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Today I’d like to talk about a proposed federal rule dealing with construction contracts and my efforts to lead the 17 other governors who oppose this executive order.
Earlier this year, President Biden signed an executive order which requires Project Labor Agreements for federal construction projects. This action will require federal construction contracts of $35 million or more to have a government-mandated project labor agreement.
A project labor agreement is a collective bargaining agreement with labor unions to establish the terms and conditions of employment for a specific construction project.
When a project labor agreement is required by government agencies, this interferes with the current competition between union and non-union contractors. This executive order requirement will discriminate against local construction workers in favor of out-of-state union jobs for these federal contracts.
The federal government will decide who will work on a construction project and favors union over non-union construction companies. This is directly interfering with our workforce and the ability of Arkansas companies to receive these construction contracts.
A reduction in competition from some of the best union and non-union construction firms and workers in our state will exacerbate the construction industry’s skilled labor shortage. It will delay projects and increase construction costs by an estimated 12%-20% per project. These issues will result in fewer infrastructure improvements, less construction industry job creation, and higher costs to the taxpayers. All of which I oppose.
In 2021, Arkansas had one of the lowest rates of union membership in the nation at 3.9%, according to the Bureau of Labor Statistics. This proposed rule will put Arkansas at a disadvantage when utilizing our funding from the Infrastructure Investment and Jobs Act.
Labor unions have played an important role in our nation’s history. But I believe the government’s role in business is to provide an avenue for success and not a roadblock. This rule will create a playing field that isn’t level because it provides an advantage to unionized companies.
Onerous regulations and red tape raise the cost of doing business and suppress economic vitality. The proposed rule from the Biden administration will hamper our state’s ability to efficiently and fully utilize federal funding.
I’m honored to have the support of 17 fellow governors from all corners of our nation as we seek to oppose this rule and support fairness for our states.