Unions defend labor agreements

New high school project raises issue of requiring union workers

Posted: Wednesday, April 09, 2003

Local unions say the city's requirement of union labor on large publicly funded construction projects doesn't cost more, but does guarantee skilled labor and helps keep money in the community.

Unions were caught off guard late last month by one of the recommendations of a professional review of the design for the new Mendenhall Valley high school. The review suggested the city not mandate union labor for the project, or at least limit its scope, to save money.

"Our main concern is that we get local hire on these projects," said Don Etheridge Jr., business agent for the Alaska State District Council of Laborers and a former Juneau Assembly member. "Seeing as how it's the locals that are paying for these projects, in most cases, we are the ones who should be getting the work on it."

The city has required union work, written into what are called project labor agreements, five times since the mid-1990s, including the upcoming Bartlett Regional Hospital expansion, unions said. The Assembly approves them on a case-by-case basis. Unions say they supply local labor, drawing from Anchorage or Fairbanks only if they can't fill the jobs with Juneau workers.

City Public Works Director Joe Buck said the project labor agreements provide a stable work force of skilled labor, with a higher level of local hire. Some contractors agree.

"I think the real pros (of PLAs) are it certainly gives your local labor work force a good shot at getting a job," said Jim Williams, owner of North Pacific Erectors, a unionized contractor in Juneau.

But Pete Dawson, owner of the Bellingham, Wash.-based Dawson Construction, said project labor agreements add to construction costs by reducing competition for bids and adding to nonunion contractors' labor costs. He was on the team of architects, engineers and builders who reviewed the design for the Valley high school.

The agreements discourage some general contractors and subcontractors from bidding, Dawson claimed in the review team's summary, presented March 28. Fewer bids typically result in higher costs, he said.

Dawson also said nonunion subcontractors would have higher labor costs under a project labor agreement. He said the companies would pay their workers high enough wages to cover their company or personal benefit programs, and at the same time pay into a union benefits program while they worked on the Juneau project.

Dawson recommended the city try to meet the goal of local hire by other means, such as setting minimum percentages of union labor, or offering incentives to contractors, or by using project labor agreements only for trades in which there are multiple Southeast bidders.

The review team's recommendations, which include a host of details about the design and materials for the new school, will be taken up by the joint city-school district project team at noon April 15 at the downtown fire hall conference room.

If the Assembly uses the recommendation as an opportunity to question project labor agreements, it can expect to hear strong opinions.

Wayne Coogan of Coogan Construction of Juneau, which won the contract to fix up JDHS, said having a project labor agreement saved the city $1 million - the difference between Coogan's bid and Dawson's bid.

"In reality, PLAs not only save the city money, but they keep the money recirculating in Juneau," Coogan said. "Our firm has undertaken four city projects under PLAs. Totaling $32 million, these projects were about $2.1 million less than the price for out-of-state bidders."

Local union representatives said project labor agreements don't apply to all workers on the job. The agreement for the $21 million renovation of JDHS doesn't apply to workers who aren't represented by the 11 signatory unions.

Union representatives said they doubted nonunion contractors who sign on with a Juneau union for a project would pay into the company's or worker's benefits program and to the union during a project with a labor agreement.

Max Mielke, business manager for the Plumbers and Pipefitters United Association Local 262 in Southeast, said nonunion contractors would save money because they don't have to pay payroll taxes on union benefits.

C. John Eng, president of Cornerstone, a general contracting company in Anchorage, said his company has bid on projects with labor agreements, including the upcoming Bartlett Regional Hospital renovation, and rarely has difficulty receiving multiple bids from subcontractors.

Eng also said he hasn't paid two sets of benefits for workers under project labor agreements.

"We never pay twice. We just pay in to the union benefits and we never add to it again," he said.

But Eden Larson, president of the Associated Builders and Contractors of Alaska, said she knows of nonunion contractors that have doubled paid benefits.

Companies do that, she said, because they want to maintain a good relationship with their employees, who in many cases wouldn't put in enough time to be vested in a union retirement program.

Chuck McGraw, owner of McGraw's Custom Construction, a general contracting company in Sitka, said he has seen nonunion subcontractors figure a high wage rate in addition to union benefits when bidding on a union job.

McGraw said he opposes project labor agreements mainly because they limit the freedom of companies and workers to choose whether to sign up with a union, if they want the job.

He said those of his workers who don't want to join unions want to see the money for benefits in their paycheck. And McGraw, whose company bid on the JDHS renovation, said some subcontractors refused to bid for the job because of the union requirement.

"There's no question that it reduces the amount of competition (for bids) and when you reduce the amount of competition, the price is going to go up," McGraw said.

The Alaska chapter of the Associated General Contractors of America also opposes project labor agreements, although some of its 600 members are unionized.

"We believe fair and open competition is in the public's interest," said Executive Director Dick Cattanach from his Anchorage office. "You know if you're requiring a PLA, people who aren't union probably don't have a chance to bid on that."

Eric Fry can be reached at efry@juneauempire.com.

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