Construction workers pouring wet concrete on a road. With 20% of the planned infrastructure bill, or $110 billion, dedicated for the construction of roads and bridges, small constructions firms are hoping for a long-term boom in business.
As small businesses recover from labor constraints and business losses due to Covid-19, a bipartisan infrastructure bill offers hope of a coming boom as it makes its way through the chambers of Congress.
On Aug. 1, the U.S. Senate finalized text for the Infrastructure Investment Jobs Act, outlining $550 billion in new spending for roads, bridges, public transportation, electric vehicle charging stations and other physical infrastructure, creating jobs and pulling the U.S. economy out of a pandemic downtick.
The White House says the bill will add roughly 2 million jobs per year for American workers, and projects will last over the course of a decade. Senate Majority Leader, Chuck Schumer said he plans for the Senate to finalize the bill in a matter of days.
The corporate world has endorsed President Biden’s infrastructure plan as being overdue. Here’s how various factions within the small business community feel about it.
Federal money will flow to small businesses
With potential mass spending in physical infrastructure coming in the years ahead, an array of small businesses plan to benefit from upcoming projects and contracts.
Though for John Walton, owner of John G. Walton Construction Company in Mobile, Alabama, the infrastructure bill will not only bring a boom to the economy, but much needed improvement to dilapidated structures across the country.
Specializing in asphalt and highway construction, Walton’s company, like many other small businesses, is preparing to cash in on federal projects once it starts making its way through state governments.
Walton said federal projects are handled through individual states. In Alabama, the Department of Transportation opens projects once a month to bids from local contractors. Once the bill is signed into law and the federal money is given to individual states — timing is uncertain though there is typically a lag between when a bill is signed into law and when federal dollars are allocated — local businesses like Walton’s can bid on these projects.
With 20% of the bill, or $110 billion, dedicated for the construction of roads and bridges, Walton is hoping for a long-term boom in business.
“If states have the money come in, they can plan those projects out,” Walton said. “Sometimes it takes two or three years from design to actual construction, so that really helps contractors because they know what’s coming down the pipe.”
These projects will also help small businesses with recruiting efforts in the current tight labor market, according to Brian Turmail, spokesman for the Association of General Contractors of America.
“Passing any large, multi-year infrastructure measure will actually provide invaluable recruiting benefits for our industry,” Turmail said. “Because it’s going to signal to a new generation of workers that there’s going to be great infrastructure jobs out there for a long time.”
Union jobs and infrastructure projects
Even though the Infrastructure Investment and Jobs Act doesn’t designate specific projects for union workers or require certain roles be filled only by union workers, John Samuelson, president of the Transport Workers Union, said infrastructure projects will inevitably lead to roles being filled with union workers.
“When you’re looking at it, it’s not as though there’s a line saying ‘all these jobs will be union’ but it does have good, solid wage requirements throughout the bill,” said Yvette Pena-O’Sullivan, spokeswoman for LiUNA, the Laborers’ International Union of North America, which represents union workers in the construction and energy industry in the U.S. and Canada.
Pena-O’Sullivan said any type of federal spending requires businesses to pay their contractors and laborers appropriate wages based on the location of the project. Wages based on location are outlined by the Department of Labor, in accordance with the Davis-Bacon Act.
“When you have a floor on your wages and requirements, it enables union contractors to compete and get the work,” Pena-O’Sullivan said. “So they’re not competing with contractors that are trying to push wages down and pay people as little as possible.”
On top of wage requirements, union workers stand to benefit across all industries based on the influx of jobs created from infrastructure projects.
“Regardless of whatever is in the text or not, it’s certainly going to help unionized workers in areas with high levels of union density, the Northeast, California, the Midwest,” Samuelson said.
The bill allocates $39 billion to improvements in public transit and another $66 billion to modernize and expand passenger and freight rail. Samuelson said all union workers will benefit from investments in the public transportation industry, from Miami to Houston, up north in Pennsylvania and throughout the South.
Beyond geography, Samuelson said the public transportation industry has one of the highest unionized workforces, and other projects are within industries that feature high union concentration.
In 2020, there were 7.1 million union workers in the private sector and 7.2 million in the public sector, according to the Bureau of Labor Statistics. Out of the 7.1 million union workers in the private sector, 20.6% work in the utility industry, 17% work in transportation and warehousing, and 14.3% work in telecommunications.
“Modernizing infrastructure creates jobs, and many of them are going to be union,” said Ed Mortimer, vice president of transportation and infrastructure at the U.S. Chamber of Commerce. “These are good-paying jobs that help American families.”
Revitalizing Main Street America
On top of roads, bridges and public transportation, the infrastructure bill provides an additional $65 billion for broadband, $73 billion for power infrastructure and $21 billion for environmental clean-up, which presents revitalization prospects to small businesses in local communities.
“Our infrastructure is crumbling,” said Kriss Marion, owner of Circle M Market Farm, a local farm in Blanchardville, Wisconsin. “Our roads, bridges, in some cases our water treatment facilities, our pipes. We’ve been suffering from a chronic lack of investment for so long.”
She said the infrastructure bill provides hope to local communities that they can be driving forces in the economy, and in her community’s case specifically, improvements to roads and bridges will allow agriculture to move easier, and allows people to travel easier into town.
Broadband poses an even greater challenge, with 14% of households in Wisconsin not having access to the internet, Marion said. The prospect of increasing broadband infrastructure throughout 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.
Improvements to broadband infrastructure can save small businesses as the economy shifts to online services and shopping, said Sarah Crozier, spokeswoman for the Main Street Alliance, a small business advocacy organization.
“It’s going to be important for small businesses to have access to investments in broadband to be able to compete across the country,” Crozier said. “So we’re not just relying on massive online monopolies.”
But Crozier said there is one criticism that needs to be levied against the bill: to get bipartisan agreement on the package, many of the “human infrastructure” ideas that had been championed by progressives were put off for a later date and separate legislative effort, and many remain concerned about the fate of this part of the infrastructure spending.
“Those gaps need to be covered through the reconciliation package, particularly around the other bridges and roads that allow people to work, which are child care and health care,” Crozier said.
Leaders in Congress, Senate Majority Leader Chuck Schumer and House of Representatives Speaker Nancy Pelosi, want to pass the infrastructure bill along with a $3.5 trillion reconciliation package, which will invest in child care, paid leave, education and efforts to combat climate change.