ABC’s National Craft Championships to be Held March 16

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Originally posted on contractormag.com

NCC highlights the career opportunities that construction can provide.

More than 175 of the nation’s best carpenters, electricians, pipefitters, plumbers, welders and other construction craft professionals are set to compete in San Antonio on March 16 in Associated Builders and Contractors’ 33rd annual National Craft Championships.

ABC’s NCC recognizes the men and women who are building America and highlights the career opportunities that construction can provide, whether it is a graduating high school student seeking an alternative to college, a veteran exploring their next chapter after completing military service or an individual rejoining the workforce or seeking a career change.

WHAT: 2022 National Craft Championships, a craft competition that takes place during ABC Convention 2022

WHO:   More than 175 top-performing craft professionals from across the country

WHEN: Wednesday, March 16, 12-3 p.m. CT

WHERE:  Henry B. Gonzalez Convention Center, 900 E. Market St., San Antonio, Texas 78205

WHY:    Craft students and apprentices travel from across the country to demonstrate their superior skills, education and safe work practices and compete for top honors in their chosen craft. The NCC features craft professionals vying for top honors in 15 competitions representing 12 crafts, including a team competition with four journey-level craft professionals per team working to complete a joint project. Competitors first take an intense, two-hour written exam and then compete in a daylong practical performance test. Video highlights from the 2019 NCC competitions can be seen here: www.youtube.com/watch?v=5a9E1eAx-Ok and images from the annual competition can be seen here: www.flickr.com/photos/abcnational/albums/72157708107642364.

ABC offers more than 800 education programs across 69 chapters to help train the next generation of construction workers. Its flexible, affordable craft and safety training leads to industry recognized, national credentials for today’s most sought-after construction positions. ABC is committed to showing the promising career path the industry provides, from apprenticeship to journey-level worker to business owner.

ABC: Construction Industry Faces Workforce Shortage of 650,000 in 2022

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Originally posted on constructionbusinessowner.com

The construction industry will need to attract nearly 650,000 additional workers on top of the normal pace of hiring in 2022 to meet the demand for labor, according to a model developed by Associated Builders and Contractors (ABC).

“ABC’s 2022 workforce shortage analysis sends a message loud and clear: The construction industry desperately needs qualified, skilled craft professionals to build America,” said Michael Bellaman, ABC president and CEO. “The Infrastructure Investment and Jobs Act passed in November and stimulus from COVID-19 relief will pump billions in new spending into our nation’s most critical infrastructure, and qualified craft professionals are essential to efficiently modernize roads, bridges, energy production and other projects across the country. More regulations and less worker freedom make it harder to fill these jobs.”

ABC’s proprietary model uses the historical relationship between inflation-adjusted construction spending growth, sourced from the U.S. Census Bureau’s Value of Construction Put in Place survey, and payroll construction employment, sourced from the U.S. Bureau of Labor Statistics, to convert anticipated increases in construction outlays into demand for construction labor at a rate of approximately 3,900 new jobs per billion dollars of additional construction spending. This increased demand is added to the current level of above-average job openings. Projected industry retirements, shifts to other industries and other forms of anticipated separation are also factored into the model.

Based on historical Census Bureau Job-to-Job flow data, an estimated 1.2 million construction workers will leave their jobs to work in other industries in 2022. It is expected that this will be offset by an anticipated 1.3 million workers who will leave other industries to work in construction.

“The workforce shortage is the most acute challenge facing the construction industry despite sluggish spending growth,” said ABC Chief Economist Anirban Basu. “After accounting for inflation, construction spending has likely fallen over the past 12 months. As outlays from the infrastructure bill increase, construction spending will expand, exacerbating the chasm between supply and demand for labor.

“An added concern is the decline in the number of construction workers ages 25-54, which fell 8% over the past decade. Meanwhile, the share of older workers exiting the workforce soared,” said Basu. “According to the Centers for Disease Control and Prevention, the industry’s average age of retirement is 61, and more than one in five construction workers are currently older than 55.

