Background: Project Agreements emerged in the 1930s as basic pre-hire agreements between the owner or contractor and the local building trades unions. These basic agreements set standard pay and benefit rates across the trades and prevented any work stoppages with no-strike, no-lockout, and speedy dispute-resolution provisions. Owners and contractors soon recognized the clear economic and managerial value of the PLA business model, and its use rapidly increased during WWII. By the 1980s, PLAs were common in both the public and private sectors, and had begun to evolve into the Project Labor Agreements in use today. Modern PLAs are negotiated on a case-by-case basis, and include sophisticated provisions that keep jobs running smoothly, promote efficiencies, and nurture the development of a skilled workforce.
Project Labor Agreements are agreed upon before a project is bid, so that all contractors and subcontractors will know exactly what to expect on the project and can cooperate to reach common goals. Successful bidders - whether union or non-union - will then hire workers for the project through the union referral system. The referral system ensures that all workers have top-notch training in safety and the crafts, which prevents costly mistakes and accidents.
Labor’s Position: Project Labor Agreements ensure that every employee has access to a fair wage, health care, and pension benefits so that he or she can support a family. The value of this opportunity for the workers, their families, and the community cannot be understated, as the influx of family-supporting wages alleviates the burden on public assistance programs, increases the tax base, and creates a boost to the local economy.
For example, the lack of health care coverage in the construction industry has created an enormous financial burden on the public. Roughly 42 percent of workers in this highly cyclical industry do not have employer-sponsored health care, and this cost has been transferred to the public. A UC Berkeley study estimates that in 2002 in California alone, 200,000 uninsured and underpaid construction workers cost the state almost seven hundred million dollars in Food Stamps, public health insurance, and other programs.
As more members of the community gain access to a family-supporting income, the local economy benefits, increased wages have a secondary multiplier effect on the economy. Workers use their pay to buy goods and services, which supports other local industries. This process is repeated, providing a general economic stimulus to the local economy.
The Minnesota AFL-CIO supports PLAs not only because they build better, cheaper, and faster, but they also act as a stimulus to fight urban blight through urban redevelopment, helping the community and training the workforce for long-term recovery.