A bill recently reintroduced to Michigan’s state legislature could outlaw community benefits agreements (CBAs) throughout the state, halting the procedure’s progress for low-wage workers at Detriot’s doorstep.
House Bill 4052 would prohibit local governments from accepting any community benefits ordinance that would impose a mandatory amount of wages or benefits on businesses as a condition for developing a piece of land or receiving special tax breaks, exactly the purpose of CBAs. After Michigan — once the bastion of America’s union strength — passed Right to Work legislation in 2012, this bill would take another step to limit worker representation in economic development.
The bill comes in the wake of a proposal, now being studied by a Detroit City Council subcommittee, which would require developers who receive incentives for projects to negotiate CBAs with residential groups. The potential city ordinance championed by the Equitable Detroit Coalition would be the first of its kind in terms of mandating CBAs on large development projects. But GOP Rep. Earl Poleski, who is sponsoring the bill, believes CBAs force average citizens to pay twice to attract businesses, beyond the tax abatement, because only some benefit from “special deals.” He would prefer to rely on existing tax laws and keep new agreements and ordinances out of public land development.
And he is not out of step with some of Michigan’s economic officials. Michael Finney, senior adviser on economic growth for Gov. Rick Snyder, and Rodrick Miller, president and CEO of the Detroit Economic Growth Corp., recently voiced their opposition to CBAs. Miller complained that it would add a layer of bureaucracy to an already complex development process, requiring developers to deal with “autonomous groups not responsible to anybody.”
CBAs usually involve community groups or coalitions negotiating a one-time benefit for a community as a part of a development project. The benefits that can be delivered by these agreements are nowhere near as powerful as those that unions can deliver, as unions return to the negotiation table with businesses on a regular basis and have a strong ability to enforce their contracts.
In an age of embattled unions, these agreements do hold some promise for low-wage workers. A December 2008 paper entitled “Community Benefits Agreements: Policy for the Twenty-First Century Economy,” published by The Mobility Agenda, a Washington, D.C.-based think tank, emphasized the potential of CBAs — given a broad coalition — to be a “powerful strategy for strengthening low-wage work and ensuring social inclusion” by allowing workers to exercise political voice.
CBAs have led to major victories for workers in cities like Pittsburgh, Atlanta, San Diego, and LA. The Los Angeles Alliance for a New Economy, or LAANE, successfully campaigned with community partners to make developers pay a living wage and hire employees from low-income neighborhoods and people who would be displaced when they sought to build a hotel and entertainment complex in downtown LA. LAANE found more success last October after a campaign to get hotel employees paid $15.37 an hour.
Detroit citizens would like to imitate LA’s gains, especially because many are increasingly suspect of their representatives’ commitment to average residents’ welfare as the city government tries to balance its budget. Looming large in residents’ minds is a $175-million tax break to Marathon Oil for an expanded refinery that delivered only 15 jobs for city residents as of 2014. More standardized CBAs could help ensure far more for workers in large development projects like Marathon’s, especially when poorly worded contracts might only require developers to “try” to offer jobs to locals.
Though international economic development seems out of citizens’ hands in an era of hyper-globalization, automation, and an indomitable Wall Street, community benefits agreements offer a small bright spot in which communities can secure some gains out of economic development that otherwise might not benefit them. But if state governments simply prohibit citizens from sitting down at the negotiation table while officials continue to cozy up to wealthy developers, working people will remain at the mercy of corporate interests.