“The scarcity of qualified skilled workers is an even more pressing issue,” said Basu. “Since 2011, the number of entry-level construction laborers has increased 72.8%, while the number of total construction workers is up just 24.7%. For reference, the number of electricians was up 23.9% over that span while the number of carpenters actually declined 7.5%. The number of construction managers has increased by just 2.1%. More than 40% of construction workforce growth over the past decade is comprised of low-skilled construction laborers, who represent just 19% of the workforce.

“The roughly 650,000 workers needed must quickly acquire specialized skills,” said Basu. “With many industries outside of construction also competing for increasingly scarce labor, the industry must take drastic steps to ensure future workforce demands are met.”

In 2023, the industry will need to bring in nearly 590,000 new workers on top of normal hiring to meet industry demand, and that’s presuming that construction spending growth slows next year.

“Now is the time to consider a career in construction,” said Bellaman. “The vocation offers competitive wages and many opportunities to both begin and advance in an industry that builds the places where we work, play, worship, learn and heal. ABC member contractors use flexible, competency-based and market-driven education methodologies to build a construction workforce that is safe, skilled and productive. This all-of-the-above approach to workforce development has produced a network of ABC chapters and affiliates across the country that offer more than 800 apprenticeship, craft, safety and management education programs—including more than 300 registered apprenticeship programs across 20 different occupations—to build the people who build America.”

Click here to view ABC’s methodology in creating the workforce shortage model.

No Agreement On Project Labor Agreement Order

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By Tom Zind | Originally posted on ecmweb.com

Biden EO mandating PLAs on $35 million and up federal construction projects draws ire and applause.

Long controversial construction project labor agreements (PLAs) are back in the news with President Biden’s recent executive order requiring them on more federal projects, clashing with vigorous responses by construction industry interests.

The February 9 executive order targeting federal projects above $35 million was followed a week later by a formal letter of opposition and vow to fight it from groups including Associated Builders and Contractors (ABC) and Independent Electrical Contractors (IEC). Yet other groups applauded the move, including the National Electrical Contractors Association (NECA), which sent representatives to the signing.

Industry reaction

In a formal statement attributed to CEO David Long, NECA said expanding requirements for PLAs as government infrastructure spending ramps up will help increase the odds of better overall outcomes in these critical projects.

“This order prioritizes safety, value, quality, and on-time delivery of our federal projects, built with a highly skilled and trained workforce — all areas in which NECA contractors exceed their competitors,” the statement read. “This ensures American tax dollars are going toward federal construction projects that will be completed at the highest standard.”

Opponents balk at that assessment, saying the opposite is true — that PLAs are on balance demonstrably harmful, primarily because their bias favoring unionized labor limits competition and raises construction costs. They say PLAs, which generally establish the terms and conditions of employment for the project and require all contractors to adhere to them, effectively exclude millions of non-union contractors and workers.

In its formal statement, IEC says its merit shop members could be “prevented from partnering with the federal government to build back our nation’s infrastructure at a fair price to the American taxpayer,” and that the order would “exacerbate workforce shortages and limit opportunities for small contractors.”

In its response, ABC asserted that the expanded use of PLAs would have the effect of raising costs of upcoming federal infrastructure projects by 12-20% due to the exclusion of merit shop contractors and added costs associated with union-friendly contracts. Proponents of PLAs counter that the big picture shows agreements produce more evenly spread benefits that make them a net positive force in construction planning and execution.

The road ahead

With the order in place, opponents are now turning to the playbook for countering the administration. Since the order puts in motion a process of formalizing its particulars, they’re now looking for opportunities to blunt its impact. Ben Brubeck, ABC vice president of regulatory, labor, and state affairs says he’s heartened by indications that federal agency contracting officers privately express dismay over the order and have characterized it as “a terrible idea.” With ABC contractors having won about half of all federal contracts over $25 million in recent years, Brubeck says his members are nervous about the impact of what’s coming and are looking to ABC to aggressively counter the order, which the group recently posted a primer on.

“We’re going to wait to see what the proposed rule looks like, but all options are on the table,” he says. “We’ll look at litigation or legislative solutions and participating in the regulatory environment to push back on this.”

Jason Todd, IEC vice president of government affairs, says there is cause for some optimism.

