Leveraging Public Funding to Strengthen Worker Protections

Weeks into President Trump’s second term, everyday working people are already suffering the brunt of conservative attacks, from ICE raids and mass arrests to unlawful cuts to the federal workforce and the elimination of programs that expand and ensure equity of opportunity, bar discrimination, and reduce racial disparities. Most recently, the Trump administration has unleashed a broadside of attacks on federal workers and the agencies such as the National Labor Relations Board that protect them.

Unions are one of the most effective institutions for reducing racial and economic inequality, protecting immigrant communities, and building worker power. But American labor law is nearly a century old, and its strict limits on state and local policy changes have made it difficult to pass much-needed reforms. This has played a role in the steady decline of union membership over time, which just reached a new low.

But even while facing these daunting conditions, workers and communities can fight back and win if they choose their strategies wisely.

One powerful and underused approach is to leverage public funding to strengthen organizing protections. It’s even more important in this moment – with the Trump administration attempting to illegally freeze federal funding – to make sure every dollar spent at the state and local levels goes toward creating good jobs with a free and fair chance to join a union.

When state and local governments act as “market participants,” paying for a particular project or service (instead of acting as a “regulator” setting the rules for everyone), they can require higher labor standards from the recipients of that public funding. In other words, the government has a greater say over working conditions on a project when the government is paying for that project – and employers are more likely to play by the rules if they know their public funding depends on how they treat their workers.

The “market participant” exception comes with its own limitations. The Supreme Court has established that state and local governments can intervene in labor relations when they have a direct stake in the project. Different approaches to this are protected to varying degrees. Community benefits agreements are one option that provides flexibility for local government while still creating a strong enforcement mechanism for the labor and community groups that are signatories.

New Flyer, one of the nation’s largest electric bus manufacturers, won a $500 million procurement contract in 2013 with the Los Angeles Metro public transit authority. As part of the contract, New Flyer committed to creating 50 full-time positions that paid living wages. When a community and labor advocacy organization, Jobs to Move America, questioned whether the company was providing the jobs it had promised, it led to litigation and eventually a 2022 community benefits agreement (CBA) requiring enhanced company reporting to LA Metro and covering New Flyer’s manufacturing facilities in Alabama and California.

The CBA established hiring goals “of 45 percent of new hires and 20 percent of promotions at each facility of individuals from groups who have historically been underrepresented or underserved and have had limited access to good jobs in American manufacturing,” such as women, people of color, and veterans. It also committed New Flyer to a stronger process for handling complaints about harassment and discrimination, additional safety training, higher wages, new training opportunities, and protections against retaliation.

Most crucially for any union organizing effort, the CBA paved the way for an agreement that “required New Flyer to be neutral and voluntarily recognize unions with majority support.” New Flyer workers successfully formed their union in January 2024, and they ratified their first contract four months later. The new contract was ratified with the support of more than 99 percent of union members, and it included significant wage raises, cost-of-living increases, and improvements to retirement benefits.

Workers face an uphill battle for a union because of weak labor law protections, a task even more difficult in the anti-union South, with its long history of racism and economic exploitation. Why did these workers win where so many others have lost?

It has been widely recognized that the workers at the New Flyer plant in Alabama were able to unionize and win a strong contract because of the CBA negotiated in 2022 by Jobs to Move America. The public funding at the center of the agreement flowed from a large local government entity, LA Metro, and New Flyer risked losing that money – and future government contracts – if it did not respect workers’ basic rights.

The New Flyer example offers a clear lesson for organizers: Money talks, and employers listen to their workers much better when their public funding is on the line.

Communities and workers can take bold and immediate action at the state and local level to ensure public contracts lead to good jobs. Despite setbacks under the Trump administration, communities and workers have the power and the opportunity to drive change at the state and local levels. These local efforts can serve as engines of innovation, ensuring that public contracts create good jobs and strong communities for all.