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.

Why Is Google Making Human Skin?

Hidden away on Google’s campus, doctors at a world-class life sciences lab are trying to change the way people think about their health.

Join the Discussion

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

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Videos

Why Is Google Making Skin?

Hidden away on Google’s campus, doctors are changing the way people think about health.

Video

How to Build a Tornado

A Canadian inventor believes his tornado machine could solve the world's energy crisis.

Video

A New York City Minute, Frozen in Time

This short film takes you on a whirling tour of the Big Apple

Video

What Happened to the Milky Way?

Light pollution has taken away our ability to see the stars. Can we save the night sky?

Video

The Pentagon's $1.5 Trillion Mistake

The F-35 fighter jet was supposed to do everything. Instead, it can barely do anything.

More in Business

Just In