Introduction and summary
The Biden administration’s signature industrial policies promise to create millions of jobs and support sustainable industrial growth throughout the 21st century.1 The Inflation Reduction Act, the Infrastructure Investment and Jobs Act (IIJA), and the CHIPS and Science Act are making investments in America’s physical, digital, water, and clean energy infrastructure.2 At the core of this growth strategy is the administration’s commitment that the new federally supported jobs will be good jobs for workers from all walks of life, with standards and incentives to achieve this goal written into the underlying legislation.
Now, states, cities, and private employers are beginning to compete for federal funds. Applicants that commit to clear, proven strategies for delivering on job quality and equity promises are at a competitive advantage.
This issue brief highlights four questions on job quality and access that all applicants competing for federal funds should be able to answer:
- How will the project support good jobs?
- How will the project expand equitable access and training for high-quality jobs?
- Will the project include labor and community stakeholders?
- How will the applicant demonstrate that they are living up to their commitments?
Federal agencies are releasing program guidance and funding notices that include multiple measures of job quality and equity in evaluation criteria. These include long-standing requirements—such as wage, benefit, and anti-discrimination protections—as well as adoption of new evaluation criteria. The latter requires applicants to demonstrate that they have built in workforce training, high-road contractual agreements, and partnerships necessary to improve access for historically marginalized workers and go further to support good jobs.
Many of the funds within the Biden administration’s investment agenda are delivered to states and localities through a formula model or as tax incentives that do not include all of these requirements. However, a significant portion of funding is delivered through discretionary funds that carry these enhanced review requirements. Even some nondiscretionary funds, such as the IIJA’s $42 billion Broadband Equity, Access, and Deployment Program (BEAD), include requirements and incentives to support high-quality jobs.3
Previously, the federal government rarely conducted in-depth reviews of job quality and workforce equity metrics. Now, however, funding agencies are building capacity by increasing staff with area expertise; establishing labor-focused offices and guidance; signing memoranda of understanding with the Department of Labor; and convening panels of outside labor, workforce training, and equity experts to review funding proposals.4 For example, the Department of Labor’s Good Jobs Initiative has compiled resources for funding applicants and awarding agencies on job quality metrics and evaluation,5 the Department of Transportation (DOT) has created a “Grant Application Checklist for a Strong Transportation Workforce and Labor Plan,”6 and the Department of Energy has provided detailed guidance on the community benefit plans required in many of its funding opportunities.7
Numerous cities, states, and private sector actors have long histories of upholding higher standards on infrastructure and economic development projects but have not previously been asked to commit to policies at the federal level that can push them to move even further. Other communities and private sector applicants will be unfamiliar with these strategies altogether.
Federal review of job quality and equity standards can make a difference in the lives of working people. Workers at Blue Bird, a federally subsidized electric school bus builder in rural Georgia, voted to unionize in May.8 With Georgia’s private-sector unionization rate hovering around just 3 percent, workers at the company faced an uphill battle in exercising their rights. Yet federal policymakers and worker advocates pressured the company to live up to its job quality commitments as a recipient of the IIJA’s Clean School Bus Program that provides funding for zero- and low-emission buses.9 In April, the U.S. Environmental Protection Agency released a new request for information from original equipment manufacturers participating in the program asking for more details on job quality and workforce development practices, including their approach to respecting workers’ free and fair choice to join a union and engage in collective bargaining.10
The Center for American Progress has previously profiled job quality levers that have a long track record of raising standards while supporting a stable and well-qualified workforce that is able to deliver high-quality work on time and within budget.11
How the Biden administration’s industrial strategy can be implemented to support job quality and workforce equity
While job quality and equity requirements vary by program, communities and companies applying for funds should have robust answers to the four questions discussed below.
1. How will the project support good jobs?
The Biden administration’s economic investments go further than ever before to ensure that recipients comply with multiple measures of job quality. Applicants should be prepared to demonstrate that investments will pay market wages; provide decent benefits; support workers’ ability to come together in unions without unfair and illegal interference; and ensure that workplaces are safe, free from discrimination, and provide equal access for workers from all walks of life.
Funds from the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the CHIPS and Science Act are typically covered by baseline job quality standards, including anti-discrimination protections and prevailing wage requirements for construction workers that mandate recipients pay prevailing local wages and benefits. Yet coverage under these laws does not necessarily guarantee compliance. In many funded sectors, wage theft is all too common, and women and workers of color are significantly underrepresented.12 Although numerous studies have found that recipients of federal funds are frequently among the worst violators of workplace laws, review of bidders’ records of compliance is typically cursory, and violators face few consequences.13
Applicants should acknowledge these long-standing shortcomings; commit to reviewing subcontractors’ records of compliance with baseline legal requirements that include wage, workplace safety, and labor laws; and, if applicable, submit evidence of their own compliance with workplace laws.
