Mt. Laurel, NJ – April 30, 2021: The Associated Builders and Contractors New Jersey Chapter (ABCNJ) and the African American Chamber of Commerce of New Jersey (AACCNJ) issued a joint statement today criticizing Governor Phil Murphy for signing Bill S-3414/A-5378 which requires government-mandated Project Labor Agreements (PLA) to apply to any public works contract exceeding $5 million.
By definition, PLAs are “project-specific collective bargaining agreements” almost exclusively found in the construction industry. These agreements require contractors to recognize unions as the representatives of their employees on a given project exceeding $5 million, making it almost impossible for merit shop contractors to bid on many taxpayer-funded construction projects. In fact, according to the most recent data released by the U.S. Bureau of Labor Statistics, in 2019 only 17.8 % of New Jersey’s private construction workforce was represented by a union.
According to ABCNJ officials, the cost of PLAs is well documented. For example, an October 2010, New Jersey Department of Labor and Workforce Development report found PLAs on school construction projects in the state were 30% more expensive and had an average construction schedule duration of 100 weeks compared to 78 weeks for non-PLA projects. Additional studies in Connecticut, Massachusetts and New York also found PLA mandates increase the cost of construction between 12% and 18%, on average, compared to non-PLA projects. Likewise, a 2017 study by the Beacon Hill Institute, found that PLAs increased the base construction cost of building Ohio schools by 13%, or $23 per square foot.
“This legislation is an example of how government can hurt the people it purports to help, give unfair advantages to favored special interests, and squeezes the middle class,” said ABCNJ President Samantha DeAlmeida. “It will eliminate competition from the available pool of qualified merit shop contractors who simply want to compete on a level playing field, especially when bidding work in their own communities. The bottom line is this law is nothing more than a taxpayer subsidy to big labor.”
“This ill-conceived PLA legislation directs public project funding to politically-connected union firms at the expense of the more than 80% of New Jersey construction workers who have chosen not to join a union,” said AACCNJ President and CEO John E. Harmon, Sr., IOM. Furthermore, 98% of minority-owned construction-related businesses are non-union and will realize no benefits from this law. In fact, many have told me that it could double their costs by forcing them to contribute to pension funds, health care projects, and union dues of which their workers are not beneficiaries.” Moreover, this decision is devastating because there was ample room for compromise and it demonstrates an unwillingness to take a small step that could have had a transformational impact on Black, Hispanic, Women, Veteran, and small businesses in our state. It appears that the fact that Blacks receive only 1% of Public Contracts is inconsequential to the administration; notwithstanding the 94% percent of their vote to elect this administration. The irony is, the more things change, the more they remain the same in New Jersey. This would have been the perfect time for this administration to demonstrate their support for the national call for equity. As James Baldwin said: “I can’t believe what you say, because I see what you do.”
“Frankly, the Governor’s support for this legislation at this time is confusing, considering he conditionally vetoed this legislation in August of last year. The only change to the bill is the newly added diversity language that was nothing but a guise to shepherd this legislation across the finish line. Alternative ideas that would have actually protected and benefited minorities were offered by both ABC and AACCNJ in hopes of finding a fair compromise, but to no avail. Hardworking taxpayers in New Jersey deserve more efficient and effective policies that will encourage all qualified contractors and their skilled workforce to compete for the opportunity to build long-lasting, quality projects at the best price. Respectfully, this law does just the opposite,” DeAlmeida concluded.
About Associated Builders and Contractors: ABC is a national association representing 21,000 merit shop construction and construction-related firms in 69 Chapters across the United States. Our membership represents all specialties within the U.S. construction industry and is comprised primarily of firms that perform work in the industrial and commercial sectors of the industry. ABC NJ is the industry’s liaison to federal, state, and local governments and the public at large. For more information, please visit our website at www.abcnjc.org.
About the African American Chamber of Commerce of New Jersey: The African American Chamber of Commerce of New Jersey (AACCNJ) performs an essential role in the economic viability of New Jersey. While providing a platform for New Jersey’s African American business leaders, to speak with a collective voice, the AACCNJ advocates and promotes economic diversity fostering a climate of business growth through major initiatives centering on education and public policy. The Chamber serves as a proactive advocacy group with a 501(c) 3 tax exemption, which is shared by the National Black Chamber of Commerce. AACCNJ website – www.aaccnj.com.
