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Report: To Make Federal Funds Work, Government Needs Labor

As federal money flows to state and local governments, a Deloitte report points out the workforce obstacles that could slow progress. Agencies need to start creating programs to fill those gaps now, the report argues.

As federal infrastructure money flows into state and local agencies, a lack of workforce talent could slow projects, according to a new analysis from Deloitte.

The report focuses on how agencies can best execute on the $2 trillion of federal investment coming their way via such laws as the Infrastructure Investment and Jobs Act (IIJA), the Creating Helpful Incentives to Produce Semiconductors and Science Act (CHIPS) and the Inflation Reduction Act (IRA).

“Together, these three new laws represent a massive investment in American competitiveness,” states the report. “They seek to rebuild American infrastructure, accelerate the transition to a green economy, and strengthen the domestic semiconductor industry — all while promoting job growth, workforce development and equity.”

But even as those recent federal laws — along with other programs designed to improve the technological base of governments throughout the U.S. — start making their impact felt, longer-term labor-related obstacles could mar progress, at least according to the Deloitte report.

Successful implementation of these laws will require access to skilled professionals,” the report stated. “State and local governments will need to develop, borrow or buy this talent.”

That alarm comes as other research details the digital nature of most new jobs today and as government technology suppliers, along with their clients, work to attract and retain professionals — tasks influenced by such factors as ongoing tech layoffs, retirements and the growth of cybersecurity.

In the report, Deloitte urges public leaders to make workforce investments as the federal money flows, and to work with universities and other organizations on staff development and finding contractors.

New York City provides an example of what such recommendations could mean in the real world. Earlier this year, Mayor Eric Adams announced an apprenticeship program push that would offer more training in such areas as computer programming and information technology.

Relatively traditional construction skills will remain in demand as the infrastructure funding works its way through the economy, the report states. But governments need to widen their vision and think about what they can do to encourage the development and use of professionals with other vital skills.

“Today’s infrastructure also encompasses elements such as renewables, Internet services, data management centers and data analytics,” the report reads. “Governments should identify the skills shortfalls that the industry may experience in the implementation of these programs and invest in innovative partnerships with government, industry, nonprofits and educational institutions to close those gaps.”