The U.S. Department of Commerce, for example, instructs state broadband authorities to consider a subgrantee’s commitment to fair labor practices:
Eligible Entities must give priority to projects based on a prospective subgrantee’s demonstrated record of and plans to be in compliance with Federal labor and employment laws. New entrants without a record of labor and employment law compliance must be permitted to mitigate this fact by making specific, forward-looking commitments to strong labor and employment standards and protections with respect to BEAD-funded projects.14
Discretionary spending programs also push applicants to move beyond minimum standards and long-standing requirements, particularly encouraging them to provide details regarding how the project will go beyond statutory minimums to raise standards and increase access to quality jobs. For example, the Department of Energy requires applicants across all programs funded by the IIJA and the Inflation Reduction Act to propose a community benefits plan to “attract, train, and retain a skilled and well-qualified workforce” to staff ongoing operations and production jobs. The agency clarifies that while a collective bargaining agreement may provide sufficient detail, applicants are otherwise prompted to:
[P]rovide sufficient detail on the number of people they anticipate hiring and quality of jobs to be created, which may include:
- Family-sustaining wages above the median for the region, with clear opportunities for wage progression alongside skill progression;
- Employer-sponsored health insurance and pension/retirement coverage options;
- Personal and family benefits, such as paid family and medical leave, parental leave, paid sick leave, other paid time off, and mental health support, etc.;
- Caregiving supports like flexible schedules, telework, childcare facilitation, and back-up childcare;
- Predictable scheduling; and
- Correct classification of workers as permanent employees and notification of rights of employees to all workers (including those classified as independent contractors)15
In other words, proposals must include sufficient details on existing labor market conditions and how the jobs created through the spending will meet or improve conditions for workers in that area. Promises to create good jobs without specific details on number of jobs created as well as wages, benefits, and other work conditions will likely be insufficient.
Winning models: DOE Battery Manufacturing and Recycling Grants
Last fall, the Department of Energy (DOE) awarded $2.8 billion in IIJA funds to support new and expanded battery manufacturing and recycling in the United States, releasing fact sheets with a short description of each product funded and its community benefits plan.16 While battery manufacturing holds the potential to create unionized, middle-class jobs in the auto sector, far too many new industry jobs are nonunion and pay wages below the private sector median.17
In a particularly strong example of supporting high-road practices, the agency awarded $115 million to Talon Nickel to support a battery minerals processing facility in Mercer County, North Dakota.18 The company signed a neutrality and workforce development agreement with the United Steelworkers union that will cover new jobs created at the facility and is entering into a project labor agreement that will establish wage and benefit standards and other terms of employment. In addition, as part of its community benefits plan, Talon included commitments to work with unions, local communities, and Tribal governments to ensure that the plan “contributes to the local economy.”
In addition, the DOE closed on a $2.5 billion loan to Ultium Cells, a joint venture of General Motors and LG Energy Solution, which will help finance the construction of new battery cell manufacturing facilities in Ohio, Tennessee, and Michigan.19 Workers at the venture’s existing Warren, Ohio, facility won a union election weeks earlier.20 The United Auto Workers union will support worker organizing at Ultium’s other planned facilities and is increasingly focused on securing neutrality agreements from battery manufacturers as industry workers seek to unionize.21 Similarly, Ford has announced that it will respect workers’ choice to unionize through a card check process at its planned Michigan battery plant.22 Auto manufacturers are ramping up domestic battery production capacity now to ensure that new electric vehicles are eligible for the Inflation Reduction Act’s full federal tax credit. Federal funds are instrumental in supporting domestic production for a new sector, yet ongoing oversight is also needed to ensure that new battery facilities create jobs that pay decent wages and respect workers’ right to bargain. Cities and states should work with the federal government to ensure that recipients of these funds are creating good jobs and providing workers a free and fair shot at joining a union and negotiating in good faith.
2. How will the project expand equitable access and training for high-quality jobs?
For too long, racism and sexism have sidelined talented women and people of color in many of the industries receiving new federal investments, limiting their access to good jobs and potential to earn income and contributing to economic inequality. Moreover, current economywide labor challenges and an aging construction and manufacturing workforce limit the ability of applicants to attract and retain a sufficiently skilled workforce.23 Applicants must include details on how they will expand training pipelines and grow access for workers from all walks of life, including disadvantaged and historically marginalized communities. Shifting the demographic makeup of these industries will boost equity in important sectors of the economy, grow the overall workforce, and help ensure that supported projects are completed on time.
