On Nov. 28, the Los Angeles Metro transit agency will start looking over proposals to build up to 1,000 compressed natural gas-fed buses and 200 zero emission buses, in a major step toward bringing a more sustainable, environmentally friendly commute to the United States’ most populous county.
But another major victory is that these manufacturers will also be rewarded based on how significantly they create California jobs, particularly for disadvantaged communities, and reinvest in local manufacturing hubs instead of looking for cheaper places to build these vehicles offshore. In total, the projects could bring an estimated 4,500 jobs to the Los Angeles County area and other yet-to-be-determined cities that local transit jobs coalition Jobs to Move America says will play a vital role in the manufacturing and supply chains delivering them to Southern California.
The request for proposal takes policy language from what’s called the U.S. Employment Plan, a nationally heralded framework that encourages a certain percentage of new transportation-based manufacturing jobs in the U.S. go to American workers with backgrounds that have kept them out of the realm of gainful employment. The plan was put together by Jobs to Move America, with help from the Brookings Institution, University of Massachusetts, Amherst, and the University of Southern California.
Here’s how it works. L.A. Metro puts out a request for proposal (RFP) calling on vehicle manufacturers to bid on a project. Through the U.S. Employment Plan model, interested companies need to outline how much money they plan on spending on workforce development, how many U.S. jobs they plan on creating, how many workers from disadvantaged backgrounds they plan on hiring, and if they’re going to build new or refurbish existing manufacturing facilities in the U.S. to get the job done.
Depending on how robust their employment plans are, manufacturers then get to deduct percentages they spend on progressive hire and local investment plans from their overall bid price through the form of a points system, meaning their final offer is lower and more competitive in the eyes of LA Metro. (The price reduction is for bidding purposes only — it doesn’t actually mean the company gets a credit, or that the transit agency is agreeing to cover those costs.)
Vincent Louque is one worker who’s already benefited from LA Metro’s past use of the U.S. Employment Plan. The agency put it into play when it contracted with Japanese manufacturer Kinkisharyo to build a manufacturing hub in Palmdale, California, and construct 243 rail cars for a new line in Los Angeles.
After Louque was fired from his job at Apple in 2009, the 45-year-old decided to go back to school. He was able to pick up a few part-time gigs on the side as he worked toward getting an electrician’s degree, but his interviews for bigger, full-time jobs always met the same fate.
He remembers a strong interview he had with an HR rep that suddenly went south. “We were having a great conversation, and then they brought in three people from the department I was going to be working in,” he remembers. “Then she reads down further in my application and she says, ‘Oh, you have a felony.’”
“It was very apparent at that moment that she hadn’t read it before. I never heard anything back from them again,” he remembers.
One day shy of five years of unemployment, he landed a job with Kinkisharyo. Their plant in his hometown of Palmdale is the company’s first car shell manufacturing operation in the U.S.
“I was going to school, looking for work, couldn’t find anything regular, doing odd jobs here and there, but Kinkisharyo was one of the first companies that considered me,” says Louque.
Jobs to Move America has seen some major successes with the U.S. Employment Plan; Amtrak, the Chicago Transit Authority and New York’s Metropolitan Transportation Authority have all fielded RFPs using its language. But despite getting the support of U.S. Secretary of Transportation Anthony Foxx earlier this year, the private sector is still lukewarm when it comes to embracing the plan’s language as a whole.
On the one hand, the idea of having to invest a chunk of money into local workforce development programs is sometimes seen as a demand that they have to pay if they want to play. On top of costs, that means devoting space, workers and expertise to training locals with no guarantee that they’ll make the cut for employment — meaning the return on investment for these programs could run down into the negatives.
And that creates somewhat of a catch-22: Companies say they’re struggling with a worker drought in the U.S., as manufacturers fail to find enough qualified and willing workers to fill more advanced factory jobs in the U.S. Why, they wonder, should we invest in a struggling labor pool here when there’s already a willing, cheaper labor pool over in country X?
“They don’t feel like the U.S. is prepared,” says Erika Thi Patterson, a senior policy coordinator at Jobs to Move America. “But investing in [workforce training] doesn’t necessarily have to mean investing a lot more money.”
Patterson says that these beliefs are grounded in false perceptions. She notes that manufacturing companies who’ve submitted RFP bids to major agencies with U.S. Employment Plan language are generally offering some of the lower bids that these agencies come across, because of the point system it uses to favor more progressive local investment plans.
“We’re really trying to combat these myths because we feel it’s possible to prepare these workers, as long as you’re committing to a real pipeline,” says Patterson.
The Kinkisharyo project has created 404 jobs for workers in the Palmdale area, just outside of Los Angeles. They’re taking in an average of $21 an hour, while minimum wage at the factory runs around $17 an hour.
Louque says on top of a steady stream of employment, one of the major benefits the construction of a Kinkisharyo plant in Palmdale is that he and his coworkers no longer have to put up the gas and other transportation costs to get from their city to Los Angeles, about an hour and a half to the south.
“For a lot of the people out here, this is their first job where they’re not commuting back down to the valley,” he says. “The people that are being hired on are folks who didn’t have a lot of opportunities close to home, who had to travel.” But now that economic opportunity, free of discrimination, is just blocks down the road.
The Equity Factor is made possible with the support of the Surdna Foundation.