Missouri Project-Labor Reform Law Takes Effect

Published July 21, 2017

Legal requirements mandating the terms and conditions of employment for private contractors doing construction work for the state or local governments in Missouri will be rolled back starting on August 28. Construction businesses will be allowed to choose whether they want to enter into project-labor agreements (PLAs) set by the government.

PLAs are effectively a form of collective bargaining deal, signed between the government and labor unions, establishing terms and conditions for public-works projects.

In May, Gov. Eric Greitens (R) signed Senate Bill 182 (SB 182), rolling back Missouri’s laws requiring contracting companies to agree to PLAs before beginning taxpayer-funded construction work.

Qui Bono?

PLAs supposedly protect taxpayers, but they really benefit labor unions, says Patrick Ishmael, director of government accountability at the Show-Me Institute.

“Project labor agreements outline who can work on a public project and under what conditions,” Ishmael said. “In practice, they are written to benefit unions and disadvantage nonunion shops, so much so that nonunion contractors often don’t even bother bidding on PLA projects. This harms taxpayers, as the final costs of PLA projects tend to be higher than those without a PLA.”

Rolling back the PLA rules will help governments use taxpayer money more efficiently and effectively, Ishmael says.

“If a local government has five projects it needs to build and institutes PLAs on the first four, there may not be enough money left over to complete the fifth,” Ishmael said. “Repeat those consequences over the course of years and decades, and the local consequences for inefficient use of taxpayer capital on these projects can be enormous.”

Increasing Competition, Cutting Costs

Jeremy Cady, director of the Missouri chapter of Americans for Prosperity, says ending PLAs will increase competition for contracting jobs by encouraging nonunionized businesses to compete for projects.

“Ending this practice will ensure a level playing field for all involved in the bidding process,” Cady said. “This will lead to more competitive bids and lower costs on public construction projects, saving taxpayer money.”

Cady says PLA reform is not about organized labor but about fairness.

“It’s a spending issue and a fairness issue,” Cady said. “SB 182 will force unions to compete with the private sector at market rates. PLAs essentially shielded unions from competition on public projects and excluded the entirety of the nonunion workforce. By ending PLA mandates at the city level, citizens will not only get a better product through more competition, but also spend less.”

When businesses have to compete on an equal footing, everyone wins, Cady says.  

“Everyone, including taxpayers, will benefit from the increased competition and lower prices,” Cady said. “Similarly, businesses who fell victim to government cronyism and were legislated out of the bidding process will now have an opportunity to grow their business.”