Good Paying Jobs And Revitalized U.S. Manufacturing

The Anti-Inflation Act isn’t just historic climate policy, it’s historic employment policy, which the Blue Green Alliance says can create an estimated 9 million jobs over the next decade. But what kind of jobs are these supposed to be?

Also Read :  Infrastructure Investment and Jobs Act: DOI | Faegre Drinker Biddle & Reath LLP

For the first time ever, Congress is using clean energy tax incentives to not only create more jobs, but to ensure those jobs meet high labor standards and enable a just transition for fossil fuel workers. This legislation also represents the country’s most significant investment in clean manufacturing – using taxpayers’ money to fuel 21st century growthSt Clean energy jobs in the US

Also Read :  Government Forever Jobs Rarely Lay Off or Fire

The US is finally acting to solve the climate crisis by passing the IRA. But not only does the law aim to reduce harmful emissions, it aims to create communities where working families can thrive.

The Decline of American Manufacturing Jobs

The past four decades have been tough for the American workforce. Since 1979, the US has lost nearly 7 million manufacturing jobs, mostly in the Midwest, and in some cases once thriving cities have been decimated. The loss of high-paying manufacturing jobs meant that the pandemic-induced recession and rising prices hit working Americans hardest.

Wages have stagnated while economic growth has disproportionately benefited top earners, while the federal minimum wage has lost 21% of its purchasing power since 2009. And stagnant wages have been matched by a steady decline in union membership. In 1955 about 35% of the US workforce was unionized, today it is only about 10%.

Many of these working families bear a disproportionate burden of harmful fossil fuel pollution. The country’s remaining coal-fired power plants are concentrated in former manufacturing regions like the Midwest, while polluting highways have been built in low-income black communities. These cities and neighborhoods are more likely to experience asthma and other adverse effects, including more lost workdays and premature deaths.

Boom in renewable energies – and a boon for workers

The transition to a clean energy economy is a tremendous, unique opportunity to reinvest in America’s workers and nurture thriving communities. Building a clean manufacturing sector that doesn’t pollute our air or water can also create high-paying jobs that serve as a gateway into the middle class.

The IRA was deliberately designed to do just that: “The importance of this legislative win for working families cannot be underestimated,” said Illinois AFL-CIO’s Pat Devaney. “This new stimulus will tip the scales and help us manage the climate crisis as we begin to reverse decades of wage stagnation and rising racial inequality.”

Energy Innovation estimates that the clean energy IRA tax credits alone could add 1,053 gigawatts of new solar and wind capacity by 2030, or about 2.5 times our current wind and solar resources. It turns out that installing millions of new collectors and turbines will create millions of new jobs — but unlike previous tax credit structures, these credits are deliberately designed to create new careers in regions that need them most.

The IRA’s tax credit provisions create a tremendous financial incentive for developers to meet high labor standards. Renewable energy project developers receive a property tax credit for installing or producing renewable energy, 6% for the investment tax credit (ITC) and 0.5 cents per kilowatt hour for the production tax credit (PTC). However, if applicable wage and training standards are met, the credit quintuples, up to 30% for the ITC and 2.5 cents per kilowatt hour for the PTC.

High labor standards in road transport

Current wage laws ensure workers are paid a fair wage for their work and are set by collecting established local wages for skilled workers, often the result of collective bargaining. Requiring prevailing wages for projects prevents unfair bidding advantages for employers who underpay their workers and avoids a race to the bottom.

Those requirements have been tied to direct federal spending since 1931, but this is the first time they’ve been linked to clean energy tax credits. Research shows that prevailing wage standards keep workers earning middle incomes.

To earn the bonus credit, developers must also ensure that 10% of a project’s workforce is enrolled in an apprenticeship program, which will increase to 15% by 2024. Applicable wage and training regulations are complementary – because employers pay qualified wages, they hire for the skills they pay for and stimulate a virtuous cycle that fosters a well-paid, trained workforce.

Apprenticeships train the workforce needed to build the clean economy and open the way into the middle class for people who either cannot afford to remain unemployed for years or cannot afford college tuition. Apprenticeships allow workers to “earn while you learn” and provide on-the-job training for careers that offer higher earnings over their working life – the U.S. Department of Labor reports that 93% of apprentices retain and earn their jobs after completing their apprenticeship average starting salary of $77,000.

Justice for fossil dependent workers and communities

There are also bonus credits for job creation in the parts of the country that most need this influx of new, family-supporting careers. An additional 10% loan is available for the development of clean energy projects in coal- or other fossil-fuel dependent communities, offering the opportunity to either revitalize areas where jobs have already been lost or facilitate a smoother transition to jobs in others to ensure clean energy.

An additional 10% bonus credit is available for construction projects below 5 megawatts in communities with a significant proportion of the population below the poverty line, or 20% for projects built on low-income housing. These bonus credits will spur job growth in historically marginalized communities, immediately help clean the air and mitigate higher energy bills.

PTC and ITC include an additional 10% bonus credit for projects using indigenous materials to meet growing market demand for new clean technologies like offshore wind turbines, while boosting traditional American manufacturing for components like iron and steel. These bonuses add up to a whopping 50% towards clean energy development that supports quality work in the neighborhoods, communities, and cities that need it most.

American manufacturing revival and retooling

The IRA is investing a record $50 billion to build a 21stSt th century in the US clean energy manufacturing industry and supply chain, creating quality jobs for a whole new generation of Americans and ensuring competitiveness in the exploding global clean technology market.

The law provides $10 billion in clean manufacturing investment (48C) tax credits to build or expand manufacturing facilities that produce solar, wind, battery, electric vehicle, energy efficiency and other clean technologies. Four billion of those tax credits will be set aside for facilities in existing energy communities and help prioritize a just transition for workers and their families who work with fossil fuels.

With this tax credit, devices that achieve at least a 20 percent reduction in greenhouse gas emissions can be installed for the first time. And a separate, unique grant program provides an additional $6 billion to help energy-intensive industrial plants reduce their emissions.

The new EV tax credits are also expected to boost domestic EV manufacturing and a whole new supply chain. Only American-made passenger vehicles qualify for the $7,500 credit, while 50% of battery components must be manufactured or assembled in North America by 2028. The auto industry is already responding to those signals — Honda and LG have announced plans to build a new $4.4 billion battery plant in the US, most likely Ohio, and a Chinese company is planning a new $3.6 billion plant , which will create 2,000 jobs in Michigan.

In addition, the IRA includes loans and grants to build or convert American factories to manufacture electric vehicles and batteries, including $3 billion in loans to build or convert factories to manufacture electric vehicles and their components, and an additional $2 billion Grants to retool endangered or recently closed auto plants and preserve good manufacturing jobs that would otherwise be lost.

The better future for workers and the climate starts now

From the Sunrise movement’s Green New Deal to President Biden’s American Jobs Plan, the climate discussion has shifted from a focus on environmental protection to economic transformation. The IRA’s existence proves that climate solutions can create high-paying jobs and justice for pollution-stressed communities.

Declining clean technology costs and booming demand for clean energy means an opportunity to restructure our economy and eliminate polluting infrastructure to foster healthy neighborhoods where all children have a chance at rewarding careers. “Laws like the Inflation Reduction Act prove,” Devaney said, “that we don’t have to choose between creating good jobs and fighting climate change. We can do both.”