Five Reasons Why We Don't Need Mandated PLAs

According to the most recent data from the U.S. Department of Labor’s Bureau of Labor Statistics, just 11.7 % of the 2022 U.S. private construction workforce belonged to a union. This means PLAs, when mandated, discriminate against nearly 9 out of 10 construction industry employees who want nothing more than to rebuild their communities at a price that is best for taxpayers but have chosen not to affiliate with a union. This data is consistent in the state of Maryland and confirms that close to 90% of Maryland construction workers who are non-union would be ineligible to work on mandated PLA projects. 

PLAs are anti-competitive because nonunion contractors may choose not to bid because either their members would be required to join a union if the contractor wins the bid or the contractor would not be able to use its own workers if the PLA required hiring through the union hiring hall. Additionally, despite the fact that non-union contractors have their own benefits plans, PLAs require them to pay their workers’ health and retirement benefits to union benefit and pension funds. Thus, companies have to pay benefits twice: once to the union and once to the company plan.

Project Labor Agreements lead to inequity and exclusion, hurting Maryland construction workers. Nonunion employees are forced to pay union dues and fees and/or join a union in order to work on a PLA project. Those same workers would invariably suffer wage theft due to a mandated PLA as nonunion workers (and some union workers) lose an estimated 34% of wages and benefits earned on a PLA project unless they accept union representation, join a specific union, pay membership dues and meet the union benefits plan’s 5 year vesting requirements.

Among the reasons most local Maryland minority firms are non-union contractors include, (1) minority and women-owned firms are smaller and operate on lower margins making them less able to sustain the additional costs imposed by mandated PLAs, (2) the long history of discrimination within the union construction trades against minorities and women-owned firms, and (3) Mandated PLAs significantly limit the available workforce, especially during this time of high inflation in the construction industry, a particularly difficult burden for small and minority businesses in Maryland.

By limiting bidders, mandated PLAs consistently and unnecessarily drive up costs and end open, fair and competitive bidding on construction projects. They also prevent capable non-union Maryland businesses from bidding on contracts to build roads, bridges, schools and other structures. Ultimately mandated PLAs guarantee that Maryland taxpayers pay 12% to 20% more and the local community benefits less.