How Project Labor Agreements and Community Workforce Agreements Are Good for the Biden Administration’s Investment Agenda

The Biden administration has successfully passed its signature industrial investments with the Infrastructure Investment and Jobs Act (IIJA), the CHIPS and Science Act, and the Inflation Reduction Act—laws that promise to strengthen the economy for years to come, grow the middle class, and support millions of high-quality jobs for working Americans.¹ These laws invest billions of dollars in the country’s infrastructure, from rebuilding crumbling roads, bridges, and ports; to installing chargers and building battery factories to support the electric vehicle ecosystem; to reviving America’s leadership in semiconductor manufacturing. Already, public and private investments have dedicated billions of dollars in new funding,² and government investments and subsidies will continue over the coming years in the form of grants, loans, and tax incentives.

Now, federal agencies can help provide the public good value for these investments and deliver on the laws’ commitments to creating quality jobs accessible to Americans from all walks of life by encouraging more recipients of public funding to adopt project labor agreements (PLAs) and community workforce agreements (CWAs). Yet, PLAs and CWAs are underused across the government, and many awarding agencies, as well as officials at all levels of government, lack direct experience with these sorts of agreements.

PLAs and CWAs are powerful tools that help ensure federal investments are completed on time and on budget by well-qualified workers; support long-term labor stability; and advance the Biden administration’s goal of creating quality jobs available to workers historically excluded from construction. Long used in the public and private sectors, PLAs and CWAs are pre-hire collective bargaining agreements negotiated by project owners and workers that govern wages, benefits, and other work conditions. Project owners and workers alike benefit since the agreements support a consistent supply of high-quality labor and avoid costly work stoppages resulting from labor disputes while also offering workers enforceable baseline standards. Often, these agreements also include commitments to ensure the investment benefits the local economy and workforce,³ such as setting targets for hiring women and workers of color, supporting small businesses, or targeting hiring efforts to economically disadvantaged communities.⁴

To ensure government investments and subsidies deliver the most benefit to workers, President Joe Biden issued an executive order requiring PLAs on large-scale construction projects with federal contracts valued at more than $35 million,⁵ and agencies are encouraging their use on IIJA, CHIPS and Science Act, and Inflation Reduction Act projects.⁶ In order to bridge experience gaps among public officials, the U.S. Department of Labor⁷ and awarding agencies such as the U.S. Department of Transportation⁸ (DOT) and the U.S. Department of Energy⁹ have been producing materials and trainings to educate federal staff and applicants, as well as engaging with state and local officials to offer technical assistance.¹⁰

This report seeks to further increase awareness of the mechanics and benefits of CWAs and PLAs among federal agency staff overseeing these investments, as well as policymakers and worker advocates. By expanding the use of PLAs and CWAs on new federal industrial investments, the implementing agencies can help ensure that these investments offer good, accessible jobs while building a new generation of skilled labor.

In particular, this report will help agency officials, as well as other policymakers and worker advocates, understand how these agreements can work for federal funding by:

• Explaining the mechanics of PLAs and CWAs and how their use improves outcomes on public investments
• Highlighting new Biden administration investments that commit to use PLAs or CWAs
• Detailing past successes with PLAs and CWAs in the public and private sectors

Major construction projects are complicated, with dozens of employers managing thousands of workers all completing work on different timelines. As a result, research has shown that disruptions to work can significantly hamper productivity on a project, potentially leading to delays and cost overruns.¹¹ Labor unrest can be a major cause of work disruptions. In 2022, for example, construction workers were on strike for a cumulative total of 38,560 days nationwide.¹²

Project labor agreements and community workforce agreements can help to address this issue. As legally binding, pre-hire contracts negotiated between workers and the entity responsible for managing a project, PLAs and CWAs harmonize much of this complexity with uniform standards and mechanisms to resolve disputes without resorting to lockouts or strikes, preventing work from being interrupted. These agreements have similar essential provisions: compensation rates; clearly defined working hours; dispute resolution mechanisms; no-strike, no-lockout agreements; and targets for the proportion of hours to be completed by apprentices. It is also common for them to include detailed health and safety provisions. In the public sector, signatories can include the firm receiving the contract, a subcontracted construction manager, or the state or local government agency that will award the contract, while workers are represented by one or more local unions or the local building trades council.

