Michael Theriault headshot

When in 2014 Supervisor Mark Farrell began to consider legislation establishing a Citywide project labor agreement (PLA) policy, he asked the City Controller's office for a risk-benefit analysis. The Controller's office produced a final draft of that analysis in March 2016. Although not widely disseminated, the analysis is a public document. We have a copy.

It recommends that the City not "require the use of a PLA. A citywide PLA policy could instead encourage departments to consider the use of a PLA when appropriate." It suggests a $20 million threshold for project coverage, far higher than the $1 million threshold currently in Farrell's proposal.

In so recommending and suggesting, the analysis at once acknowledges and undervalues the key advantage of public-sector PLAs in California: Greater assurance of correct payment of prevailing wages.

The analysis reports data from the City's Office of Labor Standards Enforcement (OLSE) that show about half a million dollars' underpayment of wages in City contracting annually. At the same time, the analysis admits that even so high a number is probably far lower than the fact:

"Due to staff capacity, OLSE is not able to conduct extensive job site inspections, which could reveal many more PWO violations. OLSE staff indicated that City staff, contractors and workers all have legitimate reasons to avoid reporting possible violations. City staff and contractors have an interest in keeping the project moving forward and mitigating potential delays or complications, and workers may fear losing their jobs if they report a violation."

Those of us in the Trades who have worked as organizers and so have spoken to many non-union workers know that correct payment of prevailing wages by their employers is uncommon. We can't quantify underpayment exactly, however, because like the OLSE we can't watch every hour of work by every individual on every job.

This is where public-sector PLAs are so effective. Under public contracting law non-union employers cannot be denied work just because they are non-union. PLAs, however, place our members side-by-side with the regular "core" employees of non-union employers. They also give us authority to place stewards with those employers. Hours can be better tracked. Non-union workers can talk to our members and convey what they are earning and learn what they should be earning. Cheating by employers is just plain much harder.

We would not be so adamant in obtaining public-sector PLAs were this not so. PLAs deprive us of the right to strike. This is not a right we surrender lightly. For this, PLAs remain controversial among us even now, after so many years of success.

Just as the extent of cheating on prevailing wage requirements is impossible to quantify exactly, so, too, are the benefits of ensuring their fulfillment. These benefits are no less real for that.

In contracting, they include the greater likelihood that responsible employers get the work. If a contractor will lowball bids and then underpay its workers, it will cheat elsewhere, and City inspectors and project managers are hardly more able than OLSE staff to catch every instance of cheating. By making it harder to lowball by underpaying workers PLAs improve the prospects of responsible contractors, and this results in a better product for the City.

For workers, the benefits of correct payment of prevailing wages are obvious. Their families are better fed, clothed, and housed. Their children have better educational opportunities and are better supplied for school. Workers have the possibility of saving, and the dangers of financial ruin that await so many working families just around the corner can be pushed blocks away.

As workers benefit, the City benefits. Its local hire requirements ensure that workers' greater spending capacity is used in greater degree at City businesses. Its social service systems – and those of the San Francisco Unified School District – are less burdened, because workers can better care for themselves and their families.

Almost none of these benefits would be increased by a PLA policy with a threshold for coverage of $20 million. Not to say that there won't be exceptions, but work above that amount in a market with San Francisco's union density is likely already to be union.

In the ideal, there would be no threshold for coverage at all, and all work would be covered under a PLA policy. The $1 million threshold to which we have agreed in Supervisor Farrell's proposal already represents a compromise. It is the threshold in our most recent PLA with the San Francisco Unified School District, in which hundreds of contracts have gone to small local contractors. It is a number common in comparable policies in other jurisdictions around the bay. It in fact exceeds the thresholds in several recent policies in California.

And it is in the range below $20 million dollars, with greater non-union contractor participation, that greater cheating on prevailing wage requirements would occur.

This is exactly where a Citywide PLA policy is most needed. The Board of Supervisors should ensure that it applies there by approving the policy with the $1 million threshold.

Organized Labor


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