Watch Live: The Washington Ideas Forum 2014

More love for Big Labor

Obama signs an executive order encouraging stimulus projects costing more than $25 million to use union-only project labor agreements.  This means that any contractor or subcontractor working on a large project will have to submit a bids with collective bargaining agreements spanning one or more unions for the duration of the project.  In theory, you could bid a job with non-union labor, but let a union run the bargaining.  In practice, projects with PLAs almost always go to union shops.

What does this mean for the stimulus?  Union labor is more expensive.  Every project that uses a PLA will cost more, and many of those jobs will use as much capital equipment as possible to minimize the demand for labor.  That means that we will get a lot less employment for every dollar of stimulus spent than we would without the PLA.

Obama is offering these "cheap" concessions to the unions because it's lookng less likely that the Democrats will be able to get EFCA through.  But these things aren't free.  They're just less transparent.

Presented by

Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

Things Not to Say to a Pregnant Woman

You don't have to tell her how big she is. You don't need to touch her belly.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

Things Not to Say to a Pregnant Woman

You don't have to tell her how big she is. You don't need to touch her belly.

Video

Maine's Underground Street Art

"Graffiti is the farthest thing from anarchy."

Video

The Joy of Running in a Beautiful Place

A love letter to California's Marin Headlands

Video

'I Didn't Even Know What I Was Going Through'

A 17-year-old describes his struggles with depression.

Video

Google Street View, Transformed Into a Tiny Planet

A 360-degree tour of our world, made entirely from Google's panoramas

Video

The Farmer Who Won't Quit

A filmmaker returns to his hometown to profile the patriarch of a family farm

Video

Riding Unicycles in a Cave

"If you fall down and break your leg, there's no way out."

Video

Carrot: A Pitch-Perfect Satire of Tech

"It's not just a vegetable. It's what a vegetable should be."

More in Business

Just In