SJ labor policies need to keep competition alive

Here’s a premise every San Jose City Council member is likely to agree on today: Contractors hired for public works projects such as paving city streets should be qualified to do the job, pay appropriate wages and treat employees fairly.

But when it comes to setting city rules to accomplish that goal, here’s the question that will divide the council today: Should the standard for fair pay and treatment of workers be equated with union affiliation?

It should not. Council members should frame the rules for their proposed Community Workforce Agreement and Project Labor Agreement policy so that nonunion companies that meet city qualifications still can compete in bidding on city work.

If the rules discourage nonunion but qualified bidders, reducing competition, the goal of fair compensation could clash with a different but equal goal of keeping faith with San Jose voters. They approved three new taxes last year so the city could restore public services and upgrade the streets, parks and other public facilities that have deteriorated over the past decade. Higher costs would mean that fewer of those recovery projects get done.

A small, focused CWA/ PLA task force of trade union, contractor and city representatives convened this year to try to reach agreement on a policy approach. They made progress, but significant details in this complex challenge remain in dispute.

The simplest is the cost threshold for projects that would need to comply with the new rules. Mayor Sam Liccardo has proposed $10 million and above — a relatively small portion of public works contracts to start, so the results can be studied. Council members more sympathetic or beholden to organized labor, or both, favor a lower $2 million threshold like Santa Clara County’s.

The other disputes are over more complicated details that could make bidding on city work a futile exercise for nonunion contractors.

For example, PLAs often limit nonunion contractors from using their own core employees on projects. Instead, they have to hire some or all workers from the building trades’ hiring hall.

Another rule could force contractors that provide benefits for their own employees to also pay into union trust funds for benefits — essentially paying double, with no benefit to their employees from the union fund.

The building and construction trade unions provide great educational and apprenticeship programs that have broad public value. Nobody would suggest placing them at a disadvantage in bidding. But government policies should provide a level playing field and encourage competition to get the most work done for taxpayers with the money on hand.

“It’s a shame that the divisiveness of our political climate keeps both sides in their corners on this issue.” Liccardo said last week. “There is ample room in the middle — to enable more apprenticeships for youth on public projects, for example — without imposing onerous requirements that scare away nonunion contractors, reduce bidding competition and escalate PLA costs on taxpayers.”

He’s right. But perhaps reason can prevail at today’s meeting. It’s likely to be a long one.