Biden’s big union policies are a double-whammy to my small business
By Mario Burgos | Originally posted on foxnews.com
In 2009, at the height of the Great Recession, my family business pivoted to focus on federal construction opportunities made possible under the American Recovery and Reinvestment Act, signed into law by President Barack Obama. Our company, Burgos Group, became a vehicle for realizing the American Dream of two brothers who are first-generation Americans—our father emigrated from Ecuador and is now a U.S. citizen.
Under the Obama and Trump administrations, our company grew from two to 195 employees with a track record of completing over 100 sustainability, renovation and modernization projects for 13 different federal agencies from coast to coast. Our growth landed us on the Inc. 5000 Fastest Growing Private Companies list six years in a row—something achieved by only three percent of the companies on that list.
However, since President Biden came to office, our workforce has shrunk by 40 percent! Never in my life have I experienced the economic or regulatory challenges that I am facing right now.
Construction materials prices are up more than 36 percent since the start of COVID-19. Recently, we asked a supplier to rebid electrical transformers for a project and the price came back more than double what it had been the last time it was quoted. Even worse, there is a 105-107-week lead time, meaning a potential project delay of two years.
Additionally, construction business owners like me are facing a workforce shortage of over half a million workers nationwide.
Instead of removing barriers to winning work, the Biden administration advances anti-competitive policies that shut the door to opportunities for businesses like mine to participate in the largest investment in infrastructure this country has ever seen. President Biden’s policies are a double-whammy to my community. They will raise the costs of the projects, which means more money on fewer projects, to the detriment of our neighborhoods.
New Mexico is a minority-majority state comprised predominantly of minority-owned small businesses, particularly in the construction industry. 90 percent of construction workers in New Mexico choose not to belong to a union. So, when President Biden mandates project labor agreements on federal construction projects over $35 million in New Mexico via Executive Order 14063, they are steering contracts and jobs away from the New Mexico construction community to large, out-of-state unionized contractors from Los Angeles, Chicago and New York.
The union leaders who will profit from anti-competitive PLA defend the policy by saying it is only for large projects over $35 million. What they conveniently leave out is the fact that all federal projects that go to large businesses require small business subcontractors. Merit shop small businesses like mine will be forced to either watch the work go to out-of-state firms from big city, union hot spots, or will have to tell the majority of their workers they cannot work on the contract because President Biden has mandated that we hire from union halls.
Worse, cities like Albuquerque are following the administration’s lead in an even more punitive manner. When the Biden administration created new policies pushing PLAs on hundreds of billions of dollars of federally assisted projects procured by state and local governments, the mayor of Albuquerque vetoed the City Council rejection of a PLA mandate and put it place for every city project at less than one third of that the federal threshold—$10 million—in an attempt to curry favor with the administration and win more federal agency infrastructure grant money.
Forced PLA agreements keep small businesses small and move the American Dream further from the grasp of minority communities.
Under a mandatory PLA policy, our company would not have had the same opportunity for growth. Instead of hiring employees, finding work and growth opportunities for them from one project to the next, our company would have been forced to shift the work from our employees to labor from union halls for the length of the project. When the project is done, those union workers will go back to the hall to work for other contractors, and our small business will no longer have a base of existing employees with which to build and grow our business. In the unlikely event a PLA allows a small number of my existing nonunion employees to work on a PLA project, they would have to pay as much as 34 percent of their paychecks in union dues and union benefits and lose all contributions unless they join a union and become vested in those plans.
In addition, research has found PLA mandates increase the cost of construction 12 percent to 20 percent. In short, PLAs are a lose-lose for taxpayers, the vast majority of America’s construction workforce and quality small businesses like mine. Despite having a strong track record as a federal contractor that has resulted in awards from the Small Business Administration, Burgos Group will not bid on projects with PLAs in place. This means one less qualified and proven minority-owned small business competing for work.
The Biden administration is giving big city unions exactly what they want, and my community is suffering.