The City of Tacoma, local unions, and community leaders, are considering a Community Workforce Agreement (CWA) for its publicly funded construction projects to ensure that local residents, businesses, and communities of color have the opportunity to benefit from the economic growth of the area. CWA’s are designed to help low-income workers enter into the construction careers, by providing job quality standards and targeted hiring requirements. There are several factors that need to be considered to see if a CWA is right for Tacoma. Policy analyst will need to review local market information about workforce supply and local demand needs, identify the potential impact of increasing low-wage workers in the construction trades, review current available tools, and provide policy recommendations for a CWA.
City of Seattle Priority Hire Agreement
In cities across the country, publically funded construction projects offer real career opportunities that can be leveraged to help provide financial stability and economic growth for low-income residents and the communities they live in. One recent example of how cities are trying to capture these opportunities is in Seattle. On January 29, 2015, the City of Seattle passed a “new priority hire ordinance that directs all city funded construction projects of $5 million or more will be required to have a percentage of project hours performed by workers living in economically distressed areas”. In addition, city projects have apprentice utilization requirements and women and people of color aspirational goals. (Priority Hire, 2017)
The results of Seattle’s new ordinance is already showing signs of success and acknowledging areas that were challenges. Highlights from the “Priority Hire 2016 Annual Report” showed that the program: almost doubled the amount of project hours that are being performed by workers living in economically distressed zip codes; workers are earning more and bringing millions of dollars back into their community; work hours performed by women on city projects nearly doubled; and women and minority owned business (WMBE) utilization represented 15.9 percent of projects. The challenges noted mainly had to deal with increasing access to make the policy more effective. The priority hire agreement is moving Seattle in the right direction to maximize their economic growth opportunity for residents and Tacoma leaders are exploring their own policy tools for workforce development strategies in the construction trades.
Vision for the City of Tacoma
Tacoma (population 203,446) is located in the Puget Sound Region, which is forecasted to reach a population of nearly five million people and grow to add more than three million jobs by 2040. (City of Tacoma, 2016) On January 27, 2015 the City Council approved the City of Tacoma’s ten-year citywide strategic plan and vision, “Tacoma 2025”. The plan resulted from a shared vision that was created with input from over 2,000 engaged residents. The community identified seven focus areas: health & safety, human & social needs, economic vibrancy & employment, education & learning, arts & cultural vitality, natural & built environment, and government performance. All focus areas are guided by four principles important to the community: opportunity, equity, partnerships, and accountability. Tacoma 2025 presented 22 very clear community priorities and accountability measures for the city and 6 of those goals would be directly impacted by a CWA with targeted hiring requirements.
Tacoma 2025 Goals (6 of 22)
- Reduce poverty. Reducing poverty is the best way to ensure that all Tacoma residents have resources to meet their needs.
- Increase the number and quality of jobs throughout Tacoma. Tacomans will have more economic opportunities—partners will strive to recruit, retain, and expand job opportunities throughout the community.
- Diversify Tacoma’s living wage business base. Providing jobs at living wages is a top priority; well-paying jobs helps the community meet multiple goals.
- Prepare people to succeed in Tacoma’s workforce. All residents should be prepared to succeed at jobs that are located in Tacoma or anywhere.
- Improve and maintain Tacoma’s streets. Tacoma’s residents are concerned about the condition of their streets; maintenance is a top priority.
- Engage residents, stakeholders, and partners in the future of Tacoma. Creating a better Tacoma requires engaged residents and strong partnerships. (Tacoma 2025, 2016)
In addition to the strategic goals of 2025, the City of Tacoma’s Economic Development Department has identified “strengthening the quality and competitiveness of Tacoma’s workforce and focusing on ethnic and economically challenged communities” as part a strategic framework to maximize the full economic potential of Tacoma.
Over the next ten years, Tacoma estimates over $1 billion in planned development projects in the Downtown/Hilltop area alone; a neighborhood with the highest percentage of households below the federal poverty level (FPL) and one of the most racially diverse areas of the county. Simultaneously, one of the biggest issues facing the construction industry is the lack of enough skilled workers to fill the jobs. Strengthening the local construction workforce pipeline has mutually beneficial effects to the industry with new work talent and communities that raise household income for families.
Project labor agreements, community benefit agreements, and community workforce agreements are all some of the common tools that can be used to maximize economic growth opportunities through infrastructure and other capital projects. They also have the potential to help meet apprenticeship utilization and diversity goals that are important to a thriving diverse workforce. Considering a CWA for publically funded projects that could operate similar to Seattle’s policy could help ensure that more local residents, businesses, and communities of color have the opportunity to benefit from this economic growth – opportunities desperately needed in the Tacoma and Pierce County area.
Potential Economic Impact
Strengthening the local construction workforce pipeline has mutually beneficial effects to the construction industry and local economy. For every household that was previously below the federal poverty level that decided to move into the construction trades as a career, the economic benefit over a five-year period is as much as $235,000 in local purchasing power, sales tax revenue, and reduction in public benefits. If Tacoma were able to continue 3 percent (or 254) of the statewide annual openings in the construction trades, the local economic benefit could be as much as $59.8 million dollars over a five-year period. Leveraging the investment Tacoma makes in our roads, buildings, and construction projects for “Good Jobs; and Local Hires” in our community is an appropriate way to build the local economy.