PLAs Increase Costs of Construction in CT

Project labor agreements (PLAs) increase the cost of construction. In a study of school construction projects in Connecticut, Beacon Hill Institute (BHI) compared the cost per square foot of union-only projects to projects that included both union and nonunion craftsmen. The result was a 17.9 percent increase in costs on union-only PLA projects.

To understand the cost differential, it is critical to understand that the construction industry is primarily nonunion. In Connecticut, unions represent less than 20 percent of the construction workforce. When 80% of the competition is eliminated at the time of bid, the project naturally will receive significantly fewer bidders. It is simple supply and demand – when supply of bidders is limited, the costs of the project increase.

Barry T. Hirsch and David A. Macpherson, "Union Membership and Coverage Database from the Current Population Survey,"

2013 CT Union Data Employment Union Members Percent
Total 1,534,400 206,600 13.5
Private 1,328,900 90,600 6.8
Public 205,000 115,900 56.4
Private Manufacturing 188,700 18,800 9.9
Private Constuction 68,500 10,700 15.6

It’s not just Connecticut craftsmen that are primarily nonunion -- so are the Connecticut firms that employ those workers and bid on public projects. In 2004, the state of Connecticut passed a contractor prequalification requirement mandating all firms that want to bid on public projects over $500,000 must be certified by the Department of Administrative Services (DAS). On the DAS website, as of March 2011, there were 754 firms that were prequalified to bid on public construction contracts exceeding $500,000. Of those, 425 (57%) were nonunion, 257 (34%) were signatory to at least one union, and 68 (9%) would not identify themselves one way or another.

No matter how you look at the numbers, a clear majority choose not to belong to a union. The bottom line is that PLAs eliminate the majority, driving up project costs by reducing the number of bidders.