With infrastructure spending talks at a stalemate in the Minnesota Legislature, building trade unions are pressing lawmakers to extend tax incentives for data center projects in hopes of jumpstarting union construction employment. The proposed exemptions, aimed at tech giants like Amazon and Meta, come as the broader economic climate challenges new development.

“There’s not a surplus of work right now,” said Richard Kolodziejski, government affairs director for the North Central States Regional Council of Carpenters.

Supporters argue that a single hyperscale data center can generate significant economic activity, with costs exceeding $1 billion—outpacing the $700 million infrastructure bonding bill under discussion. Tax breaks for data center construction, including exemptions for servers and software, are seen as a way to attract these investments and secure high-wage jobs.

The building trades emphasize that the projects would create thousands of construction roles and hundreds of permanent jobs. A 2022 Mangum Economics report, commissioned by industry groups, found that a $750 million facility could result in over 1,800 construction jobs and 300 ongoing operational positions.

“There’s a lot at stake for the trades if we don’t act,” said Tom Dicklich, executive director of the Minnesota State Building & Construction Trades Council. “I understand not wanting to give tax breaks to the wealthy, but those are the folks creating the jobs.”

However, the proposal is drawing sharp criticism from public sector unions. Groups like SEIU, AFSCME, Education Minnesota, MAPE, and the Inter Faculty Organization have come out against the expanded tax breaks. They cite rising costs associated with the current exemptions—projected to reach $219 million annually in lost sales tax revenue by FY2029—as a threat to funding for schools, health care facilities, and public services.

“It would be one thing, if the unions were upfront, that this bill is good for their members … Unfortunately, they want the rest of the Labor Movement to support their lobbying efforts and to call tax cuts for billionaires a ‘pro-labor’ bill. This we cannot do,” said SEIU Healthcare Minnesota & Iowa President Jamie Gulley in a message to union members.

Gulley also claimed the debate became so contentious that one trade union reportedly threatened to leave the AFL-CIO. The disagreement highlights a rare public rift among labor organizations, which traditionally maintain a united front despite divergent sectoral interests.

The bill in question, HF1277, goes beyond past exemptions by allowing upfront sales tax deductions instead of delayed rebates—limiting public transparency—and including electricity in the exemption.

Still, trade union leaders argue that the broader tax contributions from workers on these projects justify the policy.

“We don’t have line items in the state budget that goes directly to the building trades,” Dicklich said. “Where we can get work, we have to go after that.”

Meanwhile, Amazon has announced it is pausing plans for a major data center in Becker, Minnesota—raising the stakes for lawmakers debating the legislation.

Nonprofit Leader Charged with Felony Wage Theft

In a separate development, Bishop Harding Smith, who leads the violence prevention nonprofit Minnesota Acts Now, has been charged with felony wage theft and theft by swindle in Hennepin County. Prosecutors allege Smith withheld approximately $150,000 in wages due to workers on a county-funded contract.

“Bishop Harding Smith failed to pay his employees what he agreed to as part of the contract with Hennepin County and then lied about it when seeking payroll expense reimbursements,” said Hennepin County Attorney Mary Moriarty. “As I said when our office secured the state’s first wage theft conviction, this behavior will not be tolerated.”

Though Smith later admitted to underpaying workers, he denied any fraudulent intent. The case marks one of a small but growing number of felony wage theft prosecutions in Minnesota since the offense was classified as a felony in 2019.

Trump Changes Position on Nippon’s U.S. Steel Takeover

President Trump appears to have reversed his previous stance on Nippon Steel’s controversial bid to acquire U.S. Steel, a $14.1 billion deal he once opposed. Now back in the White House, Trump claimed on social media that the merger would create 70,000 jobs and preserve U.S. Steel’s headquarters in Pittsburgh under a “planned partnership.”

However, United Steelworkers President Dave McCall remains skeptical, noting, “Throughout recent months, as the public conversation has turned to Nippon ‘investing’ in U.S. Steel or ‘partnering with’ U.S. Steel, Nippon has maintained consistently that it would only invest in U.S. Steel’s facilities if it owned the company outright. We’ve seen nothing in the reporting over the past few days suggesting that Nippon has walked back from this position.”

Planned Parenthood Announces Layoffs, Clinic Closures

Federal funding cuts have forced Planned Parenthood North Central States to shutter eight clinics in Minnesota and Iowa, leading to 66 layoffs. The organization cited a $2.8 million freeze in Title X funding in Minnesota, ongoing legislative attacks on abortion access in Iowa, and Medicaid cuts as contributing factors.

“When I started 18 years ago, we had 17 clinics in Iowa. After these closures we will be down to two,” said Megan Amato, a longtime LPN in Iowa and Nebraska. “I am the only person who does my job in the whole state and I worry about what that means for the future of abortion care in Iowa.”

Although none of the Minnesota clinics slated to close offer abortion services, they provide essential reproductive care such as birth control and health education. The organization plans to increase investments in telemedicine services.

Federal Judge Upholds Nursing Home Workforce Board Authority

In a win for labor advocates, a federal court has upheld the authority of Minnesota’s new Nursing Home Workforce Standards Board to require time-and-a-half pay for workers on 11 holidays. Industry groups had sued to overturn the board’s mandates, which were established by the Legislature in 2023.

Global Jobs Outlook Dimmed by Trade War

The International Labour Organization has lowered its global employment growth forecast by 7 million jobs amid economic uncertainty driven by President Trump’s trade policies. The report attributes the drop to waning U.S. consumer demand and higher prices resulting from tariff policies. Trump’s “reciprocal” tariffs were reinstated by a federal appeals court this week after being briefly blocked.

The ILO also reported a drop in the global labor share of GDP—from 53% to 52.4%—equating to approximately $290 less in annual purchasing power per worker.

Originally reported by Max Nesterak in Minnesota Reformer.