Citi Global Wealth Investments chief economist Steven Wieting discusses the impact of the Fed's inflation strategy on the labor market and overall economy on 'Making Money.'
For months, experts have illuminated reasons why a lack of skilled workers, inflation and frustrating project delays are eroding the bonanza of federal taxpayer investments in U.S. infrastructure.
Now a new regulation currying favor with union donors to fulfill President Biden’s repeated promise to be America’s "most pro-union president ever" is expected to make all three problems even worse.
On Dec. 22, the Biden administration published a final rule that implements an executive order making federal construction contracts of $35 million or more subject to controversial project labor agreements.
Joe Biden has repeatedly promised to be America’s "most pro-union president ever." (Jim Watson/AFP via Getty Images / Getty Images)
PLAs are project-specific collective bargaining agreements that steer taxpayer-funded contracts to unionized contractors, granting union workers a virtual monopoly to build public works projects.
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This final rule is the latest in a series of anti-competitive and inflationary Biden administration policies pushing PLAs on hundreds of billions of dollars’ worth of federal and federally assisted construction projects – including roads, bridges, schools, transportation and other infrastructure procured by state and local governments – as well as clean energy projects and domestic manufacturing facilities built by private developers.
Together, these schemes artificially exacerbate the construction industry’s skilled labor shortage of more than half a million people, because PLAs require qualified contractors to replace all or most of their existing employees with workers from union hiring halls and follow inefficient union work rules. This creates excessive cost burdens as well as safety and quality risks for high-performing nonunion contractors.
Former U.S. Labor Secretary Eugene Scalia discusses the tentative deals in the actors' and UAW strikes and the impact of the union vote on 'Cavuto: Coast to Coast.'
Nonunion firms employ a historically high 88.3% of U.S. the construction industry – workers who freely choose to not join a union. Nonunion contractors have built more than half of the federal government’s large-scale construction projects since 2009 and are more likely to be owned by women and minorities.
Biden and PLA sycophants argue nonunion firms and workers are allowed to work on PLA projects – a claim that is technically true if contractors agree to the onerous terms of a PLA – but for the limited number of nonunion construction workers allowed to work on the jobsite, more than a third of their compensation is forfeited to union coffers and benefit plans unless they join a union, pay union fees and infuse cash into struggling multiemployer union pension plans.
PLA advocates know nonunion firms are unlikely to pursue PLA projects – why else would union lobbyists and their lawmaker cronies champion such special interest favoritism if not to help unions regain lost market share?
RedBalloon CEO Andrew Crapuchettes speaks to Fox News Digital about the stigma attached to blue or mixed-collar jobs.
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Not surprisingly, taxpayers lose with reduced competition and costly union requirements. Research has found that PLA mandates increase construction costs by 12% to 20%, which means voters can expect fewer improvements to transportation, utility, school, affordable housing, manufacturing and clean energy projects – and fewer jobs.
The Biden administration’s argument for bombarding taxpayers with extra costs through PLAs is full of holes. It claims that PLAs improve the quality of construction by employing skilled and highly paid union labor and preventing delays caused by strikes. But all federally assisted construction contracts already are subject to the Davis-Bacon Act of 1931 – a policy the Biden Labor Department’s recent and contested rulemaking overhauled to make it even more union-friendly – which requires contractors to pay government-set union-scale wages and benefits on most federal construction projects, with or without a PLA. Construction projects with PLAs have a mixed record of strikes, cost overruns and delays.
DISTILL CEO Neely Tamminga breaks down the November jobs report on 'Making Money.'
For these reasons, when given the option, federal agencies have mandated PLAs on only 12 of nearly 2,500 large-scale federal construction contracts since President Obama signed an executive order in 2009 to encourage the use of PLAs on federal projects on an optional basis.
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The Biden administration’s plan to eliminate competition from the majority of experienced local contractors and construction workers is sure to create procurement and construction delays. It is impossible for construction unions – who represent less than 12% of the U.S. construction industry workforce – to supply enough workers to build America’s substantial federal investment in infrastructure.
ABC and other organizations are prepared to file lawsuits against the illegal final rule and contracts subject to PLAs because Americans deserve long-lasting federal construction projects built safely, on time and on budget by the best contractors and workers, regardless of labor affiliation.
Former Trump Education Secretary Betsy DeVos joins 'The Big Money Show' to discuss the top challenges facing American students and the perceived political takeover by teachers unions.
Furthermore, a coalition of lawmakers and construction industry, small-business and taxpayer advocates are asking Congress to oppose costly handouts to special interests and sponsor the Fair and Open Competition Act, which would prohibit government-mandated PLAs on federal and federally assisted construction projects.
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The Biden administration could learn about the benefits of fair and open competition from the 25 states that have enacted similar laws restricting government-mandated PLAs on more than a trillion dollars’ worth of state and local taxpayer-funded construction projects since 2007.
All Americans would be best served by the adoption of inclusive, win-win policies that help provide a maximum return on federal investment in infrastructure instead of President Biden’s wasteful and discriminatory PLA policies.
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