Project Labor Agreements deliver on policymakers’ promises to taxpayers and workers

With tariffs, market volatility, and mass government layoffs dominating headlines lately, much of our national economic discourse has centered around whether public policies and investments are maximizing value for taxpayers and opportunities for American workers.

Here in Illinois, tens of billions of dollars have been invested over recent years to repair and modernize the roads, bridges, buildings, parks, and critical infrastructure that we rely on. These investments offer a great opportunity to assess whether specific policies are delivering.

For example, Illinois — like previous administrations in D.C. — prioritized the use of project labor agreements, or PLAs, on our largest public investments.

PLAs are pre-hire agreements between the owners of infrastructure projects and workforce institutions, typically unions, that supply skilled tradespeople. PLAs ensure workers get paid market-competitive wages, coordinate workflow between different crafts, promote investment in apprenticeship training, and ban strikes and lockouts that can be costly and delay completion times. PLAs have a long history on complex projects in both the public and private sector, from casinos to data centers to NFL stadiums.

In one of his first acts, Gov. JB Pritzker issued an Executive Order requiring state agencies to include PLAs on a project-by-project basis. The Capital Development Board — which oversees the construction and rehabilitation of state buildings, colleges and universities, prisons, and similar projects — immediately complied.

New research from the Illinois Economic Policy Institute and the University of Illinois looked at the impact of PLAs to evaluate how they have delivered. With the largest-ever PLA dataset, the study analyzed more than 2,500 bids on nearly 800 Capital Development Board projects from 2017 through 2023, valued at $1.2 billion. About 500 projects were covered by PLAs and the rest were not.

The results were revealing. Project labor agreements were linked with a 14% increase in the number of bids submitted by contractors seeking to win contracts. That’s because PLAs encourage more responsible contractors to compete in the market, confident that they won’t be underbid by unscrupulous, out-of-state firms who may cut corners on safety, pay submarket wages to exploited immigrant workers, or engage in employee misclassification or other unlawful practices.

The data demonstrated that more competition drove down costs, with each additional bid improving the chances that projects came in under budget by 6%.

PLAs also made a mark on expanding opportunities for more local businesses. Higher shares of construction work are performed by firms owned by women, people of color, and military veterans when PLAs are attached. This really matters in an industry that struggles to attract and retain new pools of workers and contractors.

Here’s the point: Without PLAs, Illinois now would either have less competition and higher costs on many of its critical infrastructure projects or we would be relying on out-of-state companies and tradespeople to perform this work. Neither would be good for Illinois’ taxpayers, businesses, and working families.

And these agreements clearly support Illinois workers. One 2024 study found that PLA-covered projects had 5% more hours worked by apprentices, thereby expanding our domestic supply of workers learning new skills and training for in-demand careers.

The expansion of PLAs in Illinois offers an important contrast with neighboring states like Wisconsin and Iowa, which prohibit their use on public projects. States like Texas and Florida also have bans, resulting in less investment in career training for U.S. workers and more reliance on immigrants who often are undocumented, exploited, and paid under the table for much lower wages. This is where some taxpayer-funded federal projects may now be headed, after PLAs were removed from defense contracts.

Ultimately, real-world data shows that project labor agreements are de-risking mechanisms that encourage more competition and control construction costs, while boosting both the quality of construction jobs and access to in-demand careers for American workers. Indeed, PLAs are proving to be one example where both taxpayers and workers are getting the maximum value and opportunity that policymakers so often promise.

• Frank Manzo is an economist at the nonpartisan Illinois Economic Policy Institute