No-strike conditions ensure work on a project proceeds smoothly. And in exchange for an agreement not to strike, unions negotiate better wages, benefits, and other terms of employment for workers.

While PLAs and CWAs create a forum for workers to negotiate for decent wages and work conditions, research finds that these sorts of agreements do not increase overall project costs.¹³ This is due to a number of factors: Workers on these sites are more experienced and productive; overall labor costs account for a relatively small share of total costs; work proceeds without disruption from labor disputes; and the agreements allow for a harmonization of schedules across employers and trades.¹⁴ Moreover, one construction industry consultant found that union labor is 14 percent more productive, and projects with collective bargaining agreements experience lower turnover, fewer shortages, and an average overall reduction in project cost by 4 percent compared with projects without these sorts agreements.¹⁵

PLAs and CWAs can also help build a pipeline of qualified workers by requiring that apprentices complete a certain proportion of the hours on a project, giving workers new to the construction trades valuable on-the-job experience and helping achieve other job quality and equity metrics prioritized in IIJA, CHIPS and Science Act, and Inflation Reduction Act funding programs. Moreover, workers and businesses or governments can negotiate on a range of issues, such as implementing preexisting local equity plans or hiring targets for including women, workers of color, disabled workers, and veterans, as well as goals for local business subcontracting, helping to overcome long-standing racism and sexism in the industry, which have sidelined too many talented workers.¹⁶ Indeed, collective bargaining agreements have been shown to reduce racial¹⁷ and gender pay gaps¹⁸ by ensuring equal compensation regardless of race or gender. As a result, PLAs and CWAs can also promote pay equity for women and workers of color by ensuring workers performing the same work are paid by the same standards.

Local- and targeted-hire provisions sometimes appear in PLAs and are the hallmarks of CWAs. As discussed below, PLAs and CWAs have successfully met and even exceeded equity access goals. For example, in U.S. Bank Stadium in Minneapolis, a PLA allowed the Minnesota Sports Facilities Authority to achieve higher employment for women and workers of color than its already ambitious targets.¹⁹

As a result, PLAs and CWAs make sense across broad geographies and allow jurisdictions to tailor their agreements toward their local or regional priorities. While some conservative cities and states have banned these agreements’ use on public projects as part of a suite of anti-worker policies, Michigan is debating language to repeal its ban and new federal investment promises to spark the use of PLAs and CWAs in more locations.²⁰

The Biden administration is encouraging the use of PLAs and CWAs among applicants for discretionary IIJA, CHIPS and Science Act, and Inflation Reduction Act funds. Agencies including the U.S. Departments of Transportation, Energy, Commerce, Housing and Urban Development, and the Interior have released notices of funding opportunities and workforce planning guidance that encourages bidders to adopt these agreements, while the Department of Labor has developed a guide to project labor, community workforce, and community benefits agreements along with resources for potential bidders exploring the benefits of these sorts of agreements.²¹

For example, DOT’s June 30, 2022, notice of funding opportunity for the Reconnecting Communities Pilot Grant Program states:²²

Capital Construction Grant applications should also address labor considerations by describing how the grant will support and use:

• Good-paying jobs with the free and fair choice to join a union, the incorporation of strong labor standards, pro-active anti-discrimination and anti-harassment plans, project labor agreements, workplace rights notices, training and placement programs, and local hiring and procurement preferences, particularly for underrepresented workers and individuals with convictions.
• High-quality workforce development programs with supportive services to train, place, and retain workers, especially joint-labor management training partnerships and registered apprenticeships.