Currently, more than 1 in 5 construction workers and 1 in 4 manufacturing workers are ages 55 or older.24 Moreover, men hold a disproportionate share of the jobs in these industries, Hispanic workers are significantly less likely to hold higher-paying jobs in these sectors, and Black or African American workers remain underrepresented across the construction industry.25
Federal agencies are encouraging applicants to adopt several strategies to increase and diversify the pool of workers entering key industries, including: expanding or creating new high-quality training programs in collaboration with the workforce development system, labor-management partnerships, higher education institutions, and others; supporting the hiring of local workers and providing these workers needed wraparound services; monitoring and reporting on outcomes; and adopting policies to create welcoming work environments.
Specifically, worker training programs are critical to ensuring that projects employ a highly skilled workforce that delivers high-quality infrastructure outcomes for communities. Training programs—such as registered apprenticeships and pre-apprenticeships and community college or workforce training programs—are also crucial to ensuring that workforce programs recruit underrepresented workers, as well as workers who are displaced from fossil fuel-intensive industries, and direct them toward good jobs.
For example, the Department of Transportation’s Grant Application Checklist prompts applicants to: 1) identify the skilled trade jobs needed on a project and expected gaps; 2) identify populations who are underrepresented in the infrastructure workforce; 3) undergo a workforce skills assessment and consider how training would complement or expand existing programs in the area; and 4) leverage funds outside the DOT grant:
Have you identified the number of skilled trade jobs needed by craft/position type and where you expect gaps? …
Have you identified existing programs that successfully train diverse populations and that can be scaled appropriately before project implementation? …
Have you identified populations that are underrepresented in the infrastructure workforce? …
Have you identified existing, successful training programs that have specific expertise in working with these underrepresented populations? …
Did you engage regularly with education and vocational training partners, state and local workforce development boards, unions, tradeswomen, and community groups trusted by the communities they serve to understand which training programs are effective and which populations are not being served by these programs?
Based on assessments of the current training landscape, have you identified any new training programs or program components … that would need to be created? …
Are you planning on leveraging formula and/or discretionary funds, outside of the grant being applied for, to support workforce development?26
In this way, federal applicants can expand worker access to high-quality training and necessary supportive services in order to help grow and sustain the workforce of the 21st century.
Winning model: Otay Mesa East Port of Entry
The DOT recently awarded $150 million in IIJA-supported INFRA grants to the Otay Mesa East Port of Entry project that will expand access for freight moving across the U.S.-Mexico border through San Diego County.27 As part of the project, the California Department of Transportation is implementing requirements to support robust use of apprenticeships, thereby allowing workers to learn a trade on a job site while earning wages, and goals for hiring “individuals from economically disadvantaged communities” and those with “significant barriers to employment.” It is also partnering with and providing financial support for a pre-apprenticeship program that targets workers from these backgrounds.
3. Will the project include labor and community stakeholders?
Worker and community organizations are essential partners in ensuring that new projects are properly executed. Unions help ensure that jobs pay decent wages and benefits; support safe work environments; provide high-quality training through paid, registered apprenticeships; and help evaluate job quality on proposed projects. Community groups will be instrumental in building connections and trust with workers from historically disadvantaged communities.
Historically disadvantaged communities can include communities of color; areas with high concentrations of poverty and segregation; and areas with limited economic opportunities and high vulnerability to displacement, high housing cost burdens, and populations subject to employment discrimination. These communities are often overburdened by the cumulative impacts of economic insecurity, systemic racism, high levels of pollution and exposure to climate change threats, and associated health risks.28 The federal government has developed the Climate and Economic Justice Screening Tool to identify historically disadvantaged communities and implement the Biden administration’s Justice40 Initiative. This effort aims to deliver at least 40 percent of new investment benefits to disadvantaged communities by flagging census tracts that are low income and overburdened by high levels of unemployment, pollution, and climate change impacts; high energy and housing costs; transportation barriers; and lead paint, among other things.29
Applications should include front-end commitments from community and labor stakeholders who understand the local labor market and have a long track record of upholding high standards.
Applicants should provide specific details on how community and labor partners helped develop the proposal and their commitments to providing ongoing guidance, training, and/or oversight. They can do so by including letters of commitment from labor and community groups and even the signature of the entities committed to adopting a project labor agreement or community workforce agreement—a legally binding pre-hire agreement that establish terms of employment and equitable workforce development practices.
