Coleman would end union favoritism in public works

About 284,000 private-sector construction workers call Pennsylvania home. According to the Union Stats database maintained by university economists, unions represent only 16.6 percent of them. 

In some cases when the commonwealth or one of its localities builds or renovates something, the Keystone State’s nonunion building professionals can’t seek the job.  

State Senator Jarrett Coleman (R-Lehigh/Bucks) wants to let them. 

“I am very much pro-opportunity, whether a contractor is a union shop or a merit shop,” he told The Independence. “Any contractor who can fulfill the project requirements should absolutely be able to bid on public works and not be disadvantaged by discriminatory and unneeded government policies.” 

In January, Coleman announced plans to introduce a measure barring any public agency in the state from giving unionized shops certain hiring advantages. He thinks taxpayers will ultimately benefit from more bidders offering their services. He’s currently recruiting cosponsors for the bill and finalizing its text, hoping to unveil it this spring. 

The senator’s Freedom in Public Contracting Act would ban government use of project labor agreements (PLAs). These are pre-hire deals ensuring labor unions will negotiate wages, job-site rules, and other contract terms for workers.

Nonunion companies (sometimes called “open” or “merit” shops in contrast to unionized “agency shops”) could theoretically bid on PLA-covered jobs, but in practice they don’t because they’d need to utilize union labor rather than their own employees. 

A year ago, Governor Josh Shapiro instructed state agencies to consider applying a PLA whenever they solicit contracts. His fellow Democrat Joe Biden championed these agreements in the White House in February 2022, ordering their use in every federal construction project estimated to cost over $35 million. 

Shapiro, Biden, and their union allies have insisted these deals guarantee employee proficiency and efficient worksites.

“Project labor agreements benefit the public and the project,” Pennsylvania AFL-CIO President Angela Ferritto said. “Why? Because they foster a skilled workforce in Pennsylvania, not just for the job but for the future. PLAs create a transparent and predictable environment that favors both the worker and the contractor by ensuring a safe job site, secure workforce, and well-developed plan before the work begins.”

This January, a federal judge declared the Biden rule unlawfully anti-competitive but didn’t end it. Republican President Donald Trump has nixed some of his predecessor’s pro-PLA actions but has yet to kill the 2022 mandate. Private litigation against it continues.

Coleman’s bill would also forbid agencies and localities from limiting bidding to companies that participate in government-favored — often union-run — apprenticeship programs. Some public entities enact these limits through responsible contractor ordinances (RCOs). 

PLAs and RCOs have both arisen in Bucks recently. In 2020, all three county commissioners voted for an ordinance mandating that bidders for government projects valued at or above $250,000 use what the federal or state government deem “Class A” training programs. 

Democratic commissioners Diane Ellis-Marseglia and Bob Harvie as well as their Republican colleague Gene DiGirolamo have all enjoyed union backing for their campaigns going back many years. None of the three answered a request for comment.

Unions say their programs deservedly tend to win the vaunted “Class A” status, but Coleman senses others don’t because of bureaucratic gatekeeping. 

“I personally know many merit-shop contractors who not only recruit from the leading career and technical education schools in the area, but also run their own effective training and safety programs with industry-certified supervisors and trainers,” he said.

RCOs are the law in numerous Bucks municipalities, including Middletown, Lower Southampton, Falls, Lower Makefield, Bristol Borough, Bensalem, Warminster, and Doylestown Borough. Meanwhile, localities such as Bristol Township School District have embraced PLAs.

Nonunion firms frozen out by these policies believe all taxpayers should share their outrage, reasoning that exclusionary practices drive up costs. 

“Both [RCOs and PLAs] restrict competitive bidding,” Pennsylvania Council of General Contractors Executive Director Hank Butler said. “They also discriminate against those employees who choose to work for a company as opposed to a union hall.”

Do pro-union policies benefit taxpayers?

The Harrisburg-based Keystone Research Center, a liberal think tank supported by organized labor, argues the kind of measures Coleman opposes improve efficiency and control costs by securing well-trained (and better paid) workers and preventing work stoppages. 

“Construction firms vary widely in how much they train their workers and in their workers’ experience,” said center executive director Stephen Herzenberg. “Responsible contractor ordinances and project labor agreements help ensure that public projects access contractors with the best-trained and most skilled workers. That’s one reason project labor agreements are used widely on major private-sector projects, like auto plants and petrochemical product changes, including in Pennsylvania.”

Herzenberg touted several studies including one by Cornell University positing that PLAs lowered construction costs by between 16 to 21 percent. Another report by the consultancy Independent Project Analysis found that union labor is fourteen percent more productive and four percent less expensive than open-shop labor. Furthermore, he noted, University of Utah economist Peter Philips and his research partner Emma Waitzman studied PLAs and concluded they didn’t reduce the number of bidders on projects.