In addition, DOT has had new successes in expanding PLA use by asking applicants for large federal awards to report separately on their use of these agreements. For instance, DOT’s January 27, 2023, notice of funding opportunity for the Buses and Bus Facilities and Low or No Emission Vehicle programs required applicants for facilities that cost more than $35 million to check a box noting whether the project will use a PLA or CWA,²³ with the result that 22 projects awarded funding will use PLAs.²⁴

While there is currently no official list of all new federally funded projects using or planning to use PLAs, some agencies are already announcing projects that have agreed to use PLAs, including in the following places: ²⁵

• San Diego, CA. The San Diego Association of Governments received a $150 million grant for the expansion of the port at Otay Mesa,²⁶ which will be covered by a PLA²⁷ negotiated in 2021 that guarantees workers receive prevailing wages and sets goals for hiring economically disadvantaged workers, minority and female workers, and apprentices.
• Oakland, CA. The Port of Oakland received a $36.6 million DOT grant to help implement its Seaport Air Quality 2020 and Beyond Plan to achieve zero emissions,²⁸ which will be covered by a PLA that the port has had in place since 2009²⁹ and sets base wages and hours; creates an apprentice hiring goal as well as a hiring goal for disadvantaged populations; and establishes a social justice committee between the port and unions to further inclusion of historically disadvantaged businesses and workers.
• Jacksonville, FL. As part of its move to zero-emissions infrastructure, the Jacksonville Port Authority is committed to developing a PLA as part of its $23.5 million grant from DOT.³⁰

• New York and New Jersey. In January 2023, President Biden announced a commitment to including a PLA as part of the Hudson Tunnel modernization project, the recipient of a $292 million Mega grant that is projected to create 72,000 jobs rehabilitating the Amtrak tunnel connecting Manhattan and New Jersey.³¹
• Washington, D.C., metropolitan area. The Washington Metropolitan Area Transit Authority will receive a $104 million Low or No Emission Vehicle Program grant to convert an area bus garage into a fully electric facility; purchase 100 battery-electric buses; and develop training programs for drivers, mechanics, and first responders.³² The transit authority has committed to adopting a PLA and registered apprenticeships on the project.³³
• Missoula, MT. The Missoula Urban Transportation District received a $39 million grant to build a facility for its Mountain Line bus service as part of its program to transition to a zero-tailpipe-emission fleet by 2035 that will include a PLA.³⁴
• New Orleans, LA. The New Orleans Regional Transit Authority was awarded a $71.4 million grant to purchase new electric buses and build a charging grid that will be covered by a PLA to support the city’s pledge to cut carbon emissions in half by 2030.³⁵

The federal government, states, and private sector alike have used PLAs and CWAs for nearly a century—with major New Deal projects such as the Hoover Dam³⁶ and the Tennessee Valley Authority³⁷ innovating the approach—to establish a baseline for job quality, labor stability, and a pipeline for underrepresented workers on publicly funded construction projects.

Policymakers can follow the examples set by successfully implemented PLAs in negotiating their own agreements with workers to set good pay and hours standards, recruit more women and workers of color, and track outcomes to ensure firms are living up to their promises:

• Edith Green-Wendell Wyatt Federal Building (Portland, OR). In 2009, then-President Barack Obama issued an executive order that encouraged government agencies to consider using PLAs in some federal construction contracts,³⁸ and shortly afterwards, the General Services Administration (GSA), citing the potential cost-saving effects of PLAs through fewer labor disputes and access to a highly skilled workforce,³⁹ included the $139 million renovation of the Edith Green-Wendell Wyatt Federal Building in Portland in a list of 10 GSA projects that would use PLAs.⁴⁰ The resulting PLA negotiated between the contractor and local labor unions not only included wage and hours standards, but also set aside 15 percent of project hours for apprentices and a union commitment to “engage in active recruitment of minority and female applicants.”⁴¹

  The project was successfully completed on budget and on time in just more than two years, creating 760 on-site jobs in Portland in the process of “turn[ing] an ugly duckling into a beautiful swan,” in the words of GSA public buildings service commissioner Dorothy Robyn.⁴² A 2015 study from the Oregon Bureau of Labor and Industries found that the project reached its apprentice utilization goal, with 19.5 percent of hours worked by apprentices. Notably, the agreement increased female participation well above the national average but was less successful in recruiting African Americans, with researchers concluding that stricter goals on hiring for women and workers of color would have led to greater success.

