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Thursday, May 13, 2010

Kerry's New Cap and Trade Bill Screws Non-Union Labor and Construction Companies

FACILITATING COMPLIANCE.—The Secretary [of Labor] may require Federal contracting agencies, recipients of Federal assistance, and any other entity established in accordance with this Act to require contractors to enter into an agreement in a manner comparable with the standards set forth in sections 3 and 4 of Executive Order 13502 in order to achieve the purposes of this section, including any requirements established by subsection (c). Source: American Power Act Page 842-3
After sifting through the "lawyer-speak"  what the Executive Order 13502 part of the Kerry bill does, is empower the Secretaries of Labor and Energy to funnel federal contracts to unionized contractors. Or, to mandate the use of project labor agreements (PLAs) on federal and federally-assisted construction projects. This measure would choke off non-union companies from competing and resulting in an inefficient process that will raise the cost of projects, stymie the economy and lead to higher taxes.

PLAs are negotiated exclusively by construction unions and the person running the project but it binds the  contractors (and subcontractors) to labor unions. If contractors want to successfully bid and work on a PLA job, they must sign a letter of assent, which is a promise to follow the terms and conditions of a PLA.

PLAs require that unions will exclusive bargaining representative for workers during the life of the project. The decision to elect union representation is made by the employer – when agreeing to participate in a PLA project – rather than the employees.

The Union agreements require that the contractors follow local union work rules and job classifications define how employees are allowed to use materials and operate equipment for job tasks.  Union work rules prevent multiskilling, where workers possess a range of skills appropriate for more than one work process and trade jurisdiction and are used flexibly on a project. Instead, even non-union contractors need to observe traditional union job descriptions and work boundaries designed to ignore efficiency and put to work as many union members as possible.

A PLA mandates that non-union workers are required to pay non-refundable union dues and fees or join a union in order to work on a PLA project, whether they want to be part of a union or not. Some PLAs requires a non-union company to exclude their own employees from specific job sites and replace them with unfamiliar union workers.

Despite the fact that the vast majority of non union shops large enough to bid on these federal job have their own benefit plans, most PLAs require the contractors to pay their workers’ health and welfare benefits to union trust funds.

Thus, companies have to pay benefits twice: once to the union and once to the company plan. Of course the workers never see any of the benefit contributions sent to union accounts unless they decide to leave their present employer and remain with the union until vested.

By paying into these underfunded and mismanaged union pension plans even for a short period,  non-union contractors may be required to financially pick up the pieces when the plans go under, bankrupting the contractor or prohibit contractors from qualifying for construction bonds needed to build future projects.

There are so many reasons to dislike the bill Senator John "why the long face" Kerry introduced yesterday. In the end, this sell out to unions comes at the expense of non-union shops, labor and most importantly the American Public, forcing the higher costs that come with Project Labor Agreements (projections are around 20% higher) on the already overburdened federal budget.

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