From the desk of Stephen Cabot
The Executive Order for Project Labor Agreements, which had been issued by President Obama, has gone into effect this week. The rule encourages federal agencies to require that any company that performs a construction project for the government should have a unionized workforce, if the construction project costs more than $25-million.
Since only 15% of construction workers are unionized, 85% of construction workers will now be ineligible for government projects that cost more than $25-million. As a result, either workers will demand that they be represented by unions, which will drive up labor costs; or, more likely, non-union workers will not have an opportunity to work on government construction projects. This will prove highly injurious to companies and workers alike.
Since the construction industry currently has one of the nation’s highest unemployment rates, at 27%, President Obama’s Order will only serve to drive up that figure.
In addition, the use of unionized companies will significantly reduce competitive bidding for projects, which will result in increased costs. That burden will add to the deficit and become an additional responsibility of tax payers.
Numerous studies have demonstrated that project labor agreements increase costs by up to 20% and invite significant cost overruns, just look at Boston’s Big Dig.
Workers should have the freedom to choose whether or not to join a union. The government’s action limits that freedom, propelling workers into the avaricious arms of organized labor while worsening the American economy.