What possibly could be wrong with “green” plans for construction projects? And how better to serve the taxpayers than to insist that governments offer top wages to workers on their projects?
Maybe a lot, apparently.
Because when the interests of environmentalists and labor come together, it costs taxpayers money, workers jobs and a lot more, according to an activist who operates Labor Issues Solutions near Sacramento.
Kevin Dayton told WND that the key issue is “greenmail.”
That’s a play on the word “blackmail,” and he says he’s been monitoring its use since the 1990s.
Greenmail takes place, Dayton said, when construction trade unions, which generally are regarded as champions of job creation, use environmental regulations to delay or block construction projects, ironically, even clean energy projects in California.
Among the projects affected by the operations are natural gas-fired power plants.
Dayton believes that if the strategy proves effective in California, it will start appearing elsewhere.
The strategy works this way, analysts explain: An owner proposing a construction project is approached by the labor unions, who want to reach what’s called a Project Labor Agreement.
That’s a contractual process in which the owner and builder agree that union hiring halls are the exclusive providers of workers. Since 86 percent of construction workers are non-union, those companies rarely bid on PLA jobs. Fewer bidders often leads to higher costs for taxpayers.
Proponents of PLAs insist that union exclusivity is beneficial and that use of current policies and laws is an overall plus.
Nathan Fletcher, a former Republican assemblyman turned Democrat, says paying the prevailing wage “has the power to lower costs, provide greater value to taxpayers, ensure quality work and timely, well-built local infrastructure projects as well as generating more tax revenue for local governments and helping sustain a struggling middle class.”
“It is truly a win-win for taxpayers,” he said.
But because the state mandates so-called “green” procedures at times, there’s an open door for conflict.
Should a government not agree to organized labor’s request for union-only PLAs, environmental lawyers soon appear who allege that the proposed project will somehow damage the environment.
The result? A “voluntary” agreement for a PLA and the sudden withdrawal of the environmental concerns.
About 14 percent of construction workers are members of unions, according to the UCLA Center for Labor Research and Education, which is higher than the national level of about 6 percent.
So opponents of PLAs in California say they want to warn state residents and others of what they see as one more reason for California’s financial woes.
President Obama’s new Environmental Protection Agency director, Gina McCarthy, kicked off her tenure on July 30 with a speech blasting political opponents for even raising concerns.
“Can we stop talking about environmental regulations killing jobs, please? At least for today,” she said in her speech at Harvard Law School.
McCarthy emphasized her belief that environmental protection creates jobs.
But Dayton said the "primary goal of all unions is to force wage increases above market rates, because union scale is almost always higher than wages paid in the open market. Then they push to exclude non-union workers."
He said that construction unions force government wages to apply to every detail of work, including projects assembled offsite and workers commuting to the site. They even make subcontractors pay union scale to drivers delivering goods to the job site.
Then, he said, "they work to elect members to boards who will make construction projects the primary use of tax dollars – even unnecessary construction."
Dayton described how he sees the tactic used.
"If an elected body remains dedicated to allowing both union and non-union workers to have a chance to work, the unions get affiliated 'green' law firms to bring costly environmental lawsuit," he said.
He said that using California's extensive environmental regulations to force expensive, project-killing delays can make the most stalwart governing body crumble. He sees it as "legal extortion."
Dayton said he has researched the union tactics, including the "greenmail PLAs" more than anyone in California. He recently published an exhaustive list showing how California labor unions are actually slowing California's ability to bring more "green" solar photovoltaic power plants and solar thermal power plants on line.
But he says the union's use of the tactic does not stop there.
In 2012, 58 percent of San Diego voters supported an outright ban on city tax dollars going to PLAs. Despite that vote, recently uncovered secret email messages reveal that the outgoing mayor conducted a quintessential back room deal with labor unions to accomplish his dream of expanding San Diego's high profile convention center.
Unions agreed to drop environmental lawsuits if the private developer would privately agree to the "voluntary" use of a PLA. Of five bidding developers, only one agreed to the deal – the one who later was selected by the city, officials said.
An organization called Coalition for Fair Employment in Construction cried foul. It's lawsuit uncovered the emails and exposed the strategy. Legal processes will now determine whether the questionable deal can be undone.
In another case, Pasadena, home of the famous Rose Bowl Parade and football bowl game, cracked under the pressure for a PLA. The city badly needed a power plant and despite multiple studies consistently showing that project labor agreements add 15-20 percent more to construction projects, agreed to work with the restrictions.
According to Dayton, leaders might have had little choice.
"This is clearly extortion and they openly brag about it. This to them, is how you do business. You have a group of elected officials, often paid very little, who just want to fulfill their mission and get the best value for taxpayers. Then the union comes along and says you project is dead, or we will tie it up for years unless you agree to our demands. You have a duty. You want the job done. So you cave in," he said.
As Dayton sees it, the "standard PLA template pushed by construction unions forces all contractors to treat the union hiring halls as the temporary agency pulling most, if not all of the workers from union workers hiring halls."
"These workers often are hostile to the contractor's right to exist as a non-union contractor," he said. "The non-union contractor often has to tell his workers they are not welcome on the job. PLAs that do allow a contractor's non-union workers to work invariably require that the workers pay dues to the union and require the contractor to pay the union scale into the union pension and health funds in addition to any payments the contractor already pays into his own 401k and health plans. These double costs and tedious union work rules contribute to non-union contractors inflating their bids or not bidding at all."
In the San Diego Unified School District, voters authorized over $4 billion in construction. The new school board put a PLA on it, and leaders conducted a study of construction before the PLA and after. The average number of bidders on a project dropped from about 11 or 12 down to about six or seven.
And costs rose, although the study did not provide the figures.