“The final rules related to the executive order will likely dictate the direction IEC and others that oppose it can take to push back against it,” he says. “In the meantime, IEC continues to promote the Fair and Open Competition Act (FOCA) in Congress, which would prevent this order from ultimately taking effect. While IEC remains hopeful its members will have the opportunity to implement the infrastructure bill, it’s disappointed with the message the administration is sending to 87% of the construction industry, that it’s not welcome to partner with the federal government on these important projects.”

Project Labor Agreement flowchart

ABC Says Infrastructure Act Will Worsen Industry’s Labor Crunch

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By Pam McFarland | Originally posted on enr.com

Covid-19 has caused major disruptions in the construction workforce, and the expected infusion of funds from the Infrastructure Investment and Jobs Act (IIJA) will further pinch contractors’ ability to find enough workers to complete projects, according to the Associated Builders and Contractors.

According to a newly released model developed by ABC the industry will need to attract nearly 650,000 additional workers above its normal hiring pace in 2022 to meet the demand for labor.

“The workforce shortage is the most acute challenge facing the construction industry despite sluggish spending growth,” says Anirban Basu, ABC’s chief economist.

But spending is about to increase dramatically through the rollout of the infrastructure law, “exacerbating the chasm between supply and demand for labor,” Basu adds.

Potential impacts could include: project delays; increased costs for projects that will be passed on to clients, and, ultimately, consumers; and less “bang for the buck” on IIJA projects because projects will cost more, Basu says.

Project delays already are occurring. For example, on Feb. 15, a Taiwanese manufacturer announced that it would extend the completion date by six months for a new $12-billion chip fabrication plant in Phoenix, citing labor shortages as the primary cause.

An additional concern is the decline in the number of construction workers aged 25-54, which fell 8% over the past decade, Basu says.

At the same time, the number of people retiring and exiting the workforce has soared, with more than one in five construction workers nearing retirement age. Low-skilled construction laborers account for most of the growth in the construction workforce, ABC says.

Labor unions and contractors that work with union labor are also feeling the pain, says Kevin Tighe, vice president of labor relations and field service at the National Electrical Contractors Association (NECA), whose members are electrical contractors that hire International Brotherhood of Electrical Workers (IBEW) labor to staff their jobs.

Tighe says, “Manpower shortages are our biggest concern right now. There’s large projects coming where we’re struggling to figure out ways to [fully staff].”

Whether union-affiliated or not, contractors are all “competing for the same people,” Tighe says. As a result, he adds, “Everyone’s increasing their wages, everyone’s increasing the extras paid on jobs sites. There is a war for talent.”

In the short term, in  “hot spots” such as cities in Arizona and Texas experiencing severe shortages, NECA and IBEW are using social media, job fairs, hiring websites and other outreach methods to attract the talent needed to fill a growing list of large projects.

NECA and IBEW have created a workforce recruitment task force to take a longer view of the challenge.

NECA also has long worked with groups like Ready for Work to hire formerly incarcerated youth into pre-apprenticeship programs and has federal grants to team with such programs in about 20 cities across the U.S. “We are 100% committed to help knock the doors [to gainful employment] down,” Tighe says.

ABC has similar outreach programs and its own workforce development centers across the nation. ABC’s Baltimore Chapter recently established a workforce training academy in East Baltimore, an economically disadvantaged community, and has reached “a lot of people who otherwise might not be aware of the opportunities” presented by construction work, Basu says.

Construction associations ask Congress to support Fair and Open Competition Act

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WASHINGTON — Associated Builders and Contractors and a coalition of 19 associations and organizations representing the construction industry and business community sent a letter to Congress expressing support for the Fair and Open Competition Act (S. 403/H.R. 1284), sponsored by Sen. Todd Young, R-Ind., and Rep. Ted Budd, R-N.C, and strong opposition to government-mandated project labor agreements.

“Co-sponsoring the Fair and Open Competition Act is critical in light of President Biden’s Feb. 4, 2022, EO 14063, which requires PLAs on federal construction projects of $35 million or more,” the coalition wrote. “PLA mandates exacerbate the construction industry’s skilled labor shortage of 650,000 workers in 2022 by unfairly discouraging competition from quality nonunion contractors and their employees, who comprise 87.4% of the private U.S. construction industry workforce.”

