Linking Public Works to Local Hiring Faces a Trump Challenge

Linking Public Works to Local Hiring Faces a Trump Challenge

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“Why not let cities and states innovate to create the good American jobs that the administration has been clamoring for?” said Madeline Janis, the executive director of Jobs to Move America, a coalition of faith, labor and other groups that want transportation funding to benefit local communities. “I don’t understand why they would want to cancel the program.”

Legal and regulatory hurdles have long frustrated officials trying to create job opportunities that favor local residents. The Supreme Court has ruled it is unconstitutional for employers in one state to discriminate against residents of another. Federal agencies, through Republican and Democratic administrations, have maintained that restrictions like competitive bidding prevent them from contributing a cent to public projects with hiring preferences. And state lawmakers, complaining that employers and workers outside the target city are at a disadvantage, have outlawed such preferences.

Jobs to Move America was one of several groups that spent years working with transportation officials in the Obama administration on a pilot project to test whether local hiring preferences reduced competition or drove up prices. In January, days before President Trump was sworn in, the Transportation Department extended the experiment, taking place in more than a dozen cities, for five years so that research could be completed.

In other areas, like education, Mr. Trump has chastised the federal government for imposing “its will on state and local governments.” This week, however, a Transportation Department spokesman said that “the prior administration’s proposed rule and proposed long-term extensions of pilot programs is under review.”

The agency’s move troubled officials both within and outside the affected cities.

In Los Angeles, where $36 billion is committed to the region’s public transportation projects, the Obama administration’s pilot program “helps L.A. multiply the benefits of federal transportation dollars, in a way that strengthens our local economy and gives our workers a chance to build new careers,” said George Kivork, a spokesman for Mayor Eric Garcetti.

Cleveland, which is not a part of the pilot project, has been fighting for its own local hiring ordinance in the courts, Washington or the Statehouse since it was first adopted in 2003.

The city shaped the law — named in honor of a longtime councilwoman, Fannie Lewis — to avoid the constitutional objection to treating out-of-state contractors differently: The residency preferences applied only to construction hours worked by people from Ohio.

Citing federal restrictions, however, the Federal Highway Administration still ended up using its discretionary power to withdraw funding for a project there because of the Lewis law. And in 2009 during the recession, President Barack Obama’s transportation secretary rejected Cleveland’s request to apply its provisions to the city’s share of federal stimulus money.

Ironworkers on a highway bridge under construction in Cleveland. The city has faced state and federal opposition to its local hiring ordinance since it was first adopted in 2003.

Credit
Mark Duncan/Associated Press

But state officials argue that the ordinance puts Ohioans outside Cleveland at a disadvantage when compared with out-of-state workers and companies. The state’s engineering companies association, for example, complained that such laws “restrict the ability of qualified design professionals to engage in public works projects and compromise the quality of design on such projects.”

The Ohio Legislature passed a ban last year on local hiring provisions, similar to restrictions that exist in Tennessee and other states. But a county judge struck down the law eight months later after Cleveland sued, arguing that the city’s home-rule rights were violated. The state is appealing that ruling.

The ban, Attorney General Mike DeWine of Ohio argued in his appeal, “protects construction workers from residency quotas” like those that exist in Cleveland and Akron, and “allows construction workers to live where they want without losing out on available work.”

Mayor Frank G. Jackson of Cleveland countered that cities often spend huge sums on development activities, but “don’t necessarily see the benefits going back to their citizens, in terms of contracts and wages.”

“We didn’t do this willy-nilly,” he said of the city’s hiring law. “This is just common-sense stuff.”

According to figures compiled by the mayor’s office, one-fifth of all work hours went to Cleveland residents and 11 percent of those Cleveland hours went to low-income residents.

Other cities have managed to walk the tightrope and establish programs. After Hurricane Katrina, New Orleans lawmakers hoped to make a dent in the city’s staggering unemployment rate among African-Americans by requiring at least 30 percent of work on city construction contracts to be done by local residents; 10 percent of that was reserved for the disadvantaged.

In San Francisco, an ordinance eventually requires at least half of all work hours and apprenticeship hours on public construction projects to be done by people living in the city. And in Kotzebue, Alaska, public works projects have to “make a good-faith effort” to ensure that residents make up at least 50 percent of the contractor’s total construction work force.

In Indianapolis, where a public transit overhaul was approved a few months ago, advocates and officials are working to link the construction with a local employment and training program, but it is not easy.

“There are still a lot of hurdles to navigate this issue, and we haven’t figured any of this out yet,” said Bryan Luellen, vice president for public affairs and communications at Indygo, the city’s public transportation corporation. Even though the bulk of the project may be financed with city money, he said, “the you-have-to-hire-locally piece is not something we’re going to be able to do without special permission from the Federal Transit Administration.”

In 2015, Boston chose the mammoth rail company owned by the Chinese government, China Railroad Rolling Stock Corporation, or CRRC, for a $566 million contract to build new rail cars in return for the company’s opening a $95 million, 40-acre rail factory in East Springfield, Mass. But there is no federal money involved.

Chicago, too, chose a joint venture that includes CRRC, but managed to work around the federal restrictions with a strategy that Jobs to Move America helped devise. Although the transit authority could not give a preference to local hiring, it was allowed to take into account CRRC’s promise to create 170 jobs in the United States as a whole. (The fact that they were being created in Chicago was not formally a part of the process.)

Bombardier, with existing plants in Pennsylvania and New York, objected, arguing that maintaining jobs elsewhere in the United States should have been given equal weight. After protesting first to the city and then to the Federal Transit Administration, Bombardier ended up withdrawing its federal appeal, said Maryanne Roberts, a company spokeswoman.

In March, CRRC broke ground on the new factory in Chicago’s Hegewisch neighborhood. The plant will provide a local supplier of the city’s rail cars for the first time in 50 years.

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