Labor Unions May Profit in the Wake of Hurricane Sandy

In the aftermath of Hurricane Sandy, huge construction projects will be necessary to repair the damage in New Jersey.  The federal government (through the Army Corps of Engineers) funds many of these projects.  A key issue regarding these projects is whether they will be “private labor agreements” (PLAs).  A PLA requires contractors to enter into collective bargaining agreements.  In other words, the bids for PLAs are open only to contractors using union labor.  A drawback of using only union labor is that labor costs are higher than they would otherwise be, and taxpayers foot the bill.

The Army Corps of Engineers recently requested public comments using a PLA for a New Jersey construction project.  However, the Obama administration made it clear in February 2009 that it encourages the use of union labor on construction projects.  Moreover, the New Jersey Legislature recently passed Senate Bill 2425 to expand the use of PLAs.  Republican Governor Chris Christie will undoubtedly face criticism from some corners if he fails to veto a bill that could be viewed as a forced transfer from taxpayers to unions.

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