Study Shows that Project Labor Agreements Promote Bid Competition, Control Costs, and Expand Pathways to Skilled Construction Careers

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ILEPI – May 7, 2024

Analysis of Port of Seattle Projects Offers Key Insights Into Potential Impact of New Federal Contracting Rules

La Grange, IL: A first-of-its-kind analysis of construction projects from the Port of Seattle between 2016 and 2023—including airports and seaports—shows that project labor agreements (PLAs) promote competition amongst contractors, control construction costs, and deliver superior workforce development outcomes over projects completed without PLAs. The report was conducted by researchers at the Illinois Economic Policy Institute (ILEPI) and the Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign.

Read the Report, The Impact of Project Labor Agreements on Competition, Costs, Apprenticeships, and Diversity:  Evidence from Port of Seattle Projects here.

Project labor agreements are pre-hire agreements between construction project owners and labor organizations that establish the terms and conditions of employment for skilled craft workers on large infrastructure projects. They have a long history as a de-risking mechanism and construction management tool for both the public and private sectors, ranging from the Tennessee Valley Authority in 1930s to the construction of most modern NFL stadiums today. In 2022, President Biden signed an Executive Order to require PLAs on federal projects valued at more than $35 million. Most PLAs include provisions for preventing strikes and lockouts, creating uniform work rules and safety standards, harmonizing schedules between different types of crafts, and addressing skilled labor supply needs.

“As is the case with many policies involving labor standards, there is a great deal of mythology around PLAs and their impact on businesses seeking to compete for bids, on costs borne by project owners and taxpayers, and on the broader workforce supply needs of the construction industry,” said study coauthor and ILEPI Economist Frank Manzo. “With trillions in new infrastructure funding and an Executive Order from President Biden expanding the utilization of PLAs, data from Port of Seattle projects offers a useful comparative analysis that will help communities and policymakers separate myth from fact and maximize the impact of these investments.”

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Assessing prevailing wage benefits to workers, contractors, and the NYC economy

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The Worker Institute of the ILR School at Cornell University
August 3, 2023

The Labor and Employment Law Program, the Buffalo Co-Lab and the Worker Institute of the ILR School at Cornell University are hosting the launch of a report exploring the cost of prevailing wage to New York City workers and contractors.

On January 1, 2022 an expansion of the prevailing wage law in New York City came into force. The new law significantly increases the universe of construction projects subject to prevailing wage requirements. Given the recent change in legislation, researchers at the Buffalo Co-Lab and the Worker Institute will present on research that explored the cost savings of workers covered by prevailing wages versus workers who are not, in four areas of construction work: laborer, carpenter, lather, and cement finisher. On the face of it, there does not appear to be a difference between union and nonunion wages and benefits in a project covered by prevailing wage. But this changes when the percent of the cost of benefits for a union worker is compared to a nonunion worker. This is, in fact, a defining factor and here the analysis will help us better understand the nature of this relationship between cost of wages and benefits for union versus nonunion workers. Researchers will also present a newly created tool that the public can use to determine the cost of a union versus nonunion contractor for future projects.

A panel discussion will follow the presentation of research with distinguished members of government, labor unions and the real estate industry to explore together the role prevailing wage projects play in and how the building industry can better work to protect the health and safety of construction workers while building more cost-efficient projects in New York City. This session will explore the future of prevailing wage projects, the need for enforcement and responsible contractors as stewards in New York City.

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Report: Construction Contractors Cheating Workers, Taxpayers (PA)

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By John Nichols
JANUARY 7, 2019

January 14, 2019

HARRISBURG, Pa. – Unscrupulous contractors in southeast Pennsylvania routinely are violating labor laws and victimizing customers, including state and local government, according to a new report.

The report from the Keystone Research Center found many contractors in the regional Philadelphia construction industry are in a race to the bottom.

Stephen Herzenberg, author of the report, calls that “destructive competition” – cutting costs by misclassifying workers as independent contractors, cheating them out of overtime pay, investing little in worker skills and in some cases operating unsafely.

“When construction contractors and subcontractors compete by violating the law, wage theft, threatening workers’ health and safety, in the end nobody else wins,” he states.

