A new EPI report lays out the stakes for workers in how policymakers manage the coming shift to battery electric vehicles (BEVs).
If BEVs rise to 50% of domestic auto sales by 2030, 150,000 jobs in the auto industry could be created with policy measures to shore up U.S. market share and domestic content in BEV production. Key policies include making strategic investments in technology, building up advanced manufacturing capacity, and crafting better trade agreements with more reliable enforcement measures.
But nearly 75,000 jobs could be lost instead if—thanks to policy inaction—the batteries and drivetrains powering the BEVs continue to be produced abroad and U.S. producers make no gains in the share of overall car sales.
For the auto sector to be a hub of good jobs in the U.S. economy, policymakers will need to pass measures to invest in technology and to invest in workers, including strong labor standards and affirmative efforts to encourage unionization. Wages in the auto sector continue to be higher than in the rest of the economy, but this relative pay premium is driven by the unionized segment of the sector, and the unionization rate in autos has declined in recent decades.
“If the shift to electric vehicles is accompanied by strategic investments in technology alongside measures to strengthen bargaining power for workers, then the number and quality of jobs will rise together with electric vehicle production,” said Josh Bivens, director of research at EPI and co-author of the report. “Without these policy efforts, however, employment could instead decline and job quality continue to march downward.”
Black workers, and workers with less than a bachelor’s degree, likely have the most to gain from policy action to boost U.S. competitiveness in electric vehicle production—and the most to lose from inaction. That is because Black workers and workers without a four-year college degree make up a disproportionate share of auto parts and assembly employment. Concretely, Black workers account for 12.5% of workers economywide, but 16.6% of workers in the auto sector. Workers without a four-year degree account for 62.2% of workers economywide but 74.6% in the auto sector. The disproportionate share of Black workers in the auto sector is almost entirely driven by the unionized segments of the sector.
The jobs embedded in the U.S. automobile supply chain once provided a key foundation for middle-class growth and prosperity. A cascade of poor policy decisions has eroded employment and job quality in this sector and degraded labor standards across U.S. manufacturing and throughout the overall economy. The industry transformation coming due to the widespread adoption of BEVs provides an opportunity to reverse these trends.
“This report shows both the challenges and opportunities of the transition to electric vehicles. While the transition itself may be inevitable, the economic impact is not. We can ensure the shift to electric vehicles creates jobs and benefits workers—if policymakers act,” said Jim Barrett, principal at Barrett Economics and co-author of the report.
Today at Noon Eastern, the shift to all-electric vehicles will be discussed during a virtual event “EVs Are Coming: Strengthening Auto Manufacturing and Building Good Jobs in the Shift to Electric Vehicles.” Co-hosted by EPI and BlueGreen Alliance, the event will include remarks from Brian Deese—director of the National Economic Council—and Senator Debbie Stabenow (D-MI), followed by panels of labor, environmental, economic, and manufacturing experts. Register here.