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Biden’s Infrastructure Package Is Designed to Boost Unions

As reported by Kate Davidson and Amara Omeokwe for The Wall Street Journal

President Biden’s $2.3 trillion plan to invest in infrastructure, clean energy and caregiving over the coming decade would be a boon for construction workers, truck drivers, electricians and home health aides.

Both critics and supporters of the initiative say it will also benefit another group: labor unions.

Some business groups, employment law experts and Republican lawmakers say provisions aimed at bolstering union membership and expanding labor protections could increase costs, limit the number of projects that can be completed with the proposed funding and reduce the gains in economic growth.

For Mr. Biden, those provisions are key to ensuring the package creates millions of “good-paying union jobs of the future.” In 2020, just 10.8% of U.S. workers belonged to unions, half the share in 1983, but those workers earned a dollar for every 84 cents earned by nonunion workers.

“The president has made very clear that he wants to be the most labor-friendly president in history, and the steps that he’s taking in many different ways are designed to accomplish that,” said Michael Lotito, co-chairman of the Workplace Policy Institute at Littler Mendelson, an employment law firm based in San Francisco.

The Democratic administration’s plan includes spending on an array of industries over eight years. The proposal includes $621 billion to modernize transportation infrastructure, $300 billion to boost the manufacturing industry, $213 billion on retrofitting and building affordable housing and $100 billion to expand broadband access, among other investments.

Many of the new jobs are likely to be union positions, because the plan targets sectors that already have high levels of union participation, said Greg Regan, president of the Transportation Trades Department, a coalition of unions in industries such as aviation and rail transit.

Even within those industries, a minority of workers are union members, including 20.6% of utility workers, 17% of transportation and warehousing workers and 14.3% of telecommunications workers, according to 2020 Labor Department data.

“There is a very glaring need for this type of big investment, and if done with the right policies—in many ways, existing programs already have them—that will not only improve our transportation systems across the board, but also build union jobs and middle-class jobs,” Mr. Regan said.

Bill Spriggs, chief economist at the AFL-CIO, said implementation of the package, particularly for construction projects, should gravitate toward unions if the goal is to promote racial equity—a stated priority for the Biden administration. Black workers are more likely to be represented by a union than other racial groups, according to Labor Department data.

The overall fall in union membership is a sign of the decline in power of organized labor in the U.S. and reflects slower employment growth in traditionally more unionized industries, such as manufacturing, transportation and utilities, compared with healthcare and other services.

Economists have pointed to the decline as a reason why wage growth in the U.S. was relatively soft in the years leading up to the coronavirus pandemic, despite low unemployment and steady hiring. Median weekly pay for full-time union members was $1,144 last year versus $958 for nonmembers, the Labor Department said.

Mr. Regan said provisions in the package—such as a measure that seeks to have more goods shipped on U.S.-flag vessels staffed by American workers—would also be a boon for union positions.

The package proposes tying federal investments to prevailing wages, echoing existing law that requires federal contractors and subcontractors on public works projects to offer workers pay commensurate with local wages.

It also includes a provision that would require employers benefiting from the plan’s investments “to follow strong labor standards and remain neutral when their employees seek to organize a union and bargain collectively.”

“It’s not just about getting people off the unemployment rolls, it’s about getting people in good-paying jobs so they can raise their families,” Labor Secretary Marty Walsh said in an interview with The Wall Street Journal on Friday.

Those provisions could benefit other sectors targeted in the proposal where union membership is slimmer, including among caregivers. Mr. Biden’s plan would allocate $400 billion in funding for long-term care for the elderly and disabled.

Leslie Frane, executive vice president of Service Employees International Union, estimated the caregiving provision could create close to a million new jobs and improve the jobs of current home care workers, a total of 3.2 million jobs in 2020, according to the Labor Department. Those workers are the lowest paid among healthcare sector employees, with a median wage of $28,060 last year.

Low pay and lack of benefits are two reasons the rapidly growing sector faces a labor shortage, said Ms. Frane, who added the Biden plan would make it easier to unionize and subsequently attract new hires. The changes would especially benefit women and women of color, who make up the majority of home care workers, she added.

There are potential drawbacks to the labor provisions, detractors said. They will likely raise project costs, meaning the government can’t build as much for a given dollar of spending, said University of Missouri professor Aaron Hedlund, who served as chief domestic economist for former Republican President Donald Trump’s Council of Economic Advisers.

“If we don’t build as much, that means we aren’t going to get as much economic benefit out of it,” Mr. Hedlund said.

Mr. Lotito said nonunion contractors may also be wary of bidding for projects that could open them up to a potential unionizing effort among their workers. “The big winners here are the union-building trades,” he said.

The package also would include legislation that would make it easier for workers to unionize and toughen enforcement of the National Labor Relations Act. The bill, known as the Pro Act, passed the House on a near-party-line vote with nearly all Republicans voting against it and faces an uncertain future in the evenly divided Senate.

Many GOP lawmakers say the Pro Act would stifle business and empower union leaders. While most Democrats support it, some centrist Democrats, such as Sen. Joe Manchin of West Virginia and Sens. Kyrsten Sinema and Mark Kelly of Arizona, haven’t signed on as co-sponsors.

The Biden package could also create some frictions in the labor market due to mismatches between the skills required for some of the new jobs and the skills of unemployed workers. The White House has proposed $100 billion in new training programs to help bridge the gap.

Ken Simonson, chief economist for the Associated General Contractors of America, said it was unlikely the package—which could take most of the year to make its way through Congress—would run up against an immediate worker shortage.

While construction employment hasn’t fully recovered last year’s losses, job growth in the sector has been much stronger than in most other industries, adding more than 100,000 jobs last month, and some construction firms report labor shortages. Training will be essential, Mr. Simonson said. For example, there are a limited number of tower crane operators who would be able to work on projects such as wind turbines.

It could take quite a while to find enough workers to do some of the jobs to be created by the package, Mr. Simonson said. “On the other hand, we think there will be a fairly long lead time to actually get these projects launched.”

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