Construction workers pouring wet concrete on a road. With 20% of the projected infrastructure bill, or $ 110 billion, spent on building roads and bridges, small construction companies are hoping for a long-term boom in activity.
As small businesses recover from workforce constraints and business losses from Covid-19, a bipartisan infrastructure bill offers hope for a boom to come as it grows make its way into the chambers of Congress.
On August 1, the US Senate finalized the text of the Infrastructure Investment Jobs Act, outlining $ 550 billion in new spending on roads, bridges, public transportation, electric vehicle charging stations, and other infrastructure. physical, creating jobs and pulling the US economy out of a pandemic decline.
The White House says the bill will create about 2 million jobs per year for American workers and that the projects will last for a decade. Senate Majority Leader Chuck Schumer said he expects the Senate to finalize the bill within days.
The corporate world has approved President Biden’s infrastructure plan as overdue. Here’s how various factions within the small business community think about it.
Federal money will go to small businesses
With potential mass spending on physical infrastructure coming in the coming years, a range of small businesses plan to benefit from upcoming projects and contracts.
Although for John Walton, owner of the John G. Walton Construction Company in Mobile, Alabama, the infrastructure bill will not only bring a boom to the economy, but also a much needed improvement to dilapidated structures across the country.
Specializing in asphalt and highway construction, Walton’s company, like many other small businesses, is gearing up to cash in on federal projects once it begins to find its way into state governments.
Walton said federal projects are managed by individual states. In Alabama, the Department of Transportation opens projects once a month to tenders from local contractors. Once the bill is enacted and federal money is paid out to individual states – the timing is uncertain although there is usually a lag between when a bill is enacted and when the dollars federal funds are allocated – local businesses like Walton can bid on these projects.
With 20% of the bill, or $ 110 billion, spent on building roads and bridges, Walton is hoping for a long-term business boom.
“If the states have the money, they can plan these projects,” Walton said. “Sometimes it takes two or three years from design to actual construction, which really helps contractors because they know what’s going on down the pipe.”
These projects will also help small businesses recruit in today’s job market, according to Brian Turmail, spokesperson for the Association of General Contractors of America.
“Adopting any significant multi-year infrastructure measure will in fact provide invaluable recruiting benefits for our industry,” said Turmail. “Because it will signal a new generation of workers that there will be great infrastructure jobs for a long time to come.”
Union jobs and infrastructure projects
One of President Joe Biden’s main promises with the infrastructure bill is to create jobs specifically for unionized workers, according to the White House.
Even though the Infrastructure Investment and Jobs Act does not designate specific projects for unionized workers or require that certain roles be filled only by unionized workers, John Samuelson, president of the Transport Workers Union, said the projects infrastructure will inevitably lead to worker roles.
“When you look at it it’s not like there’s a line saying ‘all of these jobs will be unionized’ but there are good, solid wage demands throughout the bill,” Yvette Pena said. -O’Sullivan, LiUNA spokesperson. , the International Union of North American Workers, which represents unionized workers in the construction and energy industry in the United States and Canada.
Pena-O’Sullivan said any type of federal spending requires companies to pay their contractors and workers appropriate salaries based on the location of the project. Location-based wages are set by the Department of Labor in accordance with the Davis-Bacon Act.
“When you have a floor on your wages and requirements, it allows union contractors to compete and get the job,” said Pena-O’Sullivan. “So they’re not competing with entrepreneurs who are trying to lower wages and pay people as little as possible.”
In addition to wage demands, unionized workers in all industries should benefit from the influx of jobs created by infrastructure projects.
“Regardless of what’s in the text or not, this will definitely help unionized workers in union-dense areas, the Northeast, California, the Midwest,” Samuelson said.
The bill allocates $ 39 billion to improve public transit and an additional $ 66 billion to modernize and expand passenger and freight rail transportation. Samuelson said all unionized workers would benefit from investments in the public transportation industry, from Miami to Houston, northern Pennsylvania and across the south.
Beyond geography, Samuelson said the public transport industry has one of the highest union membership and other projects are taking place in sectors with high union concentration.
In 2020, there were 7.1 million unionized workers in the private sector and 7.2 million in the public sector, according to the Bureau of Labor Statistics. Of the 7.1 million unionized workers in the private sector, 20.6% work in the utilities industry, 17% work in transportation and warehousing and 14.3% work in telecommunications.
“Modernizing infrastructure creates jobs, and many of them will be unionized,” said Ed Mortimer, vice president of transportation and infrastructure at the US Chamber of Commerce. “These are high paying jobs that help American families.”
Revitalizing Main Street America
In addition to roads, bridges and public transportation, the infrastructure bill provides an additional $ 65 billion for broadband, $ 73 billion for electrical infrastructure and $ 21 billion for environmental clean-up. , which presents revitalization prospects for small businesses in local communities.
“Our infrastructure is collapsing,” said Kriss Marion, owner of Circle M Market Farm, a local farm in Blanchardville, Wisconsin. “Our roads, our bridges, in some cases our water treatment facilities, our pipes. We have suffered for so long from a chronic lack of investment.
She said the infrastructure bill gives hope to local communities that they can be engines of the economy, and in the case of her community in particular, improving roads and bridges will allow agriculture to move more easily and people to get to cities more easily.
Broadband poses an even greater challenge, with 14% of Wisconsin households not having internet access, Marion said. The prospect of increasing broadband infrastructure across the state is key to the future of rural development.
“I think we are going to see a renaissance of rural tourism and rural economies,” she said.
Broadband infrastructure improvements can save small businesses as the economy turns to online shopping and services, said Sarah Crozier, spokesperson for the Main Street Alliance, an advocacy organization. small enterprises.
“It will be important for small businesses to have access to investments in broadband so that they can be competitive across the country,” said Crozier. “So we don’t just rely on massive online monopolies. “
But Crozier said there is a criticism that needs to be leveled against the bill: To get a bipartisan deal on the package, many “human infrastructure” ideas that had been championed by progressives have been postponed to a later date and a separate legislative effort, and many remain concerned about the fate of this part of infrastructure spending.
“These gaps need to be filled by the reconciliation program, especially around other bridges and roads that allow people to work, namely child care and health care,” said Crozier.
Congressional leaders, Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi, want to pass the infrastructure bill and a $ 3.5 trillion reconciliation plan, which will invest in child care, paid time off, education and efforts to tackle climate change.