Saying it would make it all but impossible for construction companies owned by people of color to get government contracts, the African American Chamber of Commerce of New Jersey and the Associated Builders and Contractors of New Jersey said they are opposed to bill S3414/A5378, which is scheduled to be voted on this week.
The bill would revise the definition of “public work projects” to permit government-mandated Project Labor Agreements on additional categories of jobs.
Under the existing Project Labor Agreement Act, if a public works contract is for the construction, reconstruction, demolition or renovation of buildings over $5 million, it is subject to a government-mandated Project Labor Agreement. This bill would extend the PLA requirement to any public works contract exceeding $5 million.
According to the two groups, a Project Labor Agreement is between an owner of a specific construction project and applicable labor unions. It is an agreement that union rules must be followed throughout the course of the project, making it very difficult for nonunion contractors to participate. Union wages, union-level medical benefits, union dues and pension contributions must all be paid, even by a nonunion contractor, although that money will not be credited to the nonunion employees.
Typically, PLAs are only used on local, state and federal projects, as private corporations find them wasteful and too expensive. According to the U.S. Bureau of Labor Statistics, in 2019, only 17.8% of New Jersey’s private construction workforce is represented by a union.
John Harmon, the founder and CEO of the African American Chamber, said this change will shut out Black- and brown-owned businesses.
“98% of Black and Hispanic construction companies are nonunion shops,” he said. “Thus, a Project Labor Agreement greatly limits the opportunities for Black and Hispanic firms.
“The possibility of Black and Hispanic labor is greatly suppressed. It is beyond disappointing when we see diversity clauses added to legislation that is fundamentally harmful to minority communities. The diversity language within this bill is a guise of permissive language that has absolutely no benefit to the African American community within the state.”
Samantha DeAlmeida, second vice president and government affairs liaison for ABC-NJ, said the bill would hurt many.
“It is beyond disappointing that our legislators continue to support this exclusionary legislation that shuts out 80% of the construction workforce in New Jersey, many of which are minority- and female-owned businesses,” she said.
“The Project Labor Agreement Act mandated the creation of a yearly report analyzing the effectiveness of Project Labor Agreements and a comparison of the performance of public works projects with PLAs to those public works projects without PLAs. New Jersey has been noncompliant for 13 years, only having followed their law once.”
