After settling disagreements over controversial labor requirements in an offshore wind bill, the governor of Maine recently reversed course on the legislation, which she previously had vetoed. The bill aims to build a massive offshore wind farm in the Gulf of Maine by 2040, and it is expected to create thousands of new jobs in the state—jobs that labor leaders would very much like to unionize. With the governor’s about-face, they’re getting closer to that goal.
When state lawmakers first passed the legislation, initially known as L.D. 1847, Governor Janet Mills explained that she could not support the bill in a letter to lawmakers. She noted that the original proposal—which originated from her office—was amended on the Senate floor to include untenable union-friendly provisions. Specifically, Mills objected to requiring Project Labor Agreements (PLAs) for construction and fabrication projects the bill would require.
PLAs are collective bargaining agreements between unions and contractors that set the terms of an individual project, and they typically require anyone hired to belong to a union and be paid the so-called “prevailing wage,” which is tied to the union wage rate in specific occupations. As such, PLAs can drive up the cost of projects enormously, which the governor rightly thought would be bad for the state’s economy.
The governor had advised the legislature not to include the PLA requirements in the bill, saying, “I cannot support the addition of a PLA requirement to this bill…. I do not believe any of us want to see out-of-state workers being bussed up to coastal Maine to build our offshore wind port while Maine workers are sidelined, sitting at home.” Given that Maine’s union membership rate is 12.4%, Mills concluded that both unionized and non-unionized firms would be necessary to realize the state’s ambitious renewable energy plans. However, her stance reportedly infuriated union leaders, and pressure grew to find some kind of compromise.
After the initial veto, Mills and construction trade unions negotiated a new bill that drops the use of the term PLA but still requires a list of labor standards, including apprenticeship requirements and a ban on the use of independent contractors and temporary staffing agencies. More importantly, it would require that all work happen at rates set by collectively bargaining, i.e., the union rate. In other words, even non-unionized employers will be required to pay the union rate, and if they expand their workforce, they must hire from a union hiring hall. As one senator put it, the new bill “takes the nuts and bolts of what’s usually in a PLA and puts it into statute.”
Similar labor-friendly requirements, particularly prevailing wage requirements, were included in the dubiously-named Inflation Reduction Act (IRA). In implementing that law, the current administration also has included a litany of prevailing wage and union-friendly requirements for grants or tax benefits even though just 6.1% of the private sector nationwide belongs to a union. This raises the same question Maine’s governor recognized before giving in to organized labor’s demands: do we want more infrastructure, or do we want more unions?
The business community was leery of the IRA for many reasons, including concessions to organized labor, and for good reason. As the economy continues to face a labor shortage, such policies are counterproductive, to say the least, which Maine’s governor apparently realized at first. One hopes that federal policymakers won’t follow her unfortunate reversal in the future.
About the authors
Sean P. Redmond
Sean P. Redmond is Vice President, Labor Policy at the U.S. Chamber of Commerce.
