Big Labor Bosses Plan to Exploit Hurricane Sandy Aid

Governor Chris Christie (R-NJ)Calling on New Jersey Gov. Chris Christie — pull out your veto pen. That’s because the union bosses in New Jersey are pushing a scheme to pad their own pockets with taxpayer dollars. Mike Proto explains:

Big Labor union bosses and their puppet politicians in Trenton are poised to exploit tens of billions in Hurricane Sandy relief aid and drive up the costs of future construction projects in the state unless Gov. Chris Christie acts to stop them.

Spearheading Trenton’s latest Big Labor giveaway is Senate President Steve Sweeney, D-Salem, Gloucester, Cumberland, who has strong-armed a bill (S2425/A3679) through the Legislature that would expand the reach of cost-inflating project labor agreements, or PLAs. Sweeney’s bill would broaden the application of PLAs to projects “such as highways, bridges, pumping stations, and water and sewage treatment plants” – exactly the kinds of construction projects necessary to recover from Sandy’s devastation. Sweeney is also a representative of the International Association of Ironworkers, one of the labor unions likely to reap the benefits of this bill.

Of course, blatant union favoritism is nothing new in New Jersey. For decades, Big Labor union bosses have flexed their political muscle in Trenton to enrich themselves at taxpayer expense. Project labor agreements and prevailing-wage laws tilt the playing field in their favor, stifling competition from nonunion merit shops and effectively cutting off more than 85 percent of the private construction workforce.

PLAs are akin to a minefield of mandates for merit-shop contractors, not only hurting their bottom lines and infringing on workers’ rights, but also potentially imperiling their businesses. When PLAs kick in so does the heavy hammer of collective-bargaining agreements. In most cases, merit-shop contractors are forbidden from utilizing their own highly skilled workers, and instead are compelled to hire union workers while compensating them with above-market prevailing wages. Merit-shop contractors are forced to contribute to union retirement and benefit funds while still making contributions to the benefit plans of their own employees. These mandates pile on expenses and drive up costs, but the problems don’t end there.

When merit-shop contractors take on government projects, they expose their firms to grave risk associated with pension withdrawal liabilities. According to the Associated Builders and Contractors, “signing a PLA could bankrupt a contractor or prohibit contractors from qualifying for construction bonds needed to build future projects.” Why would any merit-shop contractor willingly bid on a government construction project that subjects them to such onerous conditions?

Pro-Big Labor politicians couch their support for PLAs with all kinds of rosy rhetoric while claiming to be sticking up for the little guy. Testifying before the Assembly Budget Committee, Sweeney claimed that his PLA bill would ensure “local hire” while adding “flexibility” to the bidding process. Yet, nothing could be further from the truth. Not only are merit-shop contractors coerced into employing union workers under PLAs, but collective-bargaining agreements and union work rules often dictate which union workers are hired: typically those who have been out of work the longest and often workers who are from out of state. Given the magnitude of the recovery effort, it’s doubtful New Jersey even has the workforce in place to take on all Sandy reconstruction projects.

Mounting evidence shows just how hard taxpayers are hit by these discriminatory pre-hire arrangements. A Beacon Hill Institute study concluded that PLAs drive up project costs as much as 18 percent. Our own New Jersey Department of Labor issued a 2010 report documenting that PLA projects took 22 weeks longer to complete than non-PLA projects and the cost per square footage was an astounding 30.5 percent higher.

Across the country, state governments have been reversing course and limiting Big Labor’s influence. Many have adopted worker freedom initiatives that prevent Americans from unjustly being forced into a union as a prerequisite for employment. And even former union strongholds like Michigan have outlawed PLAs altogether.

Since Gov. Jim McGreevey issued Executive Order No. 1 back in 2002 as a payoff to his union supporters – mandating the use of PLAs on certain state-funded construction projects – New Jersey taxpayers have been the victims of the insidious relationship between Big Labor union bosses and their lapdog politicians in Trenton. American taxpayers who have been asked to subsidize the Sandy recovery should not become their latest victims. Taxpayers should rise up against this latest Big Labor money grab and urge Christie to veto this bill.