The U.S. appears positioned to make a roaring comeback if trillions of dollars in federal funding can be put to use for infrastructure development. Opportunities abound for companies around the world that can perform the work necessary to repair and improve the nation’s highways, bridges, rail connections, and ports.
But construction takes labor. That is why this program is called The American Jobs Plan. For companies looking to be a part of this effort, particularly for those working with the federal government as contractors or subcontractors, it is essential to understand what direction U.S. labor is taking.
Four Evolving Scenarios for Labor
There are four evolving scenarios that companies need to watch in the coming months.
First, unions are likely to play a big role in representing the employees working on these projects. President Biden has made the strongest pro-union statements to come from the White House, probably since Eleanor Roosevelt lived there. In the fact sheet that he issued on March 31, unions are mentioned 24 times. Included is a demand that companies working under this plan remain neutral when their employees seek to organize a union.
If a company has not had significant experience with labor unions, now is the time to get up to speed. Effective management of labor relations is critical to such projects staying on schedule.
Second, there will be an emphasis on engaging minority-owned and small businesses. The president’s plan includes an instruction for government to emphasize ‘Made in America’ and makes clear that means an increased emphasis on inclusion of minority-owned and small businesses.
Federalism will affect the overlapping requirements of federal, state, and city governments. Working with various levels of government is an art, and I can say from direct experience that the competition between cities and various levels of government is real and has to be understood and managed.
Third, community involvement will be at a premium. The president specifically calls for making community consultation a priority. These will be high-profile projects that some advocates will try to kill. It seems to always happen, regardless of the merits of project or its benefits to the local community.
You may never win over the critics, but if you have effective dialogue with the rest of the community, you can control the damage that the opponents could create.
Fourth, safety programs that truly protect employees will be vital. The plan emphasizes that the American jobs created by this plan must be in safe and healthy workplaces. The pandemic exposed the fragility of the U.S. workplace, and when these major infrastructure projects are up and going, accidents may lead to serious reputational and legal consequences for the companies involved.
As the U.S. economy returns, finding experienced workers may become difficult. There will be a premium on training and the time it takes to get inexperienced workers ready to start work. Planning now to introduce such workers safely into the workforce is essential.
Companies Need to Prepare Now
For companies looking to participate in this wave of infrastructure possibilities, now is the time to consider and prepare for the issues affecting the workforce. To do that, the company’s corporate structure needs to be considered in terms of how obligations, whether in terms of collective bargaining agreements with unions or affirmative action plans under government regulations, may impact all levels of the organization.
It is time to review the entire process of contracting and subcontracting and the controls necessary to coordinate the opportunities with the attendant obligations. Companies need to develop the due diligence processes to assess a community and how a project should be structured and operated in a way that is appropriate for that community, the business, and the employees of the company.
The training and audit capabilities necessary to operate best-in-class safety programs should be developed now.
Preparing for the complexities of managing workplaces and communities is how companies avoid delayed or canceled projects. If a company has some prior understanding of the types of negotiations that will occur with labor representatives, community leaders, and government officials, the company is able to develop policies and practices that put it in the best possible negotiating position.
There are significant opportunities available in the opening of the U.S. economy and the government’s newfound emphasis on infrastructure projects. At the same time, the Biden administration will likely emphasize that the companies performing work on these projects have what the administration considers suitable labor, subcontracting, community relations, and safety programs.
Those companies that prepare in these areas now will be at the front of the line when the time comes.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Tom Wilson is a partner with Vinson & Elkins in Houston where he focuses on employment, labor, and safety law.