By Deputy Secretary of the Treasury Wally Adeyemo
Over Labor Day weekend, you probably heard people rightfully thank labor unions for many of the things we now take for granted – the 8-hour workday, workplace safety standards, and weekends themselves. That’s because when unions succeed in organizing and fighting for their workers, all workers are better off. And those benefits don’t just extend to workers themselves, but to their communities and generations to come.
President Joe Biden and vice president Kamala Harris understand the important ways unions strengthen America; it’s why they set out to be the most pro-union administration in American history. As part of that goal, they have made sure that the historic investments made under this administration – from clean energy sectors to semiconductors to infrastructure projects – create good jobs and opportunity for American workers, and we’re already seeing the payoff.
Republicans are threatening to repeal one of the most powerful tools we have to increase pay for workers – the prevailing wage and apprenticeship requirements included in the Inflation Reduction Act (IRA).
The law provides federal resources that have jumpstarted more than $336 billion in private clean energy investment in America across more than 1,600 projects. And through the prevailing wage and apprenticeship requirements, we’ve provided incentives for companies to create jobs with standards and wages that give workers a real path to the middle class.
Prevailing wage and apprenticeship requirements allow clean energy developers to get additional tax credits if they pay their workers good wages and use apprentices from registered programs. Such requirements have existed in federal contracts for more than a century, but the IRA law is expanding these incentives that boost the pay of workers to wind, solar, nuclear, hydrogen, and other clean energy technologies.
For industry, it’s good business to take advantage of these credits. Research has demonstrated that prevailing wage requirements don’t raise construction costs because higher wages attract a well-trained workforce, increase worker productivity, reduce turnover, and generate higher-quality work. And for workers, the benefits are obvious -clean energy jobs will be good-paying jobs.
Recent analysis found that companies have already announced or broke ground on clean energy projects that will create more than 300,000 new clean energy jobs for electricians, construction workers, technicians, support staff, and more. Thanks to our incentives, many of these jobs will pay prevailing wages.
Raising wages to the prevailing wage will be meaningful for workers across the country. In the Las Vegas area, there were over 40,000 workers in some of the largest construction-related occupations that earned less than the prevailing wage in 2022. All else equal, those workers would earn about $33,000 more a year if they earned the prevailing wage for their occupation.
And while raising wages is a crucial part of this work, the apprenticeship requirement is just as important – ensuring we have a strong pipeline of talent to build our clean energy future. Earlier this summer, I visited the Sheet Metal Workers’ Local 19 in Philadelphia and got to see their apprenticeship program firsthand. I met with members who are learning new skills to build the infrastructure and clean energy projects of the future while also gaining newfound financial security they had before only dreamed of. As one apprentice put it, these kinds of programs give workers the respect they deserve, provide a sense of purpose, and equip them with skills that they can put to use for years to come.
The transition to a clean energy economy may well be the single greatest economic opportunity of the 21st century. But the benefits of the clean energy future we are working hard to build – one that lowers costs for families, strengthens our national energy security, and sustains today’s manufacturing boom – must be shared equitably between industry and workers and communities.
Republicans in Congress continue to call for the repeal of the IRA and prevailing wage provisions, but the president and vice president remain committed to fighting to keep these rules in place because they believe that workers should make a living wage while building the clean energy economy. All our futures will be stronger for it.
- Source: US Department of the Treasury, Office of Public Affairs