The Biden administration is also “promoting PLAs on federally assisted projects procured by state and local governments competing for federal dollars authorized and funded through bipartisan legislation—like the Infrastructure Investments and Jobs Act of 2021 and other bills—that do not require or encourage the use of PLAs on taxpayer-funded construction projects,” the coalition wrote. “Your opposition to President Biden’s pro-PLA EO and any legislative and regulatory language promoting controversial government-mandated PLAs on spending bills, coupled with your support of the Fair and Open Competition Act, will create a level playing field in the procurement of government construction contracts, increase competition, help small businesses grow, decrease construction costs and spread the job-creating benefits of federal and federally funded contracts throughout the construction industry.

“PLA mandates are bad public policy because they increase construction costs by 12% to 20% because they effectively exclude the nearly nine out of 10 U.S. construction workers who choose not to join a union from building taxpayer-funded construction projects,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “These controversial agreements hold a third of employees’ compensation for ransom unless they join a union, pay union fees and prop up struggling union pension plans. PLAs also create excessive cost burdens and risks for high-performing nonunion contractors, which built more than half of the federal government’s large-scale construction projects from FY2009 to FY2021 and are more likely to be small, women- and/or minority-owned businesses.”

Tackling the Issue of Workforce Demand

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By Boyd Worsham, LEED AP | Originally posted on metalarchitecture.com

The industry needs to work together to build awareness of construction careers

Workforce fluctuations are true for any industry. The construction industry is no exception with its ever-changing disposition. With the occurrences of the last few years being unparalleled, this statement rings true even more so. The balance of the construction workforce demand is currently up in the air with both positive and negative trajectories.

According to the Associated General Contractors’ (AGC) data analysis, 31,000 jobs were created between October and November in all construction sectors in 2021. This is most likely due to the bounce back from the declines that were caused by the pandemic as well as progression on upcoming federal infrastructure investments.

Another key to combatting and preventing further workforce imbalances in 2022 is to minimize the outsourcing of work. If too much work is outsourced prematurely, it leaves less work for potential new entrants into our industry as well as decreases work for our current workforce.

If too much work is outsourced prematurely, it leaves less work for potential new entrants into our industry as well as decreases work for our current workforce.

Boyd Worsham, LEED AP, CEO and President of the National Center for Construction Education & Research

Additionally, the Associated Builders and Contractors (ABC) is experiencing similar findings in workforce data and trends. While growth is anticipated, there is also the possibility of stagnation. ABC reported that the unemployment rate in the construction industry rose to 4.7% in November 2021. On top of this, contractors are having difficulty hiring. Even though these problems don’t pair well, according to ABC chief economist Anirban Basu, “… the labor force participation rate rose to 61.8% from 61.6% …” which is heartening news.

It is important to be prepared to react to changing conditions of the industry, and to do so decisively. The inevitability of fluctuations in workforce demand should motivate all of us in this industry to tackle the issue head on. As an industry, it is vital that we create an awareness of construction industry careers and actively recruit talent for those careers. If we could focus on that at the contractor level and at the owner level, I truly believe we could solve this problem sooner rather than later.

As an industry, it is vital that we create an awareness of construction industry careers and actively recruit talent for those careers

Boyd Worsham, LEED AP, CEO and President of the National Center for Construction Education & Research

Recovering from the year 2020 is about focusing on the small victories. Speaking of which, the Construction Labor Market Analyzer (CLMA) shows that month-to-month growth rate of jobs in the industry is averaging from 0.6% to 0.8%. This is due, in part, to the 67.5% of jobs lost at the beginning of the pandemic being recovered.

The past few years have paved the way for workforce development to evolve and change the way construction professionals get to do what they love. More flexible benefits and working situations as well as an emphasis on mental health and attention to employee needs came to the surface as we have taken a step back and learned from the industry’s current state. It is important for us to continue to move forward and strive for excellence in the coming years and beyond.

