Private capital investments in infrastructure projects often ignore the perspective of local labor organizations. Not necessarily because investors oppose working with organized labor, but rather labor may simply not be front-of-mind of those considering an infrastructure investment. There have been many quality infrastructure opportunities that never came to fruition because investors did not consider the labor perspective and its impact and potential benefits. In our experience, successful investments are those that view labor as a true stakeholder, not simply as an input where the cost must be minimized.
When labor is considered a partner, there is a higher degree of confidence among all stakeholders that the work is being performed by properly trained professionals with countless hours of safety training. It can be considered a risk mitigation policy; we believe the odds are increased that the work will be done right, on time and on budget. Moreover, when labor is a partner, a project is more likely to have labor peace. These are real benefits to an investor, as poor quality, jobsite accidents, and/or labor disputes can, at the very least, cause a significant drag on any infrastructure investment.
Another common issue is that, in many places, labor is represented by a centralized organization that covers all workers – building and construction trades, the service sector, the industrial and public sector unions, etc. Often, these centralized organizations are made up of hundreds of separate unions, some of which may have divergent priorities. As a result, getting the central labor council to support a project can be challenging. For example, if the electricians and plumbers are happy with a deal because it creates jobs for its members, but the service sector trades are not, because the operation and maintenance of the asset will be performed by non-union members, the labor council may be pushed to a neutral position on the project. It is a nuanced but important distinction that can have implications on whether the organization will be an active advocate for the project, which can help determine if the deal moves forward or not. A savvy investor will recognize these nuances and work with the central labor council to garner support from member unions at the earliest stages of project development.
It is important to remember that infrastructure is inherently local and impactful to everyday life. We believe that if an investor approaches projects with an eye toward collaboration with key stakeholders such as labor, they can earn a reputation for being fair, which may prove beneficial in the immediate-term as well as the long-term.