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.

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.