The auto industry strike is one facet of the mounting tension between the energy transition and workers who could lose their jobs.
Auto unions and US carmakers recently smoothed over a huge pothole on the road to electric vehicles, but workers are facing much bigger ruts ahead on the route to clean energy.
In the past week, the United Auto Workers labor union reached tentative agreements with Ford, Stellantis, and GM, paving the road to ending their weeks-long strikes at the three largest US automakers.
One of the major concerns for the union was the shift toward electric vehicles. Car companies like Ford are betting big on electrification as a tactic to meet their climate change targets, but the UAW is concerned that new EV plants and battery factories could be used to replace union jobs with a non-unionized, lower-paid workforce. “We have been absolutely clear that the switch to electric engine jobs, battery production and other EV manufacturing cannot become a race to the bottom,” said UAW President Shawn Fain over the summer in a statement. The union also worries that EV production may lead to fewer workers overall.
So far, the UAW has secured an agreement with GM to bring battery manufacturing under its auto contract, allowing the union to negotiate wages and benefits for workers building the lithium ion batteries that power electric cars. The tentative agreement with Ford allows the union to go on strike if plants close, giving workers leverage as production lines for older fossil-fuel-powered vehicles shut down.
“It lays a foundation for UAW members to be making electric vehicles under UAW contracts into the future, which is enormously exciting and good for workers, not just in the auto sector, but across the economy given the size of the sector,” said Jason Walsh, executive director of the BlueGreen Alliance, a partnership of labor and environmental groups.
However, more friction points are likely to emerge in the coming years across industries. The US has committed to becoming carbon-neutral by 2050. Meeting that target will require a handbrake turn in how the country makes electricity, heats homes, powers vehicles, and runs assembly lines. And to navigate this hairpin curve, the US needs a massive workforce to research, develop, build, install, and maintain the low-carbon technologies of the future.
At the same time, this transition will also require moving away from fossil fuels. The US energy sector employed 8.1 million people in 2022, according to the US Department of Energy. About 1.7 million jobs belonged to people working directly in coal, oil, and natural gas, while the Energy Department noted 3.1 million were employed in “clean” sectors including energy storage, efficiency, fuel cells, nuclear, and grid technologies. The auto industry is currently on both sides of this line, but eventually it will have to settle in the clean energy lane.
The government is already funding research and development, offering billions of dollars in grants, tax credits, and loan guarantees, and imposing regulations to spur this change. The Inflation Reduction Act included $400 billion to boost clean energy and address climate change. However, the UAW has criticized some of these programs for not securing wages and worker benefits.
For autoworkers, the fear is that their skills in milling engine blocks and assembling transmissions might not translate to winding electric motors or wiring high-voltage circuits. Or if they do get a job in a clean industry, they may not have the same salary and benefits, or be in the same city. Indeed, the history of workforce transitions bears this out. That’s why some unions have been hesitant to support clean energy initiatives in the past, fracturing the political coalition required to see this transition through over the coming decades.
So, the challenge is not just to build a cadre of clean energy workers, but to do so in a way that doesn’t leave mass unemployment, depopulated communities, or environmental damage in its wake. A report this month from the National Academies of Sciences, Engineering, and Medicine on the transition to clean energy warns “the existing safety net is ill-equipped to address the scale and scope of these impacts” and that “the nation as a whole lacks the trained workers needed to implement fairness, equity, justice, and public engagement provisions.”
“We know that the transition to a net-zero economy is going to have uneven impacts for the US workforce,” said Devashree Saha, director of the clean energy economy program at the World Resources Institute, who co-authored the report. “If we don’t pay attention to these societal dimensions of the energy transition, I think we are just going to create conditions that undermine the entire goal of decarbonization.”
The history of workforce transitions hasn’t been great for most workers
The transition toward clean energy has actually been underway for decades and has already borne fruit. Renewables like wind and solar are now the largest sources of new electricity capacity, and in some markets, they’re cheaper than running existing coal power plants. The share of electric cars among new vehicle purchases has tripled between 2020 and 2022.
