Proposed labor agreement requirement would hurt contractors doing business in Baltimore | COMMENTARY

It doesn’t make any sense. Why are there Baltimore City Council members pushing legislation that would, in essence, exclude nearly 90% of the local construction workforce from working on large city projects?

But that’s precisely what will happen if the City Council votes to approve the Project Labor Agreements bill. The legislation mandates labor agreements for any contract valued above $25 million or long-term capital projects at multiple locations with a combined value of more than $15 million “for all persons who will perform work on a construction project.”

In other words, anyone who wants to work on those projects must be a member of a union or join the union.

[ Baltimore Council bill would require union agreements before contractors win major city projects ]

It would be one thing if the majority of the city’s construction workforce belonged to a union, but this is Maryland where nearly nine out of every 10 workers have chosen not to carry a union card.

The bill acts as a barrier to merit shop contractors because it requires them to change their business models and become a Union signatory as a condition of working on public works projects. Labor agreements require payments from employee to union pension and health plans which do not benefit merit shop employees; it also creates liability for the signatory company should those pension plans become insolvent. Finally, merit shop contractors want to perform work with their own workers and not be limited to who the union hall provides.

And of course, you don’t need to be an economist to understand that when you hinder competition, the price goes up. Numerous academic studies have found that on average, government-mandated union-only projects drive up costs 12% to 18% higher than projects that are competitively bid through fair and open competition.

Don’t let anyone tell you that all a local resident has to do to get a job is join a union. Because even if they do get to join a union, they will be dead last on the “bench” to get the next job because of seniority rules in most contracts. Collective bargaining agreements require the most senior workers be placed in job opportunities first; this puts new members at the back of the hiring line, even if they had previously worked for a merit shop employer.

Simply put, establishing any third party entity as the toll taker and gatekeeper on public works projects is bad policy. The goals of local hiring, apprentice training and the hiring of returning citizens can be accomplished through the current procurement process by placing requirements in bid documents without dividing the construction industry.

When a new hospital, data center or apartment building goes up in Baltimore, chances are it was built by craft professionals unencumbered by union membership. So when union officials say a labor agreement is needed to ensure a project will be built “safely, efficiently and cost-effectively,” they are making a claim so bereft of any semblance of facts or hard data that, to an objective audience, they lose all credibility.

This legislation is doubly disappointing because we are already working to improve job prospects in construction for city residents. Our organization has made a multi-million-dollar commitment to consolidate all of our training and administrative operations and move into Baltimore from Baltimore County to create the Construction Education Academy of Greater Baltimore (our grand opening will be later this spring).

We already train more than 2,500 construction professionals a year in everything from carpentry and electrical apprenticeship to safety and project management. We are betting that by having our own place, we can double those numbers and begin to make a real dent in the area’s shortages of skilled workers.

And we’re not exactly neophytes to the Baltimore; through Project JumpStart we’ve been training city residents in underserved communities for the past 14 years and have seen literally hundreds of our graduates go on to apprenticeship school and become licensed journeypersons. Many have moved up the ranks to superintendent and beyond.

This legislation threatens that entire enterprise.

By leaving the county for the city, we weren’t looking for a pat on the back, but we certainly didn’t expect a punch to the gut. We believe in Baltimore, its future and its people and can only hope that when the final votes are tallied, the same can be said for the City Council and all its members.

Mike Henderson (mhenderson@abcbaltimore.org) is president of Associated Builders and Contractors Greater Baltimore.