Republican Governors Oppose Biden Order Granting Monopoly on Federal Construction Projects

Republican governors from 16 states joined to write Joe Biden on Tuesday expressing opposition to his recent executive order that requires project labor agreements (PLAs) on federal construction projects that exceed $35 million.

The Federalist reported that the GOP group that authored the letter is led by Govs. Bill Lee of Tennessee and Asa Hutchinson of Arkansas.

PLAs are collective bargaining labor agreements that are limited to specific projects and give federal infrastructure construction contracts to unionized contractors. Imposing PLAs compels contractors to sub out existing employees with unionized workers.

Biden signed the executive order in February at a ceremony held at a Maryland union hall.

The letter argues that PLAs disrupt existing collective bargaining agreements that were negotiated at arm’s length and reduce the incentive for nonunion contractors to bid on projects funded with federal taxpayer dollars.

The governors cite U.S. Bureau of Labor Statistics data to show nonunion contractors make up 87.4 percent of the American construction industry workforce. They argue that reducing competition from so many highly qualified firms leads to labor shortages, project delays, and increased costs. The upshot is there will not be as many infrastructure improvements while construction jobs go down and taxes go up.

A 2021 report from the Associated Builders and Contracts advocacy group indicated that the construction industry nationwide is dealing with a labor shortage of around 430,000 workers. The letter from the GOP governors argues the executive order will make the shortage worse and will lead to unnecessary delays.

They write the order will “undermine taxpayer investment in billions of dollars” of infrastructure projects created by the bipartisan infrastructure bill passed in 2021. The federal laws enacted by Congress for infrastructure spending since the onset of the COVID-19 pandemic do not include any requirements for PLAs on construction projects.

Studies have shown that PLA mandates directly result in fewer completed projects and spikes in construction costs. A study last year by a Saint Louis University professor indicated nonunion workers see wages and benefits go down by around 34 percent when PLAs are mandated. A 2019 Beacon Hill Institute for Public Policy Research study found that school construction projects in New Jersey that mandated PLAs cost around 16 percent more than similar projects without mandates for unionized labor.