By Brittany Alston * July 2, 2018
Economic Development / Jobs & Training
Executive Summary
Over the past twenty years, the District has seen dramatic economic and population growth, including a development boom that has transformed the city’s skyline, remade neighborhoods, and changed the city’s employment landscape. These changes have led to prosperity for some, but that prosperity has not been shared with DC’s low-wage workers. District leaders should seize on DC’s growth as an opportunity to encourage “high-road development,” pairing development with high-quality jobs in ways that will support workers, residents, and high-quality development projects.
By taking a high-road economic development approach-in which developers partner with unions, invest in workers, and provide quality employment opportunities to residents-the District can ensure that the city’s ongoing growth provides benefits to DC residents and workers. Unfortunately, District leaders have missed many opportunities to practice high-road development. In projects such as the Wharf and Union Market, the city has sweetened development deals with large subsidy packages, without setting job quality standards for District workers – subsidizing low-wage, low-quality employment that makes it hard for workers to make ends meet in a city where the cost of living keeps going up.
High-road development is associated with higher wages and benefits, reduced incidents of wage theft, and boosts to the local economy when workers spend their additional earnings. High-road development also helps ensure that projects are completed in a timely way and with high quality.
Looking to other jurisdictions that have taken a high-road approach can equip the District with tools to adopt high-road development. By enforcing existing labor laws, attaching job creation and quality standards to all economic development policies, and penalizing subsidy recipients if they fail to meet job quality requirements, policymakers can ensure that the District is taking the high road when it comes to economic development.
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A “High-Road” Approach Could Make DC Development Work for Workers and Residents
High-road economic development seeks to create an environment where both public and private entities value a diverse and skilled workforce, seeing the workforce as a profitable asset that must be sustained and invested in over time. High-road economic development ensures that public dollars result in public benefits and economic growth-this includes a high quality of life for residents and effective and transparent governance.
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During the decision-making process, developers can factor these benefits into a robust impact analysis to see the benefits of hiring union workers and paying living wages. For example, The AFL-CIO Building Investment Trust, a bank collective trust and trustee of PNC bank, invests in commercial real estate using union pension funds and relies solely on organized labor when building. Their investments created a portfolio with approximately $5 billion in net assets and 78 million hours in union construction work and created thousands of unionized operation jobs, with properties in the District and nationwide. For the AFL- CIO Building Investment Trust, high-road development remains a profitable financial proposition, as they continue to invest in union projects.
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UNIONIZATION IS A CRUCIAL COMPONENT TO HIGH-ROAD DEVELOPMENT
An essential component of high-road development is collaboration with labor unions. Many high-road developments start with project labor agreements-agreements between the building trades and project developers that govern the conditions of employment for the project and create project management efficiencies-during the project’s construction phase. Once the construction is complete, employees of the businesses located at the development site may want union representation as well.