PATTERSON AND BROWN: Unions stack the deck against job creation

Gambling on jobs

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If you build it, jobs will come.

That’s what Marylanders are being promised in the push to build a new casino, the state’s sixth, in Prince George’s County. County Executive Rushern L. Baker III, for example, claims that “the expansion of gaming into Prince George’s County is about the thousands of new jobs, millions of dollars in revenue to the state and county, and growing the travel and tourism industry in Prince George’s County.”

There’s no doubt Maryland could use the jobs. State unemployment has been creeping inexorably upward, reaching 7 percent in July (up from 6.7 percent in May). The state lost 8,100 jobs in June alone, with the construction industry among the hardest hit. So it makes sense for those behind the drive for another casino to sell it as a jobs program for Marylanders.

The problem is that this isn’t the whole truth. The proposed casino really is a jobs program for unions.

The new casino likely would fall under a project labor agreement (PLA). PLAs stipulate that contracts for public construction are offered exclusively to unionized firms. As the National Right to Work Legal Defense Foundation explains on its website: “A project labor agreement requires all contractors, whether they are unionized or not, to subject themselves and their employees to unionization in order to work on a government-funded construction project. This is done by including a union collective bargaining agreement in a public construction project’s bid specifications. In order to receive a contract, a contractor must sign the agreement and subject its employees to union control.”

Unfortunately, as Pless B. Jones, a local construction company owner and president of the Maryland Minority Contractors Association, noted in an Aug. 7 commentary in the Baltimore Sun, “A sixth casino would create jobs, but for whom?” Of the 146,215 construction workers in Maryland, “only 11 percent have chosen to belong to a union.” The result: “Under a PLA, almost 90 percent of our construction work force would not be eligible” for the casino construction jobs.

It’s the same nationwide. According to the U.S. Department of Labor’s Bureau of Labor Statistics, just 15 percent of construction workers are either union members or covered by union contract. PLAs effectively shut out 85 percent of the badly bleeding construction industry.

By artificially limiting the effective labor pool available for construction projects, PLAs dampen the market competition that selects for efficiency and quality: If unions are guaranteed plum construction jobs, what incentive do they have to bring the job in at a reasonable cost and at high quality? The frequent result of PLAs, sadly, is inflated prices and shoddy work.

Take the Big Dig in Boston, for example. This $22 billion highway expansion project is known for missed deadlines and huge cost overruns, not to mention notoriously poor construction (a collapsed tunnel panel in 2006 crushed a woman to death). Union workers on the Big Dig were well-known for their laughable lassitude, including visits to methadone clinics and well-reported sleeping and drinking binges that led many to refer to the project as the “Big Swig.”

If Marylanders want to expand gambling in the state, fine. But every company, union and nonunion, should be able to bid for the jobs in open and fair competition. Hopefully, Maryland casinos won’t subject gamblers to the same odds that non-unionized workers face in finding a job: playing against a stacked deck.

Matt Patterson is a senior fellow at the Competitive Enterprise Institute. Crissy Brown is a research associate at CEI.

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