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DIGGING DEEPER

Here’s Why Project Labor Agreements

Will Cost Us

Project Labor Agreements will increase the cost of taxpayer-funded construction projects across Oregon while discriminating against many family-, women-, and minority-owned contractors as well as the vast majority of local construction workers.

In December of 2024, Governor Tina Kotek issued Executive Order 24-31 requiring project labor agreement on nearly all state funded construction projects.

Studies have shown that union-only PLAs needlessly increase construction costs by 13 to 20 percent, while not increasing wages or worker benefits. The Willamette Week newspaper uncovered an analysis by the Oregon Department of Transportation (ODOT) which found that requiring PLAs on the agency’s projects would increase taxpayer costs 10-20%.

We Will All Pay More

With costs on the rise, the last thing we should do is artificially drive-up expenses for taxpayer-funded construction projects without increasing wages or benefits for workers.

Project labor agreements inflate project costs, meaning taxpayers will get less for their money, either through higher taxes or fewer completed projects.

While the governor’s order promises “quality, efficiency and the lowest possible cost,” numerous studies have shown that PLA projects often face cost overruns and typically result in significantly higher over all expenses.

Oregon already requires prevailing wages and benefits on public construction projects – meaning employees won’t see an increase in pay under a PLA.

UNION-ONLY PLA’S ARE DISCRIMINATORY

Instead of artificially restricting competition and preventing local workers and contractors from working on projects funded by their own tax dollars, we need to foster openness and inclusivity – particularly for small, women-owned, minority-owned, and emerging contractors who are vital to our economy.

We should be promoting training opportunities for underrepresented workers and expanding economic opportunities by keeping projects open to all, rather than limited access and restricting who can participate.

Nate McCoy, President and CEO of the National Association of Minority Contractors of Oregon recently noted that, “The governor’s order limits the participation of contractors of color and other emerging contractors in publicly funded projects, undermines their autonomy, and stifles their potential for growth. Furthermore, it dismisses the significant role non-union apprenticeship and workforce development programs play in training Oregon’s workforce, programs that are often more accessible, cost-effective, and inclusive of diverse communities. It’s important that we have collaboration with everyone having a seat at the table moving forward.”

A federal judge recently overturned former President Joe Biden’s attempts to require PLA’s on federal construction projects, ruling that they violate the principles of fair and open competition. Locally, Judge Jennifer Gardiner issued a ruling over a proposed PLA pilot project in 2024 noting that, “Employing a tool that has never been utilized before in Oregon, a tool that is premised on prioritizing utilization of union labor to the expense of open-shop labor, is prejudicial. It is an irreparable prejudice to exclude 70% of our contractors.”

PLAs Hurt Local Workers

If we want local contractors and workers building projects financed with our tax dollars, we need everyone – union and non-union – working together.

PLAs inflate the cost of taxpayer-funded construction projects by artificially reducing the number of companies, including locally owned family businesses, who are eligible to take on the work.

According to the Bureau of Labor Statistics, only 12.4 percent of Oregon’s workforce is unionized and only 16.9 percent of the nation’s construction workforce are represented by a union. By mandating a union-only project labor agreement (PLA) on taxpayer funded projects, our government is shutting out the vast majority of Oregon’s contractors and workers.

With so few union contractors and construction workers outside the Portland metro area, this also means contractors and workers from hundreds of miles away would take on projects across many communities rather than local firms and their workers.