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.
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
What are PLAs and CWAs?
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.
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 4 percent reduction in project costs.
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.
Collective bargaining agreements have been shown to reduce racial and gender pay gaps by ensuring equal compensation regardless of race or gender.
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
How the Biden administration is encouraging PLAs on IIJA, CHIPS and Science Act, and Inflation Reduction Act funds
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
How Project Labor Agreements and Community Workforce Agreements Are Good for the Biden Administration’s Investment Agenda – Center for American Progress
