A new study suggests that project labor agreements (PLAs) can help control construction costs, lead to greater competition among contractors, and help meet goals for using apprentices and women and minority workers.
PLAs are pre-hire agreements between unions and construction project owners. They set terms and conditions of employment for construction workers on a project. Unions that sign PLAs typically commit to supply labor for the project, and agree not to strike or picket. PLAs are used in both private sector and public sector construction.
But public-sector PLAs have been politically controversial in recent decades. PLAs are often supported by Democratic office-holders and by construction unions, who say they promote labor harmony, ensure a stable workforce, and result in timely and cost-effective project completion. But Republican office-holders and non-union contractors often oppose PLAs, saying they inflate project costs, limit competition by favoring unionized contractors, and discriminate against non-union workers and contractors.
The divide has led to back-and-forth executive orders by presidential administrations. A 2001 executive order by George W. Bush prohibited the use of PLAs on federal construction projects. Barack Obama overturned that order and allowed PLAs on a case-by-case basis. Donald Trump then reinstated the prohibition on PLAs. And Joe Biden first revoked Trump’s ban on PLAs in 2021, and then went further in 2022, issuing an order that outright requires PLAs on federal construction projects larger than $35 million. This January, the trade group Associated General Contractors filed suit in federal court in Louisiana to block that latest order.
To see how PLAs affect cost, competition, and workforce opportunity, a pair of researchers studied 95 construction projects at the Port of Seattle between 2016 and 2023. The study authors were Frank Manzo of the Illinois Economic Policy Institute and labor studies professor Robert Bruno of the University of Illinois at Urbana-Champaign School of Labor and Employment Relations.
The Port of Seattle oversees the Seattle seaport and the Seattle–Tacoma International Airport. Of the analyzed projects, 23 were covered by PLAs and 72 were not. Researchers found that there were as many or more bids on PLA projects than on non-PLA projects, and that PLAs had no impact on overall construction costs. But they also found that PLA projects had smaller disparities between the winning bid amount and highest bidder, were more likely to be awarded below their engineer’s estimates, and resulted in greater utilization of apprentices, women, and people of color.
Because Port of Seattle policy favors PLAs on projects over $5 million, the study focused on projects between $2.5 million and $7.5 million — treating them as similarly sized comparables. The Port Commission also set apprenticeship utilization goals and set aspirational hiring goals for people of color and women on projects costing $1 million or more.
Manzo and Bruno found that 80% of the projects with PLAs met the Port’s goal that apprentices perform at least 15% of work hours, whereas only 57% of projects without PLAs met that goal. Project with PLAs also employed more women and minority apprentices than projects without.
Manzo and Bruno published their findings May 7.
