Data centers are a rapidly growing and essential part of the country’s basic infrastructure. A country that wants to lead in artificial intelligence, cybersecurity and digital innovation cannot treat large-scale computing capacity as optional.
But communities shouldn’t confuse national importance with automatic local benefit. The right question isn’t whether data centers should be built but on what terms states and communities should welcome them.
Data centers bring enormous capital investment, expanding the tax base and creating a burst of construction work. But they’re not large long-term job machines. Virginia’s experience shows that while the industry can generate large economic benefits, most employment impact is from construction rather than ongoing operations.
That doesn’t make construction jobs unimportant, but public officials should describe them honestly. Construction jobs in site preparation, electrical work, HVAC, pipefitting, fiber, controls and backup power systems are good ones. Permanent jobs in data center operations, network support, facilities maintenance, cybersecurity and site management are also good jobs. But while a data center may resemble a large factory, its impact on permanent employment will be minimal.
The better workforce question is whether these projects create career pathways. Data centers can be part of a broader opportunity system if linked to apprenticeships, community colleges, technical schools, high schools, labor organizations and local workforce boards. The most promising jobs story may lie not only inside the facility but around it, with electricians, HVAC technicians, fiber installers, controls specialists, facilities workers and infrastructure technicians.
The Burning Glass Institute calls these “launchpad jobs,” providing workers with career growth and promotion potential while teaching them a mix of foundational and technical skills applicable across many industries. Launchpad jobs “make up a relatively high share of occupations in industries that skew toward technical work,” according to Burning Glass. “Maintenance and manufacturing jobs stand out, such as electrical engineering technicians. Utility-related jobs are also common, including power plant operators.”
The right civic stance is neither blanket opposition nor unconditional welcome. It’s a conditional yes, with a civic compact based on five principles:
First, communities need a clear picture of what the “jobs deal” really means. Developers and public officials should separate short-term construction jobs from permanent jobs. They should disclose the expected payroll, tax breaks, public subsidies, infrastructure costs and net revenue communities can expect. Incentives should be tied to payroll and wage standards, not inflated job counts. Ohio’s payroll-based approach offers a useful model, linking eligibility for data center tax benefits to both investment and payroll, not simply a jobs announcement.
Second, communities need workforce pathways, not just job announcements. If companies receive tax breaks or other public support, they should help train local workers. A data center compact should ask not only “how many jobs?” but “what skills will local workers gain, and where can those skills take them?”
Third, communities need a clear rule that data centers will pay their own way. Data centers require enormous amounts of electricity. Berkeley Lab estimates that data centers used about 4.4 percent of total U.S. electricity consumption in 2023 and could consume between 6.7 percent and 12 percent by 2028. If new transmission lines, substations or grid upgrades are needed, the public should know who pays. Households and small businesses should not quietly subsidize hyperscale computing through higher utility bills.
Fourth, communities need clear rules and information on local impacts. Cooling methods, water and electricity use, backup generators, noise, land use, and emergency plans should be public information. In places where water is scarce, stronger standards should apply. Data centers should meet efficiency standards and explain how their energy use fits with state and local clean-energy goals.
Fifth, communities need transparency and enforcement. Data center negotiations shouldn’t be hidden behind nondisclosure agreements. Project terms, tax benefits, job projections, power agreements and water-use plans should be available for public review. If companies fail to meet investment, payroll, workforce or environmental commitments, communities should recover public benefits.
The U.S. needs data centers. The AI economy, the cloud economy and much of modern life depend on them. But communities don’t need to accept every project on whatever terms developers offer. Nor should they reject essential infrastructure out of fear.
The better answer is a civic compact where data centers get access to land, power, public infrastructure and sometimes tax incentives. Communities get ratepayer protection, environmental safeguards, honest job claims, workforce pathways, transparency and enforceable commitments.
This is pro-public value and a bargain worth making.
Bruno V. Manno is a senior adviser at the Progressive Policy Institute and a former U.S. assistant secretary of education for policy. He can be reached on LinkedIn.
Governing's opinion columns reflect the views of their authors and not necessarily those of Governing's editors or management.
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