Free-market analysts see a contradiction there. 

“Unions can’t boast that they increase wages for workers while, at the same time, claiming PLAs save costs,” said David R. Osborne, senior fellow at the Harrisburg-based Commonwealth Foundation. “And they can’t claim PLAs increase bidding on a project when the very purpose of a PLA is to exclude non-union contractors.”

He acknowledged that private businesses sometimes accept PLAs, but added that they often do so reluctantly in response to union clout.

“In a place like Philadelphia where unions can band together and make life really miserable for a developer, sometimes a developer just wants to signal to the unions that they’re devoted to the cause and don’t want any trouble,” Osborne said. “There’re some extortive properties to it.”

Liya Palagashvili, a Lancaster resident and senior research fellow at George Mason University’s Mercatus Center echoed Osborne’s assessment. She said public PLAs combine stifled competition, high labor costs, antiquated work rules, and burdensome administration — a perfect storm that wallops taxpayers.

“The weight of economic research suggests that PLAs tend to be associated with higher costs,” she said, pointing to a litany of studies. 

Those came from government institutions like the U.S. Government Accountability Office and the Department of Veterans Affairs, as well as academic ones like Suffolk University and the Journal of Labor Research. The takeaway? Higher project costs — a difference of sixteen percent, according to one analysis. 

In a memo to Senate colleagues, Coleman cited the higher costs of union favoritism in the nearby city of Reading, which adopted an RCO in 2022 but later waived that law to attract bidders. 

Others similarly consider the Reading ordinance a faux pas.

“The first project that came out [of it] was over budget,” said Jim Willshier, government affairs director at Associated Builders and Contractors Keystone, a group representing open-shop contractors in Harrisburg, Reading, and surrounding areas. “They’ve been bleeding dollars on projects subsequent to that.” 

Union-friendly rules failing to tighten budgets and schedules occasionally make national news, most infamously Boston’s “Big Dig” which began in 1991 and extended Interstate 90 under Boston Harbor. The PLA-covered tunnel excavation was initially expected to cost taxpayers less than $3 billion. Expenses ballooned to $14.8 billion, according to the federal Department of Transportation.

“Not only was it way over budget but it was way over time,” lamented Mark Mix, president of the National Right to Work Committee, a nonprofit advocating for free choice between union affiliation and individual bargaining. 

And the Big Dig frustrated another claim organized labor frequently makes in its defense: that agency shops promote safety. In 2006, the year it concluded, the project caused a woman’s death when a ceiling panel fell onto her car. 

In another instance of inefficiency in a PLA-governed project, union carpenters and electricians went on wildcat strikes during the San Francisco International Airport’s rebuilding in 1999. Resultant delays bled taxpayers $1 million daily during the stoppages. With an original price tag of $2.4 billion, the reconstruction was among the largest PLAs ever awarded by that time. 

“The evidence was pretty clear that [these provisions] did not save time, they did not save money, they came in over budget in many cases,” Mix said. “Even if they do bring it in ‘on budget and on time,’ generally the cost for these types of bids are usually between twelve to 20 percent higher than it would be if it was normally competitive bidding.”

Despite these events, California and a few other states like New Jersey and New York have statutes or regulations encouraging PLA usage. Yet other states have pushed back: Over 20 restrict government PLAs. 

Some places have ditched apprenticeship-program mandates too, finding them onerous. Lower Makefield Township repealed that part of its RCO in 2010 to access more contractors.

Fear not, says Palagashvili: Unions’ skill advantage is a myth. 

She points out a report by Peter Kuhn and Arthur Sweetman in the Journal of Labor Economics showing open-shop workers have more transferable skills when they seek new employment. The study observed that nonunion tradesmen rely more on their skills for advancement, rather than seniority. 

“When they go find a different job, they tend to get higher wages in those new jobs,” she said. “That’s not the case for unionized workers, especially older unionized workers.”

Coleman expressed similar confidence that many workers outside of unions handle big projects with professionalism. His bill is aspirational for now: Pro-union Democrats — a redundancy — control the state House of Representatives, some Republicans in both chambers enjoy union backing, and the governor made clear his support for PLAs. But Coleman believes the fight for more inclusive construction bidding starts now. 

“Good people should be able to bid on these contracts and then the folks that award the contract should be able to determine what they want to do,” he said. “They should know outcomes from both ‘sides’ if you want to say it. I don’t believe there has to be a ‘side’ in this game.” 

Bradley Vasoli is the senior editor of The Independence.