Project labor agreements are good for the state and job growth

Elizabeth Warren
Chrissy Lynch
August 6, 2024

In the past three years, the Biden-Harris administration has delivered more than $20 billion in federal investment to Massachusetts. Thanks to four historic pieces of legislation — the American Rescue Plan Act, Infrastructure Investment and Jobs Act, CHIPS and Science Act, and Inflation Reduction Act — the United States is building roads and bridges, expanding broadband access, upgrading public transit and energy infrastructure, switching to electric school buses, funding research and innovation, supporting firefighters, and enabling community projects.

When these federal dollars flow into Massachusetts, project labor agreements help ensure that they support job growth. With a long history in both the public and private sectors, PLAs are collective bargaining agreements between workers and contractors that ensure good wages and benefits, safe working conditions, and sustained investment in the local economy and workforce. Under a PLA, Vineyard Wind will power 400,000 Massachusetts homes and businesses and generate nearly 1,000 union jobs — while it reduces emissions by 1.6 million tons and energy costs by $1.4 billion.

PLAs also ensure that federally supported jobs create meaningful opportunities across the board. Currently, Massachusetts Building Trades Unions train 80 percent of all apprentices of color and 88 percent of all women apprentices in our state, and they have been critical to achieving the Commonwealth’s diversity goals for construction. Under a PLA, Encore Boston Harbor casino employed more women than any project in history.

Those opportunities make a real difference. Nationwide, collective bargaining agreements raise wages for workers by 10.2 percent on average. They also help close racial wage gaps, boosting pay for Black workers by 13.1 percent and for Hispanic workers by 18.8 percent, and narrow the gender wage gap from 78 cents on the dollar to 83 cents.

Even so, some take issue with PLAs. To skeptics, we say, first, that if Massachusetts ditched PLAs, we’d lose out on federal funding that is tied to them. But it’s more than that. Multiple studies have found that PLAs do not increase project costs. In fact, to the extent that PLAs support union standards, costs are actually lowered. A 2022 study of 1,550 US construction projects found that use of union labor reduces overall costs by 4 percent.

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Project labor agreements on federal construction projects will benefit nearly 200,000 workers

Posted February 9, 2022 at 11:07 am by Ihna Mangundayao, Celine McNicholas, and Margaret Poydock

President Biden recently signed an executive order (EO) requiring project labor agreements on federal construction projects over $35 million, a move that is expected to affect $262 billion in federal construction contracting and improve job quality for nearly 200,000 workers.

Project labor agreements (PLAs) are used primarily in the construction industry to establish the terms of employment for all workers on a project. Generally, PLAs specify workers’ wages and fringe benefits and may include provisions requiring contractors to hire workers through union hiring halls, otherwise establish a unionized workforce, or develop procedures for resolving employment disputes. PLAs often include language that prevents workers from striking during the project while also preventing employers from locking workers out.

PLAs are effective mechanisms for controlling construction costs, ensuring efficient completion of projects, and establishing fair wages and benefits for all workers. PLAs also help ensure worker health and safety protections while providing a unique opportunity for workforce development. These agreements can be written to engage local populations, provide jobs for underrepresented groups, and develop experience for apprentices.

Project labor agreements don’t raise construction costs

Evidence shows that PLAs do not increase construction costs. For example, New York City embarked on a $5.3 billion project in 2009, and the use of four PLAs was estimated to lead to 1,800 new jobs while saving the city approximately $300 million. A study from the Berkeley Labor Center also found that projects with PLAs attracted a “similar number of bidders” and “came in at a slightly lower price” when compared to projects without PLAs in place. Another 2015 paper from University of Utah economists compared nine PLA affordable housing projects with 121 affordable housing projects built without PLAs and found that the PLA projects were not more expensive to build.

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(White House Briefing)