In an effort to bring down the stubbornly high unemployment rate, Mayor Antonio Villaraigosa is lobbying Washington officials to give local workers an advantage in winning some of the more than 166,000 jobs expected from transportation projects planned for the region.
Federal rules prohibit local hiring preferences on federally funded transportation projects, under the premise that all U.S. taxpayers help to pay for the work and should have an equal shot at getting the jobs. The rule also stems from concern that making local hiring a factor in awarding contracts will increase the cost of projects.
But with Washington jittery about unemployment heading into an election year, the mayor has received a positive signal from the administration. Hovering at 12%, California’s unemployment rate is the second highest in the nation, behind Nevada’s.
A U.S. Department of Transportation spokesman said the department was working with Congress to develop rules that “could encourage local hiring on large projects as long as quality demands and schedule constraints are met.”
Richard Katz, a mayoral appointee to the Metropolitan Transportation Authority board, traveled to Washington recently pitching Villaraigosa’s jobs initiative. “The president is going to be judged on lowering unemployment in the country,” he said.
“Unless we put people to work in California,” he added, “you can’t significantly lower the national unemployment rate.”
Villaraigosa contends that local officials should be able to require local hiring or purchasing programs or at least make them a consideration in awarding contracts where local taxpayers are picking up a larger share of the tab.
“If the MTA is paying for 70% of a project with non-federal funds, then we should have the option of hiring 70% of the workforce locally, and buying 70% of the goods or services needed locally as well,” he said in a letter to the transit board seeking its support for the initiative.
The mayor has gained support in Washington in his bid to secure federal aid to accelerate a dozen Los Angeles-area transit projects. Those projects are projected to create 166,000 jobs, but Katz said the mayor was seeking to boost local hiring for other projects as well.
Although that effort has won the support of business groups and labor unions, Villaraigosa could have his work cut out for him to overcome opposition to his new initiative.
“We think the best way to get publicly funded construction done is to have a free and open competition for the work,” said Brian Turmail of the Associated General Contractors of America, a construction industry trade group.
“It’s those sorts of preferences that drive up the cost of these public projects so much that often times you can’t get the project done, or it limits the amount of it that can be done,” added Rep. John Campbell (R-Irvine).
The mayor suggested that local hiring preferences could encourage communities to pick up a larger share of the costs of projects as Washington looks to trim the federal budget deficit.
The effort comes two years after a Villaraigosa-backed plan to get a rail car manufacturing plant built in Los Angeles fell apart when an Italian manufacturer failed to come to terms with the MTA on a contract.
“It really galvanized the issue for us,” Katz said. “We were spending hundreds of millions and couldn’t do anything about local jobs. … So the rail cars will be built in Sacramento. Or Canada. Or Japan. … But I can’t say to them, ‘We’ll give you higher points in your bid to get this contract if you build that factory in Los Angeles.’ ”
The mayor is seeking federal legislation to give local authorities latitude to draft their own rules, whether it be awarding a contract to a bidder who pledges to hire the most local workers, even if their bid is higher, or requiring that companies employ a certain number of local workers and buy a percentage of their materials locally.
Los Angeles and other cities have moved to keep more city business at home. The Los Angeles City Council is expected to take up an ordinance soon that would give preference to local firms in bidding on city contracts, and Houston is considering a similar initiative dubbed Hire Houston First.
The agency overseeing the building of the Exposition Boulevard rail line extension from Culver City to Santa Monica is requiring that 30% of the work hours go to local residents.