The Legislature is rapidly advancing legislation, Senate Bill 231, that would allow government agencies to deny Nevada construction workers the opportunity to work on taxpayer-funded projects. This is unfair.
Government-mandated project labor agreements (PLAs) could effectively prevent 80 percent of Nevada’s construction workforce — those who don’t belong to a union — from competing to build and work on projects funded by our tax dollars. If signed into law, SB231 will also needlessly increase the cost of construction and contribute to the skilled labor shortage that is plaguing America’s construction industry and hindering Nevada’s economic competitiveness.
When mandated by a state agency or county government, PLAs typically force builders — union or not — to follow union work rules and hire most or all workers from union halls. That effectively limits the pool of bidders, because nonunion contractors don’t want to abandon their employees and quality control practices — key components for a safe and productive workplace — for strangers from union halls governed by unfamiliar rules.
The negative impact of government-mandated PLAs on Nevada’s nonunion construction workforce, which comprises almost eight out of 10 members of the state’s construction industry, is especially severe. They lose the wages and benefits they are required to contribute to union plans during the life of a typical PLA project unless they join a union and/or pay union fees and meet plan vesting requirements. It’s a form of wage theft that will harm working families employed in Nevada’s construction industry.
Many lawmakers state they support policies to ensure local construction jobs go to local residents and help women- and minority-owned businesses. PLAs, however, ensure that out-of-state union travelers have priority over members of Nevada’s local skilled construction workforce who have chosen not to join a union. In addition, women- and minority-owned businesses are largely nonunion and unlikely to benefit from PLAs promoted by SB231.
In a March 1 letter opposing SB231 sent to Nevada’s political leaders, National Black Chamber of Commerce Chief Executive Officer Harry Alford wrote, “Government-mandated PLAs are opposed by the NBCC because 98 percent of minority-owned contracting firms are not affiliated with unions. African American-owned contracting firms are typically small businesses and employ their own core workforce of skilled construction workers who are not unionized and are generally more diverse than construction workers coming from union hiring halls.”
The truth is, the impetus for lawmakers to pass SB231 is purely political — to create jobs for union labor and steer contracts to unionized contractors supporting their campaigns. But the unfortunate effect is that these restrictions drive up costs.
A May 2017 study by the Beacon Hill Institute in Massachusetts found that PLAs raised the base construction cost of Ohio schools by 13 percent — $23 per square foot in 2016 prices — relative to non-PLA projects. Studies on the effect of PLA mandates on California, New Jersey, New York, Connecticut, and Massachusetts school construction all reached similar conclusions. Simply put, Nevada cannot afford such waste.
For these reasons, the 2015 Legislature wisely passed a law inviting all Nevadans to compete for construction work on a level playing field by prohibiting government-mandated PLAs. The law protected $4.7 billion in state and local construction from PLAs in 2016 and 2017. A total of 25 states have passed similar measures, ensuring fair and open competition on taxpayer-funded construction projects so the public can get the best possible outcome at the best possible price.
Elections have consequences. And while we understand construction labor unions are a core constituency of the Democratic Party, which currently controls all the levers of government in the state, it makes little sense for elected officials to turn their backs on hard-working Nevadans and waste taxpayer dollars because it is politically expedient.
By rejecting SB231, Gov. Steve Sisolak and the Legislature can champion the benefits of fair and open competition and welcome all of Nevada’s construction workforce to rebuild Nevada at a price that’s right for the taxpayer.
Mac Bybee is president/CEO of the Associated Builders and Contractors Nevada chapter.