The wage gap that threatens Biden’s climate plan
Biden himself gets that, said Jason Walsh, executive director of the BlueGreen Alliance, an organization of trade unions and environmental groups that work together on environmental issues. He said Biden understands the value of the labor movement in moving to a clean energy economy and highlighted proposals in Biden’s infrastructure plan unveiled last week to improve the quality of clean energy jobs.
“I think his understanding of work extends to knowing intuitively that one cannot expect workers and their representatives to embrace this transformation when they can no longer get jobs that pay family-supporting wages and benefits and have a career.” Walsh. “The reality is that this transformation is creating so much work that it is just imperative that we achieve the right quality for the work.”
Energy workers, by and large, earn more than the typical American, but the highest-paying positions are heavily geared towards workers in the nuclear, utility, natural gas and coal industries, according to the new data. The wind, solar and construction jobs that would increase under Biden’s policy were well below that on the middle wage scale.
“The big message is that the energy industry has a significantly higher average wage than the economy as a whole. This is very important,” Moniz, who headed the energy department during former President Barack Obama’s second term, told POLITICO. Still, he admitted, “There is clearly a distribution of wages – as in any other sector – based on the level at which specific skills are required.”
The then Energy Secretary Ernest Moniz briefed reporters in 2015 in the Brady Press Briefing Room at the White House Chip Somodevilla / Getty Images
Working groups are already getting nervous that Biden’s plan will eliminate the kind of permanent fixed-site jobs provided by coal mines or fossil fuel power plants and instead lead to temporary construction that requires mobility. A second concern is that wind farms, solar systems, and other climate-friendly energy sources require few workers to maintain and keep them up and running.
The prospect that workers would also earn significantly less can only add to the challenges the Democrats face in convincing voters that their climate strategy is also an employment strategy.
“For people in the fossil fuel sector, the prospect of moving to the clean energy sector is not attractive when they have to cut wages,” said Brad Markell, executive director of the AFL-CIO Industrial Union Council.
Markell added that the Biden administration’s plan, unveiled last week, contains the elements to address the issue, including support for the Law to Protect the Right to Organize and Stricter Labor Standards with the renewal of tax credits for clean Energy connected.
The bright spots: The average hourly wage of all US energy workers is $ 25.60 – 34 percent higher than the national average hourly wage of $ 19.14, according to Moniz’s Energy Futures Initiative. While the energy sector has suffered from the Covid-19 pandemic, it has lost fewer jobs than other parts of the economy.
According to the report, utility workers with an average hourly wage of $ 41.08 an hour, which would come to nearly $ 85,500 per year, were the highest paid in the energy industry, while mining and fossil fuel workers were the highest paid workers at $ 36.32 per hour or more followed over a year at USD 75,500. The high concentration of utility jobs in the areas of power generation and transmission, distribution and storage also means that employees in these positions earn above-average wages.
Energy-related construction jobs that would get a significant boost as part of Biden’s plans to modernize the power grid for new wind and solar power plants pay about $ 25.53 an hour, or just over $ 53,000 a year. Construction contracts earned an average wage of $ 23.02, or nearly $ 48,000 per year.
The new data is an addition to the annual U.S. Energy and Employment Report previously released by the Department of Energy but forfeited under the Trump administration. Moniz’s Energy Futures Initiative continued to work on this report in collaboration with the National Association of State Energy Officials and the BW Research Partnership. It provides employment data for the areas of energy, energy efficiency and automobiles.
The new reports show the tension between the two goals that the Biden administration has pursued as part of a clean energy transition: tackling climate change and creating a highly paid clean energy workforce.
“There are people who are ‘climate at any cost’ at any cost and there are people who are ‘workers / existing jobs’ at any cost,” said Phil Jordan, vice president of BW Research Partnership who conducted the research. “I think there is a balance between and politics really has to reflect it.”
Jordan pointed to the difficulty of comparing wages across energy technology sectors due to factors such as accessibility, skill and educational requirements, and geographical distribution. Jobs that are paid significantly higher than the national average are also likely to require more experience, education, training and certification.
Workers in the nuclear industry were paid an average hourly wage of $ 39.19, which is $ 81,515 per year – more than double the national median, even though the industry accounts for less than 1 percent of total energy jobs. Nuclear workers typically need training and other requirements to increase their profitability. However, they are facing a series of nuclear power plant closures. Five nuclear reactors are due to be closed this year.
Shutting down nuclear power plants could also jeopardize U.S. efforts to combat climate change, Moniz said. “Without the continuation of the nuclear fleet, our CO2 targets will be all the more difficult as nuclear power remains the highest CO2-free power source,” he said.
According to the report, energy efficiency workers, including those involved in building efficiency improvements such as weathering, accounted for 28.4 percent of total energy employment in 2019. But workers in this sector had an average wage of $ 24.44 an hour – significantly lower than the nuclear workers and nearly $ 6 less an hour than the natural gas workers, who made $ 30.33. The fast-growing renewable energy sectors, solar and wind, also had average wages that were below those of workers for fossil fuels: $ 24.48 for solar and $ 25.95 for wind.
Jobs in the oil industry earned an average hourly wage of $ 26.59 while they accounted for 10 percent of the total energy workforce in 2019. Coal, which made up just 2.2 percent of the workforce, had an hourly wage of $ 28.69.
Moniz suggested that fossil fuel workers will often be able to find new jobs without moving. This is in line with current Energy Minister Jennifer Granholm, who has advocated “location-based” solutions for job losses in fossil fuels. Granholm also said Biden’s plan would focus on creating manufacturing jobs to develop supply chains for producing wind, solar and new batteries in the US rather than relying on imports.
“The really important message for fossil fuel workers is that we are not going to leave anyone behind,” Granholm said on SiriusXM radio last week.
The sheer scope of the Biden government’s clean energy plans requires jobs to be created in a variety of industries, including construction, grid modernization, and demand-response companies, all of which are cutting energy bills by shifting electricity usage. That creates a potential for a labor shortage, Jordan said.
In fact, a previous US energy and employment report showed that energy companies were struggling to fill construction jobs even before the pandemic broke out. 83 percent of employers said it was a little difficult or very difficult to hire. At least for the moment, the job market in the construction industry seems to be slacking off somewhat. Last week’s monthly employment report by the Bureau of Labor Statistics shows employment in total construction is 182,000 below February 2020 levels.
Without a concrete way forward, US plans to create millions of new jobs in construction could directly run into a shortage of energy-trained workers, according to Jordan.
“What can a power line construction company do?” Said Jordan. “When they have 1,000 jobs to fill, and everyone who sends them resumes or applications has been a dishwasher, housekeeper, or retail salesman, they can’t just show up at a job and run cables.”