State of the State 2022: Construction sector managing through supply chain, labor issues

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By George Jared | Originally posted on talkbusiness.net

The construction sector was in a precarious position as 2022 arrived. There are a robust number of commercial, residential and government related projects to be completed. Supply chain issues have stymied those efforts along with workforce shortages as COVID-19 continues. When inflation is added to the mix it makes for an unpredictable sector.

Newly appointed Nabholz CEO Jake Nabholz told Talk Business & Politics his construction company has a record number of back-logged projects. For the next year work crews will be busy clearing those books, but uncertainty remains, he said.

During the next year construction costs will rise by at least 11% and it could be more, he said. The management of costs and budgets will be a top priority as material prices fluctuate wildly in the coming months.

“The next 12 to 18 months we will be busy,” he said. “It’s what happens after that that makes me nervous.”

Halsey Thrasher Harpole Real Estate has several ongoing residential and retail construction projects in the Jonesboro area. HTH Managing Director Gary Harpole said he’s never experienced a market like this. Supply chain issues are impacting the market even more than inflation, Harpole said. It can take as long as 18 weeks to get windows, doors or appliances for new houses his company is building. Prices for those and other items are only locked in for a few days and then go up. These lag times eat into potential profits, he added.

“Supply chain issues are a very real problem on the construction side. It’s an interesting time to be in this business,” he said. “The demand is here. The interest rates are low … it’s been a learning curve.”

Nabholz said his company also is dealing with supply issues. Structural steel joists use to take weeks to get on a construction site now it can take months. It can take up to 12 weeks to just get a door frame and specialty doors can take as long as 20 weeks to acquire. There have been sharp upticks in the price and availability of steel, fire suppression materials and others.

“We’re being told it (supply chain issues) will last through the year. We’re being told it will level off during the first part of 2023,” he said.

Supply chain and inflation issues withstanding, the coming year looks to be a bright one for the construction sector and part of that will derive from the infrastructure deal that was passed through Congress. The construction outlook for 2022 is looking positive, but the industry will face challenges, said Anirban Basu, chief economist for Associated Builders and Contractors and CEO of consulting firm Sage Policy Group.

The impacts of the federal Infrastructure Investment and Jobs Act won’t be as immediate as the 2009 infrastructure package, which was focused more on shovel-ready projects to kickstart the economy, but Basu said he expects projects from the new infrastructure package to be released in the third and fourth quarters of 2022, according to Engineering News Record. Home prices are soaring and that will in turn lead to higher property taxes which will fill local government coffers, he said.

“So state and local government spending, even without [the infrastructure package], would have been a driver of construction activity,” Basu said. “But now infrastructure factors on top of those monies, so you should see a lot of state and local spending on construction going forward.”

Nabholz said his company is also anticipating what projects the infrastructure deal will bring. In addition to those anticipated projects, the demand for buildings used for manufacturing and warehouse space has been on the rise, he added. Solar energy projects are on the rise as well, he said. Office space and K-12 projects have been in steady decline since the pandemic started. Less people are working in offices. The number of students attending brick and mortar classes has been on a steady decline and that trend will continue into the near future, Nabholz said.

Another industry-wide problem has been skilled labor shortages. Those problems pre-dated the pandemic, he said. Due to the shortages, skilled workers wages will only continue to rise as needs intensify. Despite the unusual slate of problems, Nabholz said he’s confident about what the future holds in his industry.

“You always have issues you have to deal with. … We enjoy finishing these projects and helping our customers achieve their goals.”

Editor’s note: Link here to connect to the State of the State section.

Job Loss in January, But 91% of Jobs Back From Early Pandemic

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By ABC | Originally posted on constructionequipment.com

An ABC graph on construction jobs

The construction industry lost 5,000 jobs on net in January, according to an Associated Builders and Contractors (ABC) analysis of data released by the U.S. Bureau of Labor Statistics.

Overall, the industry has recovered slightly more than 1 million (91 percent) of the jobs lost during earlier stages of the pandemic.

