By Kevin Mooney
Union activity organized for the purpose of gaining jobs by way of subsidizing unionized contractors with funds deducted from union workers’ paychecks has hidden costs that undermine the free market system, according to a new study released by George Mason University’s John M. Olin Institute for Employment Practice and Policy.
Dr. Armand J. Thieblot, the author of the study, finds that from 2000 to 2007,unions in the construction industry spent more than $1 billion to engage in this practice commonly referred to as “job targeting.” Thieblot is also an adjunct professor of management at the George Washington University and a small business executive in Baltimore, Md.
The study raises questions about government policies that allow unions to engage in job targeting.
“Under current law, only unions are legally permitted to engage in the practice of market recovery/job targeting,” Thieblot observes in the study. “In other words, the law currently allows a union to pay money to a company for the purpose of putting another company out of business and taking jobs away from that other company’s workers. At the same time, if a construction company engaged in the same conduct as a labor union, the company would be prosecuted for violating the antitrust laws.”
The study also finds that job targeting is unnecessarily boosting the cost of public construction.
The wage rate required to be paid on the vast majority of public construction projects is known as the “prevailing wage.” In the majority of instances, the prevailing wage rates are the wage rates that unions claim their members are being paid, according to the study.
However, because of market recovery/job targeting programs, there can be a significant difference between what unions may claim an employer is paying and what is actually being paid, Thieblot points out.
