Hardhat Unions Have Not Dropped Savings Pact

by New York State AFL-CIO

NEW YORK, NY (03/21/2011)(readMedia)-- Contrary to published reports, cost-saving terms found in the Economic Recovery Project Labor Agreement, which has contributed to $10 billion of private construction in New York City advancing in the past two years, will remain available to projects in need due to the lingering fallout of the economic recession.

According to the Building and Construction Trades Council of Greater New York (BCTC), an organization consisting of local affiliates of 15 national and international unions representing 100,000 members in New York City, project labor agreements (PLAs) with these terms for four projects valued at $345 million are in the process of being executed by unions in the industry. PLAs with these terms for another two projects valued at $81 million are in the process of being drafted and approved, with more expected to follow.

Only the process by which PLAs with these terms are reviewed has changed, with the BCTC retaining exclusive control over this process and the Building Trades Employers Association (BTEA), which had previously participated in this process, no longer doing so.

In March 2009, a consultant jointly retained by the BCTC and the BTEA determined that these terms would generate labor cost savings of 16-21%. Labor costs typically account for half or less of total construction costs.

"Affiliated unions of the building and construction trades have met the challenge of independently verifying labor cost savings achieved through PLAs," said Gary LaBarbera, president of the BCTC. "It is unfortunate that management has not done the same."

In the two years since this consultant's report, there has not been any similar report or even effort to verify supposed cost savings attributable to actions taken by the BTEA and its member firms.

"The fact that 60 projects worth $10 billion have used the terms found in the Economic Recovery PLA should be evidence enough of its value," added Mr. LaBarbera. "Business would not go through the time and expense of requesting the use of an agreement – 60 times and counting -- that does not provide real value, and several developers and contractors have publicly and privately attested to the fact that their projects benefitted significantly from the terms found in this PLA.

"It is regrettable that the BTEA would attempt to misinform the general public and the real estate development community about the commitment of the BCTC to continue to use the terms found in the Economic Recovery PLA for projects in need solely because the BTEA, which has done nothing verifiable to contribute to cost savings, has been removed from the process.

"While the BTEA sends the wrong message on attracting business and jobs to New York City, the affiliated unions of the BCTC will continue to act to bring real efficiencies and cost savings to New York City's real estate development market," said Mr. LaBarbera.