recently passed economic development bill that would ease restrictions on public entities seeking to use project labor agreements on public works or building projects. PLAs require that all trade labor on a project come from unions, essentially locking out the nearly 82 percent of Massachusetts construction workers who choose not to affiliate with a union.
Such a provision reduces competition and, in turn, raises costs. A 2021 RAND report on the effects of PLAs on affordable housing production in Los Angeles found a 14.5 percent increase in construction costs for projects subject to PLAs. RAND also found that without PLAs approximately 800 additional units of housing (an increase of 11 percent) could have been built with the same funding.
That’s why, in a 1999 ruling, Massachusetts’ Supreme Judicial Court found that PLAs are anti-competitive and often violate state bidding laws. The court set limits on their use, finding that “A project must be of substantial size, duration, timing, and complexity, and the interplay between all four factors must be considered.” The court also said a study must be done showing the PLA meets these factors.
Earlier this year a Hampden County Superior Court stuck down a PLA on a $325 million Westfield water treatment plant project, ruling that PLAs pose “such a significant disadvantage to open shops as to render a competitive bid impossible…. the PLA excludes open shops from bidding, as it essentially requires bidders to execute an agreement to use union laborers on the Project,” thereby depriving the public of the benefits from an open, fair, competitive, and robust bidding process.
After the PLA was dropped, the winning bid on electrical services alone was $15 million below the lowest union subcontractor. Importantly, the savings don’t come on the backs of workers, as public construction projects are covered by state and federal prevailing wage laws that guarantee union-scale wages for all workers, regardless of labor affiliation.
Soon after the Westfield PLA was struck down, The Boston Globe wrote in an editorial that “There really is no strong policy argument for imposing a PLA… Such agreements usually drive-up costs for the taxpayer… Further, it is unfair to the many Massachusetts construction workers who are not union members. It means that those workers are paying taxes to help fund projects that PLAs would exclude them from working on.”
The Springfield Republican also underscored the detrimental impact of PLAs on the Commonwealth’s construction industry in two editorials.
PLAs are particularly harmful to construction workers of color. In testimony before the U.S. Civil Rights Commission, the leader of the National Black Chamber of Commerce said that 98 percent of Black and Hispanic construction companies are non-union.
Closer to home, during debate over a PLA that was ultimately approved for rebuilding the Holyoke Soldiers Home in 2021, the Black Economic Council of Massachusetts wrote, in a letter to the state Senate, “We are deeply concerned about the historical exclusionary effect that PLAs have had on Black, Latinx, Asian, Indigenous, immigrant women and LGBT workers and construction firms. [PLAs] prohibit construction firms owned by Black people and other people of color – which are overwhelmingly open shop enterprises – from using their own workforce that they have hired, trained, developed and retained, and that are drawn largely from communities of color.”
It’s never easy to buck labor in Massachusetts, but the facts here are overwhelming.
