Since adopting a citywide project labor agreement (PLA) in April 2015, the City of Long Beach has undertaken 15 projects that meet the outlined criteria. Three projects have been completed, three are nearly complete, six are active and three are under review. Combined, the projects total more than $48 million of investment and 168,000 work hours to date, of which Long Beach residents performed one out of every five hours, according to Craig Beck, director of the Long Beach Public Works Department.
Under the PLA, all construction projects over $500,000 require 40% of workers to be hired locally and 10% of all hired workers to qualify as disadvantaged or veterans. There has been some dispute as to the generality of what constitutes a “local” worker, with some labor advocates claiming they were promised Long Beach jobs, not regional jobs.
Rainbow Bridge, a pedestrian walkway along Seaside Way connecting the Terrace Theater path to Pine Avenue, is one of the first 15 projects to fall under the citywide project labor agreement. The bridge created 38,267 hours of work, with 13% performed by Long Beach workers and 25% performed by Gateway Cities workers, according to the Long Beach Public Works Department. Construction is nearly complete on the 605-foot long, $11 million project. (Photograph by the Business Journal’s Larry Duncan)
One of the great dividing lines on the topic of the city’s PLA is the requirement for nonunion contractors to hire one worker from the union hall for each nonunion employee on the job, which is harmful to smaller contractors, according to David Beegle, vice president of operations for Builders Daily Solutions Inc.
“Think of half your workforce being new and you have to complete your task in the same amount of time as if you had your normal crew – built-in inefficiency!” Beegle said in a letter to the Business Journal. “Additionally, people currently in the Union halls are there for a reason. There is an abundance of available work and those in the halls are not the ‘keepers.’”
Beegle argues that prevailing wage requirements and the Davis-Bacon Act, which states contractors and subcontractors must pay laborers and mechanics no less than the local prevailing wage and fringe benefits for public works projects, are more than sufficient and PLAs are not needed. He said unions simply found a way to ensure union work on all public projects.
Additionally, Beegle said the $500,000 cutoff might seem like a large number but that not much can be built for less nowadays. Also, he said the PLA is applied to the total cost of the project, which means a subcontractor that is picked up to do a $200,000 job on a larger project must also abide by the PLA and hire union workers, which is difficult for smaller companies and increases costs.
“Davis-Bacon was supposed to level the playing field for the Unions,” Beegle said. “PLAs have done nothing but given them the whole enchilada. Let’s leave some crumbs for the little guys.”
However, not all nonunion companies think PLAs are harmful. Mike Brascia, owner of Long Beach-based Brascia Builders, said PLAs keep the market fair and competitive for large-scale projects. He noted that they would not work for small commercial projects because clients would not be able to afford the boost in price that PLAs can incur.
As a nonunion company, Brascia said he offers his employees medical insurance and 401(k) plans, while many companies do not. He said he thinks these companies are taking advantage of their employees and are often the ones most vocally opposed to mandates such as PLAs.
“I like the labor agreement in keeping things fair and competitive when we’re working in certain markets. Usually, the ones that are totally against [PLAs] are the ones that the owner just wants to keep all that money for themself,” Brascia said. “I’m on the complete opposite end of the spectrum of that. I want to provide a great opportunity for the employee.”
Brascia did note that he can see both sides of the argument, as smaller businesses might have a difficult time keeping costs down when having to hire union workers from outside their company. He said this might cause them to never bid on these larger jobs, sticking only to those below the $500,000 mark.
Sean Hitchcock, president of 2H Construction, a nonunion general contractor based in Signal Hill, said PLAs are good for engaging the local workforce but also create more red tape and create hardships for smaller subcontractors. He explained that subcontractors with low employment numbers might have to keep full-time employees at home in order to abide by the 1-1 ratio with union workers.
“As contractors, we don’t only work in one city. We work in several cities in several counties, and we like to be able to keep our own workforce working first before hiring in local,” Hitchcock said. “[However], I don’t think it’s unfair, because everyone is on the same playing field. So I think that’s fine.”
PLAs are not necessary, according to Hitchcock, but he said he understands the benefits of them. Taxpayers in Long Beach would like to think large city projects, such as the new civic center, are providing work opportunities for residents and lowering the city’s unemployment rate, he said.
First District Councilmember Lena Gonzalez explained that a pre-apprenticeship program was created at Long Beach City College last year to build up the Long Beach trades workforce to fulfill PLA goals. Of the initial 250 that began with orientation, 180 went through the entire program and 37 went on to become employed with the local union.
“If you’re going to become a roofer or a tile layer or what have you, it takes a lot of math. And, unfortunately, what we learned from Long Beach City College . . . is the struggle and the challenge had a lot to do with the math curriculum,” Gonzalez said. “A lot of them were not passing math. I think geometry, if we haven’t taken it in decades, is going to be very difficult to pick back up.”
Gonzalez said Pacific Gateway has been working toward a more effective second round of the program by working to tear down those barriers. She said another class of 80 to 100 people will be held this year.
When asked if PLAs put nonunion businesses at a disadvantage, Gonzalez noted that Long Beach’s first PLA project was awarded to a nonunion company, as well as several other projects. She said that is the way of the free-flowing market, and the PLA is simply ensuring local jobs and better treatment of workers.
An added benefit of PLAs for Long Beach residents is surrounding cities and counties have included Long Beach as part of their PLAs, which means more jobs for locals, the disadvantaged and veterans, Gonzalez explained. She added that the citywide PLA is great for communities struggling through poverty, including many in her district, as well as Councilmember Dee Andrew’s 6th District.
On June 28, city staff released a report that showed hires from Long Beach and the Gateway Cities region performed 41% of the total number of work hours created by PLA jobs. Overall, 78% of work hours went to local hires, which includes Los Angeles County and parts of Orange County, and 14% of work hours went to residents who are disadvantaged or veterans.
The idea of local, disadvantaged and veteran hiring is very important to communities, according to Erik Miller, associate director of PVJOBS, a nonprofit organization that works to place veterans and the disadvantaged in career-track positions, including construction.
“We believe that providing employment is one of the foundational components of helping the at-risk community take the next step of breaking the cycle of poverty,” Miller said. “That’s why the whole job component is key to us.”
When asked if there is any truth behind claims that PLAs might block smaller companies from work, Miller said there is none whatsoever. He said the agreement just reinforces the belief that construction companies should take care of their employees.
Miller explained that unions create a certain amount of stability in regards to pay and pensions, as well as safety for construction workers, which is why PVJOBS supports unions 100%. Between this stability and assisting at-risk communities and veterans, Miller said PLAs are beneficial to all parties involved.
“I think that’s the way that everyone needs to focus their view on PLAs – understanding what their objectives are in principle. Once you understand that, then you can create the infrastructure needed to make them successful,” Miller said. “Unfortunately, that’s the component that has been missing in the City of Long Beach, as there are some infrastructural components that need to be in place to make ours work better.”