In a past article in The Monitor, we touched on some of the good and the bad that can occur with multi-million-dollar, out-of-state solar developers. The good: St. Joseph County officials took steps to ensure that 75% of the workforce would be local labor and that project materials and supplies would be purchased from qualified vendors from the area. The bad: Mammoth Solar, who is developing a $1.5 billion-dollar solar project in Starke County, where the developer utilized a global hiring agency to recruit out-of-state workers and the unknown problems that can accompany these workers.
The clean energy sector is expected to be a large job creator in the future. A study, Building Good Local Jobs on Utility-Scale Clean Energy Projects in Wisconsin: The Impact of High-Road Labor and Contracting Standards, published by the Midwest Economic Policy Institute (MEPI) in 2022 found that a community may not capitalize on these clean energy projects if they are awarded to non-local workers. The study finds that every $1 billion invested in clean energy creates $1.63 billion in economic activity and $153 million in state and local tax revenues.
So, what is the relevance of a local workforce? And how does that benefit our local communities and economy? Hiring a local workforce is very important to our local economy, especially in the case of solar developments where the work is a one-time event. The promised high-quality jobs created during the construction of the solar project are over when the project is complete. Some solar developers will tout the millions or billions of dollars invested in their project, promising hundreds upon hundreds of jobs. However, in reality, developers can be vague about hiring local workers and do not need to sign any commitment or agreement to do so. Some developers intend to utilize out-of-state workers from the very beginning and know these workers will follow the developer to other jobsites in other states.
The local economy and community can benefit if a local workforce is used on these projects. While some money is retained in the local economy from out-of-state workers due to food and lodging during their stay, most of their income will not be spent locally. Generally, out-of-state workers will spend their income when they return home to the state in which they live. On the other hand, local workers spend a much higher percentage of their income in the surrounding area. These workers tend to spend more at local restaurants and stores and contribute more to state and local taxes due to living and working in the same community.
Numerous economic studies reinforce the benefits of hiring local workers on public and private construction. In addition to the MEPI report, a 2021 report by Forward Analytics, Capturing the Sun: The Economic Benefits of Using Local Workers on Wisconsin Solar Projects, found that using local workers creates between 73% and 158% more economic activity than using out-of-state workers. Because local workers live in the same community in which they work, they spend more on sales and property taxes and spend more on good such as vehicles, groceries, housing, healthcare, entertainment, and food.
Local communities can take steps to ensure a local workforce is utilized. Enacting a Responsible Bidder Ordinance with local business preference language is one measure a local government body can take to create local jobs and support the local economy. The bottom line is that it doesn’t matter whether it’s a multi-million dollar solar development or the demolition of a local structure, when a local workforce is hired it is the local workers, local families, local communities, and local economies who all benefit and are the winners.
From the Spring/Summer 2023 Issue of The Monitor.