Opinion 1: Union Labor Comes At Too High A Cost
By Ronald N Cogliano
Special to the Worcester Business Journal
By now, Garage Mahal at the Union Station is legend in the City of Worcester. Hire only union contractors and spend $21.5 million to build a parking garage half the size of one in Lowell that cost the same amount of money.
Hiring union only - done under a mechanism called a project labor agreement - is financial madness, especially when taxpayer dollars are being spent. But it continues, even today, as the University of Massachusetts Medical School's new $90 million clinical practice center is constructed under a PLA. Non-union need not apply.
Investment Potential
PLAs do more than block Greater Worcester open-shop contractors from bidding to work on publicly funded projects. PLAs do more than deny 80 percent of the construction workforce a chance to work. They raise taxes and stifle economic development, making it everyone's business.
PLAs add 14 to 20 percent to the cost of projects, according to a study of public school construction by the Beacon Hill Institute at Suffolk University. BHI has demonstrated that PLAs add a whopping $16.51-per-square-foot to construction costs. That's an additional $2.1 million tacked onto the cost of a 125,000-square-foot building.
Applying BHI's figures, consider the impact of paying $4 million more than necessary for a parking garage. What else could Worcester do with $4 million? How about invest the savings into other economic development projects or return it to property taxpayers, especially businesses who pay a higher rate?
Again, applying BHI's figures, UMass Medical could have saved as much as $18 million, which could have gone to construct another facility or perhaps cover free care for the indigent. And new tenants in the building would benefit by paying lower rents.
It is an indisputable fact that 80 percent of the construction workforce in Massachusetts is non-union, according to the U.S. Department of Labor, the one and only official source for such data. The PLAs deny 80 percent of the Greater Worcester construction workforce the chance to work on projects, creating a drag on the local economy as these hardworking people struggle to earn a living.
While local businesses pay high property and state taxes that pay for PLAs, their customers have less to spend because they are locked out of public jobs in their own neighborhoods. The sweetheart deals for unions rob local businesses of much needed income to pay for essentials and stay competitive.
Despite the additional cost of PLAs, they offer no measurable benefit. State law already guarantees workers on public construction projects are paid the same wages and benefits and have the same training and licensing. A favorite argument of union leaders is quality and no delay, but there is no reliable measure of quality, and they seem to forget that the Big Dig - billions over budget, years behind schedule and plagued by leaks and a collapsing ceiling - was built using a PLA.
Fair and open competition in public bidding is the American way. Labor unions should compete on the same playing field as anyone else. No more special deals at the expense of taxpayers and businesses.
The open-shop community is not getting or looking for any special deals or handouts. So why should the vocal and politically connected unions get them at taxpayers' expense?
Ronald N. Cogliano is executive director of the Merit Construction Alliance, an organization based in Kingston that advocates for non-union construction firms.
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