In the coming decades, sales of electric vehicles (EVs) are likely to surpass those of gas-powered cars and trucks, transforming the U.S. auto industry and jobs in the auto industry. However, without effective policies, the transition to electric vehicles could reduce the quality of jobs in the automotive sector.
Thanks in large part to the efforts of union workers, many existing auto jobs pay decent wages and provide a route into the middle class, especially for Americans without college degrees. In contrastmany domestic electric vehicle manufacturers offer lower wages, fewer benefits and fewer opportunities for pay rises – with poorer working conditions for their employees.
As the auto industry evolves, it could continue to provide middle-class service jobs — if Congress takes enough action. What Congress does now will determine whether these are good jobs for the next generation of American auto workers.
An important step Congress must take is to create a new global electric vehicle wage policy to help the existing auto industry’s high labor standards transition to new EV jobs. For example, any budget reconciliation should ensure that companies that receive tax incentives to support the production of electric cars must pay the prevailing wages.
Applicable wage laws require that government-subsidized companies pay at least the basic hourly wage of wages and benefits paid to employees in a similar position. These laws ensure that government spending supports a well-qualified workforce and does not lower standards. They are common in government construction projects and for contracted government services, although they have not been used very often in manufacturing.
As Ray Curry, president of the United Automobile, Aerospace and Agricultural Implement Workers of America, explains“While standard wages won’t replace unionization, new electric vehicle companies will reduce wages accrued by union workers.”
The prevailing wage concept shows promise for maintaining high standards in the auto industry as it electrifies, but policies need to be well adapted to the new jobs. A new report by the Center for American Progress explains how to effectively develop a current wage policy for electric vehicle jobs. The report emphasizes the need to ensure that existing combustion engine car jobs provide reference points for new prevailing wages for EV jobs and the importance of clear standards and good data to ensure that prevailing wage calculations accurately reflect market conditions.
As important as it is, a common wage is not the only policy needed to ensure high standards in the EV transition. Other necessary policies include policies that prevent discrimination, promote domestic production, ensure compliance with existing workplace laws, and respect workers’ right to join unions and bargain collectively. Indeed, unionized workers enjoy many advantages compared to non-union workers – such as safer workplaces, grievance procedures, protection against retaliation and a strong voice – which are not addressed by mainstream wage policies. Still, a well-designed common wage would be a particularly important policy to ensure high standards in EV jobs.
This isn’t the first time Congress has faced a choice as to whether the modernization of key transportation sectors would continue to support good jobs. During some major transitions in key industries such as: Railway and transit, policymakers have passed legislation to protect the high standards workers have achieved through collective bargaining. By setting high standards now, while US electric vehicle production is still in its infancy, policymakers will support good jobs for auto workers for years to come.
David Madland is the author of “Re-Union: How Bold Labor Reforms Can Restore, Revitalize, and Reunite the United States† and is a senior fellow at the Center for American Progress.