Nonresidential construction employment declined by 9,000 positions on net, with all of those losses and more emerging from the heavy and civil engineering subsector, which lost 9,500 jobs. Nonresidential building and nonresidential specialty trade contractors registered minimal job growth, adding 400 and 100 jobs, respectively.

The construction unemployment rate increased to 7.1 percent in January. Unemployment across all industries rose slightly from 3.9 percent in December to 4.0 percent last month.

“There are at least a dozen explanations for today’s employment report, which indicates that nonresidential construction employment declined in January even as many other segments added many jobs,” said ABC chief economist Anirban Basu. “First, it is conceivable that many construction workers left for other industries, including those who work in union settings, since pay increases are limited by pre-existing labor contracts. Second, it is possible that the omicron variant, which was peaking during the survey’s reference week, kept some workers off of payrolls. That explanation seems debatable, given rapid job growth economywide.

“Third, since much of the construction job loss was in infrastructure-oriented segments, it may be that some purchasers of public construction services have shifted into planning and engineering mode to figure out how incoming infrastructure dollars can and should be spent,” said Basu. “Finally, it may also be the case that rapid cost increases during the pandemic have led more project owners, both public and private, to postpone projects.

“Whatever the explanation, the overall employment report has some important implications for contractors,” said Basu. “Based on ABC’s Construction Confidence Index, contractors collectively expect that sales, employment and margins will grow over the next several months. Today’s strong jobs report for the broader economy bodes well for more aggressive interest rate hikes, which will result in a higher cost of capital that is likely to dampen the demand for construction services.”

State Construction Unemployment Is Down in Every State From a Year Ago

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Originally posted on metalconstructionnews.com

The not seasonally adjusted national construction unemployment rate plunged 4.6% in December 2021 from a year ago, down from 9.6% to 5%, while all 50 states had lower unemployment rates over the same period, according to a state-by-state analysis of U.S. Bureau of Labor Statistics data released today by Associated Builders and Contractors. This substantial improvement occurred even as the omicron COVID-19 variant was sweeping the nation.

While not fully recovered to its pre-pandemic level, national NSA construction employment was 163,000 higher than in December 2020. Seasonally adjusted construction employment was only 96,000, or 1.3%, below its February 2020 peak, before the impact of the COVID-19 pandemic began to affect the employment numbers. This beat national seasonally adjusted nonfarm payroll employment, which, though improving, was still 2.2% below its February 2020 peak as of December 2021.

The national NSA construction unemployment rate of 5% was unchanged in December 2021 from its December 2019 reading. Over that same period, 34 states had lower construction unemployment rates, and 16 states had higher rates.

“The construction industry is making impressive progress despite continuing supply chain issues, which include extended delivery times and shortages of some building materials and appliances,” said Bernard M. Markstein, president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “Employers are also coping with difficulties finding skilled workers. The normal winter slowdown in construction activity is, at least temporarily, relieving some of the stress from these challenges.”

Recent Month-to-Month Fluctuations

National and state unemployment rates are best evaluated on a year-over-year basis because these industry-specific rates are not seasonally adjusted. However, due to the changing impact of the COVID-19 pandemic and related shifts in public policy, month-to-month comparisons offer a better understanding of the pandemic’s effect on construction employment in a rapidly changing economic environment.

Since the data series began in 2000, national NSA construction unemployment rates have always increased from November to December. December 2021 was no exception, with a 0.3% rise in the rate. Eleven states had lower estimated construction unemployment rates than in November, 33 states had higher rates and six had the same rate.

The Top Five States

The five states with the lowest December 2021 estimated NSA construction unemployment rates were:

1. Nebraska, 1.3%
2. Indiana and Utah (tie), 1.5%
4. Georgia, 1.6%
5. Oklahoma, 2%

All five states had their lowest December estimated NSA construction unemployment rate on record.

The Bottom Five States

The states with the highest December 2021 estimated NSA construction unemployment rates were:

46. New Jersey, 8.3%
47. Michigan, 8.6%
48. North Dakota, 9%
49. New York, 9.5%
50. Alaska, 10%

Alaska posted its lowest December estimated NSA construction unemployment rate on record.

Click here to view graphs of overall unemployment rates and construction unemployment rates showing the impact of the pandemic, including a graphing tool that creates a chart for multiple states.

