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Labor Pact Helps the Few at the Expense of the Many

Our irascible labor leaders are at it again.

Having run the would-be developer of the $1 billion-plus convention center and hotel out of Chula Vista, union bosses now fix their sights on a $400 million project near San Diego’s fast-growing cruise terminal.

The bosses are threatening to derail the project until they get a labor agreement to cover the construction of two hotels , one 19 stories, another 14 stories , and subsequent labor force of hotel workers.

The hostelries are needed to keep pace with rising demand at the terminal on North Harbor Drive.

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The project would generate 400 construction jobs and 2,000 permanent jobs.

But the blue collar boys are already taking steps to derail the project if they don’t get their way.

Civic leaders, including Mayor Jerry Sanders and Chamber of Commerce Chief Executive Officer Ruben Barrales, say the threats amount to “greenmail.”

In Chula Vista, the union used similar tactics when Tennessee-based Gaylord Entertainment wanted to transform empty lots into a beehive of economic activity.


Growing Power

The growing power of organized labor in private industry (especially within the construction trades) mirrors the rise of labor in state, regional and local governments. The two sides of the same coin work hand in hand.

In fact, labor is so entrenched on both sides of the dais that it sets, or influences, the agenda for many decisions made by boards of supervisors and city councils, and other local elected boards.

The symbiotic ties between labor in the private sector and public agencies cost taxpayers plenty of dough.

Local lawmakers think they need the support of labor to run and stay in office, so they become beholden to the rank and file when voting on community-critical decisions.

To get along, you go along, to paraphrase a famous quip of a speaker of the U.S. House from the 1950s.

Elected officials who violate that piece of advice sometimes feel labor’s wrath when they vote on issues opposed by the rank and file. (Labor is not above supporting or even fielding a competing candidate when re-election time comes around, which instills fear into the heart of every incumbant.)

It was just such a desire to placate labor that plunged the city of San Diego into dire financial straits back in the 1990s and early 2000s.

Elected officials knew they could ill afford to vote increases in pay and benefits for municipal workers, but did so anyway, knowing that the taxes to fund such largesse wasn’t in the pipeline.

Labor pacts have become one of the tools used by unions in the private sector to maintain their power. But such agreements, heavily anti-competitive, are designed to ensure that select workers get more than their fair share of the work.

What’s more, the agreements spell out who can be hired, or more specifically who can’t be, for projects. In the agreement proposed for the Gaylord project, for example, contractors would be limited as to who they could hire for the work involved. The hiring pool would be limited to workers belonging to local unions.

Planning of the Gaylord project could have been well under way by now had it not been for the insistence on the part of San Diego Central Labor Council that all work be done under the aegis of a labor agreement.

Gaylord balked, and rightfully so. The developer did the right thing by walking away.


Game Is Over

The unions know that once a massive public works project gets under way without such a labor agreement the game is over.

Meanwhile, the Build the Bayfront Coalition says it will press the Chula Vista City Council on Jan. 15 to move ahead with an open competition and anti-discrimination ordinance to help re-start the Gaylord project, as well as set the stage for open competition in the construction of a new San Diego Chargers stadium.

The team’s owners have narrowed their search down to two sites within the city, ironically, one site near the proposed Gaylord project.

The experts estimate that a state-of-the-art stadium would cost $800 million, which could prove a boon for the South County economy.

That’s close to $2 billion that could be poured into the economy.

But the work must proceed without a labor pact. It’s a generous guaranteed-employment program for the few written at the expense of the many.


Tom York is editor of the Business Journal.

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