Councilman Bill Henry's proposal to exclude non-union laborers from working on city-funded construction projects is already causing great concern among the small business community, particularly for those of us whose companies are black or minority owned.
Mr. Henry introduced a bill March 22 that calls for mandatory community partnership agreements (more commonly called project labor agreements or PLAs) on all taxpayer-supported city construction projects of more than $5 million. PLAs virtually close out all nonunion contractors and their employees from bidding and working on construction projects, leaving jobs open only to union members.
For a community where only 13 percent of the work force have chosen to join unions, passage of this bill would be devastating, leaving the vast majority of our local work force shut out of jobs on taxpayer-funded projects.
This bill is even more damaging to minority contractors. Baltimore proclaims that it is proud to "promote equal business opportunity … by encouraging full and equitable participation by minority and women's business enterprises in the provision of goods and services," but this legislation is squarely at odds with that goal. For local minority- and women-owned firms, whose employees have been historically underrepresented in terms of union affiliation, encouraging PLAs on all public projects will make it even more difficult for minority-owned contractors to compete.
The fact that only 5 percent of all minority contracting companies are union shops will result in a virtual lock-out of 95 percent of minority contractors from ever doing city business. Should this bill pass, Baltimore's union-centered procurement policy will unfortunately result in a situation that the National Black Chamber of Commerce has described as "anti-free-market, noncompetitive and, most of all, discriminatory."
The bill's supporters say project labor agreements are necessary to make sure city residents get the opportunity to work on city-funded projects. But how does a bill that excludes almost nine out of every 10 local workers accomplish that goal? The answer, of course, is that it doesn't.
What will happen when jobs on publicly funded projects are restricted to union members? Baltimore City does not have enough union workers to fulfill the job requirements on major projects. So in order to get work completed under terms of the PLA, contractors will have to bring in union members from outside the state to fill the jobs. As a result, while Mr. Henry's bill wouldn't do much for the citizens of Baltimore City, it would do wonders for residents of Pennsylvania and New Jersey.
Proponents of PLAs like to say these types of deals are necessary to ensure that workers get paid good benefits and wages. But Baltimore already has a prevailing wage law to ensure that workers are receiving competitive salaries and benefits.
Finally, PLAs are expensive. Because there are far fewer union construction firms than there are nonunion companies, there will be less competition for city projects. That means the cost of construction in Baltimore is about to get a lot more expensive. Studies show that union-only PLAs increase the cost of construction by as much as 25 percent. With the city facing a $120 million budget shortfall, there could not be a worse time for city leaders to play politics with taxpayer money.
These are difficult days for all small businesses, union and nonunion alike. But no matter what the economic climate, the city should reject any scheme that discriminates against the majority of its residents or requires that it pay higher than market price for construction services just to benefit a small, albeit very powerful, special interest group.
What is best for Baltimore's work force is to let all workers work.
Harold Scott is owner of the Coldspring Company in Baltimore.