• U.S. Bank Stadium (Minneapolis, MN). Minneapolis construction unions and a contractor negotiated a PLA as part of the 2013 construction of U.S. Bank Stadium—home of the Minnesota Vikings—that successfully implemented goals both to “mutually establish and stabilize wages, hours and working conditions for the craftworkers on this construction project, to encourage close cooperation between the Contractor(s) and the Unions to the end that a satisfactory, continuous and harmonious relationship will exist” and “facilitate the hiring and utilization of minorities, women, and veterans.”⁴³ The Minnesota Sports Facilities Authority, a public board, adopted an equity plan with specific goals on hiring minority and female workers, and the PLA included a commitment to meet these goals.⁴⁴

  The successful implementation of the PLA and equity plan—which included an online monitoring mechanism with regular, verified updates from contractors and vendors on utilization performance—resulted in minority workers holding 36 percent of the 7,500 jobs created by the project and women holding 9 percent of these jobs, exceeding the targets of 32 percent and 6 percent, respectively.⁴⁵ The agreement also included provisions on wages, hours, and dispute resolution and prevention of work stoppages, and the project was ultimately completed six weeks ahead of schedule.⁴⁶ One of the builders praised the outcomes of the PLA and working more closely with Iron Workers Local 512, stating, “I am extremely proud of the accomplishment of our crews on the Vikings’ U.S. Bank Stadium project. Local 512 did a great job using creative methods of outreach. Our joint apprenticeship committee has focused on increasing apprentice retention and graduation rates by changing our entrance methods, incorporating field trips, mock-ups and mentoring programs to our apprenticeship classes.”⁴⁷

• LA Metro (Los Angeles, CA). The Los Angeles County Metropolitan Transport Authority (LA Metro) signed a PLA and a construction careers policy (CCP) with local building trades in 2012, which it renewed in 2017, that applies to a wide range of projects, including projects built with federal funds.⁴⁸ In addition to provisions for wages and benefits, hours, nondiscrimination, safety, and dispute resolution, the PLA sets strong standards for targeted local hiring, with a requirement of 40 percent participation from workers from economically disadvantaged areas, 10 percent from disadvantaged workers, and 20 percent from apprentices. Additionally, LA Metro included oversight mechanisms that ensure contractors meet utilization goals and allow public monitoring of hiring commitments for women, apprentices, and workers of color through monthly reports on individual project hours accessible to the public online.⁴⁹

  With 24 projects completed under the terms of the PLA as of June 2020 and 14 projects currently underway, the PLA has led to improved hiring rates of targeted workers.⁵⁰ Then-U.S. Secretary of Labor Tom Perez praised the program’s successes in 2014,⁵¹ describing LA Metro’s approach as a “great model” that is “punching [workers’] tickets to the middle class.”⁵²

By passing the IIJA, CHIPS and Science Act, and Inflation Reduction Act, the Biden administration has an opportunity to create tens of thousands of good jobs nationwide. But these good jobs will not materialize on their own. Federal agencies must encourage more applicants to commit to adopting project labor agreements and community workforce agreements during bidding and to continue engaging with community and labor stakeholders to monitor compliance throughout the build. These agreements are effective tools for creating good value on taxpayer-funded projects, ensuring workers earn fair wages and good benefits, and increasing job access for workers from all walks of life, especially women and workers of color. PLAs and CWAs have long been used successfully to achieve these goals nationwide. In order to meet this moment, agencies awarding grants, loans, and incentives from America’s largest investment in infrastructure in decades must make use of PLAs and CWAs.