Should NJ towns steer public projects to union labor? Parsippany latest to take up debate

The controversy over favoring certain labor unions in handing out public construction projects has made its way to Parsippany, where Morris County's most populous community is considering a so-called "project labor agreement."

Some New Jersey unions have advocated for PLAs since last year, when Gov. Phil Murphy signed a bill expanding the range of projects covered by the arrangements. Under that law, municipalities can now require that laborers be hired through designated union halls for highway and bridge construction, treatment plants and other initiatives with a price tag of $5 million or more.

Montclair and Toms River are among the New Jersey towns that have adopted project labor agreements. Parsippany, a town with 56,000 residents and a $122 million capital budget this year, is vying to be the latest, after the Township Council voted 4-1 last month to introduce a PLA ordinance.

A public discussion of the proposal is scheduled for Tuesday's council meeting, with a final vote expected Oct. 18.

Project labor agreements pro and con

Critics say PLAs limit a town's choices, drive up public expenses and shut out minority contractors less likely to have union connections. Advocates say they lower project costs, guarantee skilled labor and streamline the bidding process.

"We owe that to the residents, to make sure we have trained professionals do the job," Parsippany Councilman Paul Carifi Jr. said. "I don't want somebody that's hired off the street, not fully trained, to build something. And they would be documented workers. They pay taxes. They are not people here illegally that are hired by people and then paid through them."

In Parsippany, the proposed ordinance would require that 25% of the hired workforce come from within town, or from Morris County if the local workforce cannot fill that quota, in an effort to create local jobs.

Council President Michael dePierro, who voted for the proposal, recalled the trouble-plagued construction of the Waterview Marketplace in 2018. The private development along Route 46 was beset by mudslides and the partial collapse of a 20-foot brick retaining wall.

"That was built by non-union workers," dePierro said.

Councilman Justin Musella cast the lone vote against the ordinance.

"PLAs drive up costs on the taxpayer-funded projects due to artificially constricting the supply of labor," Musella said at the Sept. 20 meeting. He cited studies showing that "in New Jersey, enforcement of PLAs drove up the costs on public schools and, due to inefficiency, delayed their timelines by six to eight weeks."

PLAs have been used in New Jersey since 2002 for government-mandated public building projects that cost over $5 million. A 2019 analysis by the Beacon Hill Institute, a Massachusetts economic researcher, concluded that PLAs resulted in "significantly higher" costs for school construction in Ohio, Massachusetts and Connecticut, and higher final bids in New York.

In New Jersey, the Beacon Hill study found similar results, citing a state Department of Labor and Workforce Development report that found that 107 school-construction projects from 2002 to 2008 built under a PLA cost 31% more than projects not using the labor agreements.

It is unclear how many New Jersey towns have adopted the practice since Murphy signed the bill in May of last year. Montclair's ordinance includes a requirement that contractors employ "a substantial amount of apprentices, thus ensuring that these projects will expand access to living wages, careers in the construction trades for a new generation of workers."

Musella, the Parsippany councilman, said Toms River posts bid results, "and the results are always the same: PLAs drive up project labor costs far beyond what the free market produces in a non-PLA bid." The Toms River ordinance also requires 88% of hired workers to be "local."

"Mandating PLAs on all construction projects over $5 million sentences our taxpayers to overpaying for services that could be obtained more competitively, at a time when we’re all faced with higher energy costs, bigger grocery store bills and an overall turbulent economy," Musella said.

$5 million threshold

Ultimately, the reach of PLAs in local projects may be limited. Administrators in smaller towns, including Denville and Madison, noted that public construction projects rarely approach the $5 million threshold.

But project labor agreements have run into criticism for reasons beyond their alleged costs. The state Association of Builders and Contractors and the African American Chamber of Commerce of New Jersey both opposed last year's legislation, and local attempts to expand the practice, saying PLAs discriminate against minorities and limit the potential labor pool to the 17.8 % of New Jersey’s private construction workforce who are represented by a union.

John Harmon, the chamber CEO, said 98% of Black and Hispanic construction companies are non-union shops.

"A PLA greatly limits the opportunities for Black and Hispanic firms,” he wrote in a joint statement with the ABC in 2021.  “The possibility of Black and Hispanic labor is greatly suppressed. It is beyond disappointing when we see diversity clauses added to legislation that is fundamentally harmful to minority communities.”

PLA defenders in New Jersey point to language in the law that requires any PLA to ensure that government contracts are available to "minority group members, members of disadvantaged communities, and women." That could include "measures giving them priority in referral and placement from the hiring halls of signatory unions, programs to provide on-the-job or off-the-job outreach and training," and incentives for hiring and employment.

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But Harmon said that languagewas "only meant to perpetuate the Big Lie that PLAs in fact help, not hurt, minority communities and women, and lawmakers were certain this would secure support from those groups."

Kevin Barry, director of construction for the United Service Workers Union/IUJAT in Hackensack, wrote in a 2021 USA TODAY Network op-ed that "contrary to popular belief, PLAs don’t actually protect all members of organized labor, and they certainly don’t save the taxpayers’ money."

"They unfairly divide union groups into the haves — those certain hand-selected union groups who get the work — and the have-nots —  the union workers left adrift with zero opportunity," he wrote.

William Westhoven is a local reporter for DailyRecord.com. For unlimited access to the most important news from your local community, please subscribe or activate your digital account today.

Email: wwesthoven@dailyrecord.com 

Twitter: @wwesthoven

This article originally appeared on Morristown Daily Record: Parsippany NJ council debates project labor agreement for unions