The report says imposing stiffer penalties for labor law violations and directing more resources to enforcement agencies would help safeguard workers, law abiding contractors and taxpayers.

Herzenburg points out that effective enforcement can pay for itself by directing revenue from fines and penalties to enforcement agencies, and it can change the current landscape of the construction industry.

(Visit the Keystone Research Center Website)

(View PDF copy of Study – Illegal Labor Practices in the Philadelphia Regional Construction Industry: An Assessment and Action Plan)

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19th Annual NAFC Conference – Nashville, TN, Sept. 24 – 26, 2017

Posted by National Alliance for Fair Contracting on

NAFC will be holding its next Annual Conference in 2017 in Music City U.S.A., Nashville, Tennessee. The Conference will be held at the Sheraton Nashville Downtown Hotel, in the heart of the city. NAFC’s National Conference is attended by several hundred participants from across the nation, including representatives from labor organizations, fair contractors, fair contracting compliance organizations as well as researchers, academics, attorneys and officials from federal, state and local governments. Stay tuned for further details and registration information coming in early 2017.

(View NAFC Conference Page)

Proposed Prevailing Wage Changes Would Hurt the Ohio Economy

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Midwest Economic Policy Institute – Blog

A new study finds that weakening or repealing Ohio’s prevailing wage standard is unlikely to save taxpayer dollars. In fact, a weaker policy would increase taxpayer burdens as construction worker incomes decrease and their reliance on public assistance increases. A weaker law would also mean fewer resources for apprenticeship training in this fast-growing sector, less work for Ohio businesses and Ohio workers, and negative overall impacts on the Ohio economy.

The study was conducted by researchers at Kent State University, Bowling Green State University, Colorado State University-Pueblo, and the Midwest Economic Policy Institute.

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(Fact Sheet)

(See PDF Copy of Study)

Class War in the Capital City

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Apr 5, 2017
By Don McIntosh

There’s a top-down class war under way, but unlike the 1930s, when thugs shot workers on strike picket lines, today’s business organizations are using “hired gun” lobbyists in state capitols, to rewrite the laws – all of them – in their favor.

That’s the basic argument made by political scientist Gordon Lafer in his new book The One Percent Solution: How Corporations Are Remaking America One State at a Time. Lafer, who teaches at the Labor Education and Research Center of the University of Oregon, spent five years compiling a 50-state, 30-issue database of corporate-backed legislation. He was also there on the front lines, testifying against business-backed anti-worker laws in Wisconsin, Michigan, Indiana, New Hampshire, and other states.

The idea for the research came to him in early 2011. Lafer had just returned to Oregon after a year in Washington, D.C., as senior adviser to the U.S. House Labor Committee. Now a drama was beginning in the Wisconsin Legislature: A surprise attack on public sector workers’ right to collective bargaining drew 100,000 protesters to the state capitol. Attacks on worker rights and protections soon spread to dozens of states.

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(Hardcover of book available here)

Two Top U.S. Research Organizations: Repealing Davis-Bacon Act Would Save 0%

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MARCH 9, 2017
Published by Frank Manzo

The Brookings Institution and Wilson Center are two of the top 10 research organizations in the United States.

Together, these nonpartisan organizations have relaunched The Fiscal Ship, an online “game” that challenges people to put the federal budget on a sustainable course over the next 25 years. Picking from the menu of tax and spending options can be pretty eye-opening for many Americans.

Embedded in the game is one interesting policy option called “repeal federal construction wage law.” Picking this option means that you’d repeal the Davis-Bacon Act, which requires that workers on federally-assisted construction projects be paid the local prevailing wage. The posited argument for repeal is that it would save the government money. The argument against repeal is:

“This is just another way to push down wages of hard-working folks. Davis-Bacon blocks out-of-town firms from parachuting in with low-paid workers and under-cutting local contractors. It could lead to lower-quality work by less-skilled workers.

Interestingly, if you play the game and only choose to repeal the federal prevailing wage law from the list of tax and spending options, your plan results in a 0% change in federal revenue and a 0% change in federal spending. The game gives you a positive mark if your goal is to shrink government but a negative mark if you goal is to reduce inequality.

Ultimately, your plan gets declined as not helping to fix the budget.

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