Project Labor Agreement Studies: Understanding the Benefits and Drawbacks
Project labor agreements (PLAs) are a popular tool used in the construction industry to manage labor costs and ensure that projects are completed on time and within budget. PLAs are contracts between contractors and labor unions that set terms for the employment of workers on a construction project. These agreements typically cover issues such as wages, working conditions, benefits, and dispute resolution.
While PLAs can provide many benefits to construction projects, there are also drawbacks and concerns that need to be considered. In this article, we will take a closer look at some recent project labor agreement studies and explore the advantages and disadvantages of these agreements.
Recent Studies on Project Labor Agreements
Over the past several years, there have been a number of studies conducted on the effects of project labor agreements on construction projects. Many of these studies have focused on the impact of PLAs on cost, quality, and safety. Here are a few key findings from recent studies:
– A 2017 study by the National Bureau of Economic Research found that PLAs can reduce labor costs on large construction projects. The study found that PLAs led to a 13% reduction in labor costs on average.
– A 2018 report by the Beacon Hill Institute found that PLAs can increase the cost of construction projects by between 12% and 18%. The report found that PLAs tend to increase costs because they limit competition among contractors and increase administrative burdens.
– A 2019 study by the National Institute for Occupational Safety and Health found that PLAs can improve safety outcomes on construction projects. The study found that PLAs led to a 21% reduction in injury rates compared to non-PLA projects.
Benefits of Project Labor Agreements
Despite some concerns about the cost of PLAs, there are many benefits to using these agreements on construction projects. Here are a few of the most important benefits:
– Improved Labor Relations: One of the most important benefits of PLAs is that they help to build better relationships between contractors and labor unions. By establishing clear terms for employment and working conditions, PLAs can reduce conflict and help to ensure that projects are completed smoothly.
– Increased Labor Stability: PLAs can help to ensure that projects are staffed with skilled workers who have significant experience in the construction industry. This can lead to better quality work and fewer delays caused by labor disputes or worker turnover.
– Improved Safety Outcomes: As the 2019 study mentioned above found, PLAs can improve safety outcomes on construction projects. This is because they typically require workers to undergo extensive safety training and follow strict safety protocols.
Drawbacks of Project Labor Agreements
While there are many benefits to using PLAs on construction projects, there are also some drawbacks that need to be considered. Here are a few of the most significant drawbacks:
– Increased Costs: As the Beacon Hill Institute report found, PLAs can increase the cost of construction projects. This is because they limit competition and can require contractors to pay higher wages, benefits, and other costs.
– Reduced Flexibility: PLAs can limit the flexibility of contractors and their ability to make changes to staffing or project plans. This can be a disadvantage in situations where unexpected challenges arise or where project needs change.
– Labor Market Inefficiencies: PLAs can also limit the ability of contractors to hire workers from outside of the union labor pool. This can make it more difficult for contractors to find skilled workers in a tight labor market, which can lead to project delays and higher costs.
Conclusion
Project labor agreements can be a valuable tool for managing labor costs and ensuring that construction projects are completed safely and efficiently. However, they also come with some drawbacks and concerns that need to be carefully considered. As construction industry professionals continue to evaluate the impact of PLAs on their projects, it is important to weigh the pros and cons before deciding whether or not to use these agreements. By carefully considering the available data and consulting with labor unions and contractors, project owners can make informed decisions that benefit both their bottom line and the workers who build their projects.