To better understand the basis for calculating unemployment rates and what they measure, check out theBackground on State Construction Unemployment Rates.

Biden signs construction PLA executive order; associations push back in objection

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By Mark Buckshon | Originally posted on californiaconstructionnews.com

President Joe Biden on Feb. 3 signed an executive order requiring the use of project labor agreements (PLA)s on federal construction projects of $35 million or more.

The president and organized labor assert that the provision will help improve working conditions for nearly 200,000 construction workers on federal contracts. However, leaders of a some national construction associations say the pro-union order will increase costs, add to labor shortages, and unfairly bar many non-union contractors from worksites.

PLAs are collectively-bargained contracts between builders and labor organizations that establish terms and conditions for employment.

The White House says the order Biden will sign will streamline “coordination challenges” on large-scale projects, which will lead to projects being completed quicker, saving the government money. It also says the order will raise quality standards on federal projects by employing only highly-skilled and well-trained workers.

Biden signed the order just months after Congress passed a bipartisan infrastructure spending bill, providing $1 trillion in funding to repair roads and bridges, replace lead plumbing, expand high-speed wireless internet access and expand the U.S.’s network of electric vehicle charging stations.

However, representatives of the Associated General Contractors (AGC) of America and the Associated Builders and Contractors (ABC) expressed dismay about the PLA executive order.

“It is hard to explain why the President would choose to impose government mandated project labor agreements to solve a problem that doesn’t exist,” said AGC CEO Stephen E. Sandherr.

“Construction workers are among some of the highest paid workers in the economy, earning ten percent more than the average worker in the U.S. Their pay rates have continued to climb 5.1 percent as labor shortages have made this a workers’ market.

“Government-mandated project labor agreements undermine the collective bargaining process by imposing a separate agreement in a specific region that applies only to a limited number of construction firms and unions. These imposed PLAs undercut the benefits of the collective bargaining agreements that were negotiated in good faith between employers and labor union and will likely prompt many firms to think twice about participating in the bargaining process in the future.

“President Biden’s new policy will not help America ‘Build Back Better;’ instead, it will exacerbate the construction industry’s skilled workforce shortage, needlessly increase construction costs and reduce opportunities for local contractors and skilled tradespeople,” said Ben Brubeck, ABC vice-president of regulatory, labor and state affairs. “This anti-competitive and costly executive order rewards well-connected special interests at the expense of hardworking taxpayers and small businesses who benefit from fair and open competition on taxpayer-funded construction projects.

“Research has demonstrated that government-mandated PLAs increase construction costs by 12% to 20%, which results in fewer construction projects and improvements to roads, bridges, utilities, schools, affordable housing and clean energy projects—and the creation of fewer jobs,” said Brubeck. “PLAs steer contracts to unionized contractors and workers at the expense of the best-quality nonunion contractors and workers who want to compete fairly at a price best for taxpayers.

“PLA mandates are bad public policy because they effectively exclude the nearly 9 out of 10 U.S. construction workers who choose not to join a union from building taxpayer-funded construction projects,” said Brubeck. “These controversial agreements hold a third of employees’ compensation for ransom unless they join a union, pay union fees and prop up struggling union pension plans. PLAs also create excessive cost burdens and risks for high-performing nonunion contractors, which built more than half of the federal government’s large-scale construction projects during the past decade and are more likely to be small, women- and/or minority-owned businesses.

“Because 87.4% of the construction workforce does not belong to a union and the construction industry faced a skilled labor shortage of 430,000 people in 2021 alone, the Biden administration would be best served by promoting inclusive, win-win policies that welcome all of America’s construction industry to realize the potential of the recently passed Infrastructure Investment and Jobs Act to rebuild our nation’s crumbling infrastructure, increase accountability and competition and reduce waste and favoritism in the procurement of public works projects,” said Brubeck.

The Biden administration has also recently enacted new policies encouraging government-mandated PLAs on private, state and local government construction projects receiving federal funding through the U.S. Treasury, Transportation, Agriculture and Interior departments, which has resulted in pushback by GOP governors.