by Betony Jones, Director, Office of Energy Jobs, U.S. Department of Energy
On Labor Day, we recognize the American labor movement and the contributions of working people toward the prosperity and well-being of our country. Unions gave us the weekend, the 40-hour workweek, and, as President Biden says, unions built the middle class. Now, through the Inflation Reduction Act (IRA), Congress and President Biden are acknowledging the critical role of workers in building us a low-carbon future—because for the first time ever, labor standards are attached to tax credits. By basing new tax credits on good wages and career-track training, the well-being of workers will be baked into the foundation of the new clean energy economy. By ensuring broadly shared prosperity from these historic climate investments we can—and will—defeat the climate crisis.
President Biden has made game changing incentives available for companies to produce and invest in clean energy projects and infrastructure in the United States. But that’s not all—those incentives quintuple in value if those companies also agree to strong labor standards for their workers. This means we’re not just accelerating clean energy deployment, and we’re not just creating jobs—we’re creating good-paying jobs with good benefits that can launch families into the middle class. Credits like these will help accelerate the American clean energy economy; companies that want to scale production (and profits) fast are already taking advantage of the base credits, and any company that wants to be an industry leader isn’t going to say no to five times more.
It wasn’t always like this. In 2000, I was an intern at the White House working in the Office of Science and Technology Policy. At the time, I believed in the power of policy to drive down emissions and fight the climate crisis, but the global conversations around climate change were chaotic and support for federal climate policy was lacking here in Washington. I had a realization that to build the political will to address the looming climate crisis, the solutions would have to create sound investment opportunities, good jobs, and broadly shared and equitable economic prosperity.
Before I returned to DC to work in the Biden Administration, I spent 20 years working toward that vision at the state and local level. States where workers saw their future in a low carbon economy adopted stronger climate policy and built more renewable energy projects. Cities that built climate action plans around equity and good jobs garnered more public support and funding for climate solutions. Since 2000, a lot has changed, but my belief that a strong working class is the key to fighting the climate crisis has only grown stronger.
With the new prevailing wage and apprenticeship bonus credits in the IRA:
- Laborers and mechanics will get paid “prevailing wages,” which are geographically- and occupationally-specific pay and benefits that have been determined by the Department of Labor to ensure that workers employed on projects receiving federal investments earn middle class incomes.
- Companies will work alongside unions and other workforce partners to provide registered apprenticeship opportunities. Registered apprenticeship programs allow workers to earn-while-they-learn and provide pathways to good, middle-class, family-supporting jobs, bringing opportunities like home ownership back into reach for young people and families. For Equal Pay Day last year, I spoke to two women who were each able to purchase their first homes as apprentices with the SMART union that represents sheet metal workers. The national average salary for workers who complete a registered apprenticeship is $72,000 plus benefits in their first year after graduating and, over their career, workers who complete an apprenticeship earn $300,000 more than workers who do not. Registered apprenticeships can also be a pathway for equity and ensuring diverse populations and underrepresented communities have access to high-quality training and career pathways.
The IRA has set us up to do big things— new DOE analysis shows that the IRA (combined with its predecessor, the Bipartisan Infrastructure Law) are positioning the U.S. to meet or even exceed some of its most ambitious climate goals, including reducing U.S. net greenhouse gas emissions 40% below 2005 levels and doubling the share of American electricity generated by clean sources to 80% by 2030. Workers are the key to building our clean energy future, and by investing in the next generation of electricians, laborers, operating engineers, ironworkers, construction workers and more, we’ll be thanking the American labor movement not only for the weekend, but for maintaining a stable climate and a livable planet.