The shift is reflected in the employment numbers, too. The Energy Department noted that clean energy jobs have outpaced overall employment, growing 3.9 percent from 2021 to 2022. Close to 90 percent of new jobs in power generation were in renewable energy.
But who is getting these jobs?
“Here we have a situation where we have a deliberate policy choice to wean our economy off of fossil fuels — great move, really important — and I wanted to understand what we can learn from past experiences,” said R. Jisung Park, an environmental and labor economist at the University of Pennsylvania.
In a working paper published over the summer, Park and his co-authors looked at employment data between 2005 and 2021, examining about 300 million job-to-job transitions. They found that there was a tenfold increase in the number of workers making the jump from “dirty,” meaning carbon-intensive work associated with fossil fuels, to “green” jobs associated with renewable energy or electrification. Yet while the transition is accelerating, less than 1 percent of employees leaving the carbon-intensive sector end up with a green job.
Drilling down into the numbers, the researchers also found that there was a lot of variation in switching to clean energy jobs in different parts of the country. There were differences within the workforce as well. Older workers, those with less formal education, and people unable to relocate to another city were less likely to find a clean energy job after leaving fossil fuels.
“When they move jobs, they tend to stay within the fossil fuel industry,” Park said.
There are likely several factors behind this, according to Park. A big one is that skills in fossil fuel-intensive jobs — drilling, mining, refining, and so on — are most valued in other companies doing similar tasks. Much of this training and experience doesn’t translate into jobs like installing solar panels or winding electric motors. Bridging that divide requires more training, which can be harder for older workers and employees who have fewer certifications and diplomas already under their belts.
The locations of clean and dirty jobs are not evenly distributed either. The places where wind turbines are going up are rarely in the places where fracking wells are shutting down. Moving to where the jobs are can be a significant barrier. It’s also unlikely that there will be a one-to-one replacement for every job lost in fossil fuels.
Still, there is likely to be huge demand for clean energy employment. Already, more people around the world work in clean energy than in fossil fuels. The International Energy Agency projected that the shift to low-emissions sources would create 14 million new jobs by 2050. It would also require 16 million roles to shift to cleaner duties.
So while there’s rising demand for people to build electric cars, construct solar farms, or upgrade insulation, it will take a concerted effort to help people working in coal power plants or building diesel trucks fill those vacancies.
How to cushion the blow of the clean energy transition
Of course, this isn’t the first time technology has reshaped the workforce. Automation has already been a huge disruptor across manufacturing, telecommunications, and many types of clerical work. It’s poised to lead to millions more lost jobs in the coming decade. One estimate found that automation could displace as many as 800 million jobs by 2030 around the world. The World Economic Forum estimated that the global economy will see a net loss of 14 million jobs, about 2 percent of total employment, over the next five years due to a multitude of factors, including automation.
But history doesn’t have to repeat itself here. The National Academies report on accelerating decarbonization makes several recommendations to smooth over the road to clean energy and to accelerate progress. “We really need a very comprehensive federal transition assistance program,” Saha said.
For people who lose their jobs in carbon-intensive industries, such a program would include provisions like extended unemployment insurance, education programs, and funding early retirements. It would also include wage support for laid-off workers who find new jobs but at lower salaries.
And to ensure there’s a stream of workers ready to install new high-voltage DC transmission lines, refine biofuels, and put in LEDs, the report recommends designing a K-12 curriculum to begin training people for these jobs. It also recommends deploying clean energy programs with a focus on disadvantaged communities that have faced discrimination, job losses, or pollution in the past.
The report highlights how decarbonizing the economy and mitigating climate change is not simply an issue of inventing new technology. It requires people who are willing and able to make the jump.
With careful planning, the US has an opportunity to head off future friction points, particularly for workers. Though the US climate target is in the middle of the century, the country needs to establish a coalition now to see this through. “If we are to maintain support over 30 years,” said Saha, “we need to make sure we are paying attention to issues of equity and energy justice.”