For example, the Department of Commerce requires applicants for funding to support semiconductor commercial fabrication facilities “to consult, engage, and coordinate with workforce partners—including educational institutions, training providers, community-based organizations, labor unions, career and technical education organizations, and public-sector organizations—in formulating their workforce plan.”30
In addition, the agency specifies that, “Applicants must describe the constitution and layout of partnerships they have formed, as well as plans to utilize these partnerships on an ongoing basis, such as through regular convening. Applicants should also describe the roles and responsibilities each partner will take on as part of their plan.”31
And the Department of Labor has developed a project labor, community workforce, and community benefits agreement guide, as well as resources for potential bidders exploring the benefits of these sorts of agreements.32
By involving experienced worker and community groups on the front end, applicants can help guarantee that their workforce plans are both practical to implement and effective at reaching more workers.
Winning model: Rebuilding communities in Detroit
The U.S. Department of Transportation recently awarded $104.6 million to the I-375 project in Detroit, which will transform into a street-level boulevard a highway that contributed to the disappearance of a historically Black neighborhood. In the process of doing so, it will create access to about 25 to 31 acres of land.33 This project is driven by a community advisory committee made up of residents and community stakeholders, and has recently been selected to be part of the Department of Labor’s Office of Federal Contract Compliance Programs’ Mega Construction Project Program, which will provide proactive compliance support to ensure recruitment and retention of underrepresented workers.34
4. How will the applicant demonstrate that they are living up to their commitments?
Applications for discretionary funds should include transparency and accountability measures that will help ensure that projects live up to their workforce commitments. Ongoing reporting can help ensure that grant recipients correct problems during a project if necessary, create transparency for local communities, support evaluation against equity and quality goals, and influence future grant awards.
Applications for funds should enumerate specific recruitment goals and targets; commit to collection of workforce data in real time; and explain how the data will be used to course correct, including whether outside organizations will have a role in monitoring and how subcontractors will be held accountable.
For example, DOT’s Grant Application Checklist asks:
Do you have plans to publish aggregate workforce data, including information on demonstrating good faith efforts for recruiting women, people of color, and other underserved groups? Will the data be collected and reported frequently enough to permit course correction and allow for the deployment of new strategies as needed to ensure that employment opportunities are available to historically underserved workers in your project communities?35
Similarly, the Department of Commerce requires CHIPS Incentives awardees to “collect real-time, granular data that will inform the evaluation of their workforce efforts and to help track the success of their workforce commitments.” Minimum standards include:
- Metrics and plan to collect demographically disaggregated data on outreach, recruitment, hiring, education, and outcomes (including job placement and wages) of skills training programs and upskilling efforts.
- Disaggregated data on the demographics of the workforce, including breakdowns of work hours, wages, benefits, and other measures of job quality.
- How data will be collected so that it can be evaluated in real time and the means of accountability, such as any reporting to key stakeholders.36
In addition, applicants should specify policies for ensuring that subcontractors maintain compliance throughout the course of the project and monitor accountability measures for all potential funding recipients. For example, since project labor agreements and community workforce agreements are legally binding, labor and community signatories are empowered to take action when commitments are not being met.
Finally, some federal agencies require awardees to conduct interim assessments of adherence to commitments included in their funding proposals. Applicants should incorporate workforce goals into these inflection points along with opportunities for stakeholder input on progress. For example, the DOE’s Office of Energy Efficiency and Renewable Energy requires bidders for funding to establish go, no-go decision points in their “Statement of Project Objectives.” These are subject to review every 12 months to 18 months, with failure to reach objectives potentially resulting in redirection of work under the project, holds, or even discontinuance of federal funding awards.37 Inclusion of job quality and workforce objectives in this rubric will help applicants demonstrate their commitment to achieving workforce goals.
Winning models: Access and opportunity committees
A variety of projects have implemented access and opportunity committees (AOCs) that convene stakeholders to monitor progress on equity goals for construction projects. AOCs bring together labor, community, employer, government, and others to review reported, demographically disaggregated data on hours worked; identify contractors who are not meeting set goals; and make recommendations to ameliorate the status quo. The Department of Labor recently published a fact sheet on AOCs established in Massachusetts; Minneapolis; Cleveland; and Oakland, California, all of which were developed as part of a project labor agreement.38 While AOCs have been used primarily on construction projects, similar ongoing oversight mechanisms could help support access and job quality in federally supported manufacturing sectors.
When federal investments create private sector jobs, they should be good, middle-class jobs that are accessible to Americans from all walks of life. More than ever before, the Biden administration is evaluating applicants for federal funds based on these criteria, asking detailed questions about plans to raise standards and boost equity. By partnering with the federal government in achieving these goals, state, local, and private sector bidders will achieve a competitive advantage and ensure that today’s economic investments benefit all working families for generations to come.