Rising authoritarianism and the need to upend the failed Southern economic development model

For generations, Southern politicians backed by powerful business interests have promoted a Southern economic development model—characterized by low wages, regressive taxation, lax environmental regulations, a weak social safety net, and vicious opposition to unions—while claiming such policies will attract business and thereby generate regional economic gains. But data actually show a grim reality. The South lags all other regions on most indicators of economic health including job growth and wages, and Southern workers and their families experience significantly higher rates of poverty than in other parts of the country (Childers 2024a).

The truth is that this Southern economic development model was never designed to benefit most Southerners; rather, it is historically rooted in efforts of white plantation owners to retain their wealth following emancipation and ensure continued access to the labor of Black people for as little compensation as possible (Childers 2025). Foundational to these efforts was an authoritarian approach to state governance that suppressed popular democracy and worker organizing—an approach that also sanctioned prison labor, sharecropping, a century of Jim Crow laws, lynching, and other forms of state-sponsored terror and exploitation. Until partially challenged by federal legal and policy interventions won by post-WWII civil rights movements, many Southern states for decades held elections that served merely to provide a cover of legitimacy to one-party rule of white, wealthy elites—functionally excluding Black voters from the electorate and blocking working-class constituencies from any meaningful participation in governance (Mickey 2015; Perez 2024; Mast 2025).

Today, the Trump administration’s increasingly authoritarian actions echo this troubling Southern history. At their foundation, the administration’s approaches to bypassing constitutional checks and balances—while rolling back civil rights, worker rights, and environmental protections; terrorizing immigrant communities; deploying military troops in U.S. cities; and attempting to engineer election outcomes via gerrymandering and other forms of voter suppression—are rooted in authoritarian models developed and tested in the U.S. South, and that Black, brown, and immigrant communities across the country are no stranger to.

Recent attempts to terminate federal employee collective bargaining agreements, for example, are familiar to public employees in Southern states for whom collective bargaining has long been banned or severely restricted. The Trump administration’s use of military-style policing in communities across the country echoes Southern histories of weaponizing law enforcement (or National Guard troops) to suppress organizing and instill fear, while prioritizing the expansion of the carceral state over investments in housing, education, and public services. Trump’s efforts to override the authority of state officials mirror Southern state uses of abusive preemption laws to strip policymaking authority from local governments. And administration attempts to halt clean energy investments and environmental protections threaten to repeat harms familiar in Black and brown communities in the South, where corporations have insisted on lax environmental regulations that allow them to degrade air, water, and climate quality, while profiting from the exploitation of local natural resources and labor.

Seizing opportunities to reverse decades of anti-worker, anti-democratic policymaking in the South at a moment of rising authoritarianism in the U.S. is a daunting and unavoidably urgent challenge. It will require robust new forms of multiracial organizing and labor-community coalition building across a broad set of industries in the South. Labor-community coalitions can leverage community benefits agreements (CBAs) as a powerful tool to transform economic power relations in Southern workplaces and communities. Because CBAs are private agreements between labor-community coalitions and project owners, they do not rely on government action and can therefore shape economic outcomes of major projects even in otherwise hostile political environments. CBAs have traditionally been fought for and won by labor and community groups coming together and building necessary public pressure to hold developers, corporations, and elected leaders accountable for ensuring that public investments in major new developments truly benefit workers and communities.

In this report, we analyze the potential for labor-community coalitions to pursue strong CBAs that secure significant economic benefits for Southern manufacturing workers and communities, drawing on examples of existing agreements to model potential impacts. We examine the scale of recent public investments in Southern manufacturing and examine how strong CBAs on major publicly-subsidized private projects could improve the quality of newly created construction and production jobs; open up pathways to unionization; ensure equitable hiring and training opportunities for local residents; and address community needs such as child care, affordable housing, and natural resource protection.

We contend that upending the failed Southern economic development model and the authoritarian structures that underpin it will require building new forms of labor and community power to increase union density in the South. Well-known research shows that unions promote economic equality and help workers win improvements in pay, benefits, and working conditions (Economic Policy Institute 2021). But unions also powerfully affect people’s lives outside of work. They help foster solidarity, increase democratic participation, enable working-class communities to shape economic policies affecting their lives, and serve as a counterweight to corporate power in our economy and democracy (McNicholas et al. 2025). Historically, unions have been engines of resistance to entrenched and undemocratic power—mobilizing working people to challenge inequality, defend civil rights, and push back against authoritarianism in all its forms. For all these reasons, strengthening labor-community coalitions and pathways to unionization in growing Southern industrial sectors is not just good economic policy—it is also a democratic imperative amid national authoritarian backsliding.

Worker and community power can ensure new manufacturing investments yield good jobs and community benefits

The latest wave of manufacturing growth in the South presents both opportunities and pitfalls for workers and communities. Southern states continue to lure businesses—including large manufacturing facilities—with promises of low corporate tax rates, low wages, lax regulations, and massive public subsidies. The automotive manufacturing industry has been a key recipient of public subsidies, receiving billions of dollars from Southern states in recent decades (Childers 2024a; Todd 2021). This system of low taxation and corporate giveaways starves other essential public goods, like education and social safety net programs (Mast 2025b). Likewise, weak or nonexistent environmental regulations have contributed to toxic sites and resource degradation that disproportionately affect Black and brown families, reflecting often intentional decisions to site hazardous facilities in low-income communities of color (Bergman 2019).

Some announced manufacturing projects have been cancelled or reduced in size after the Trump administration’s slashing of federal supports for strategic industries, but many projects launched during the Biden administration continue to move forward. These manufacturing investments, both in traditional industries and nascent ones such as electric vehicle (EV) and EV battery manufacturing, are spurring significant job growth in some Southern communities. Yet past experience shows that new investments and resulting jobs are unlikely to generate economic benefits for most Southerners unless local residents are able to ensure that developers and corporations respect workers’ rights, protect local natural resources, and contribute a fair share toward addressing priority community needs.

Community benefits agreements can be powerful vehicles for communities to secure lasting local economic benefits from major industrial development, at both new and existing facilities. A CBA is a legally enforceable contract between a private developer or company and a local coalition—typically made up of labor, community, faith, environmental, and other grassroots organizations—that details how a project will benefit workers and the community, and in turn how the community will support the project (including via potential public investment). Benefits spelled out in a CBA can include commitments to strong labor standards; respect for workers’ rights to organize; equitable workforce recruitment, training, and hiring practices; affordable housing; environmental protections; or a broad range of other community-identified priorities. CBAs are a well-developed model for responsible community development—so far mostly, but not entirely, in regions outside the South—and have been used for many different types of major projects including sports stadiums, events centers, manufacturing plants, airports, transit projects, and more (WRI n.d.).

CBAs can likewise mitigate risks for project developers by ensuring local project support and addressing important concerns early on, whereas failure to engage local communities in major development decisions can otherwise lead to strong community opposition, interruption of development, obstacles to obtaining necessary siting permits or rezoning approvals, or significant legal costs. In an example from June 2024, developers shelved plans for a $1.3 billion data center in Indiana after facing significant local opposition over environmental concerns (Fazili et al. 2025).

Because a CBA is a private, legally binding agreement, it does not require government action and can be used to shape outcomes of major projects even in contexts (as in most of the South) where state legislators have preempted local governments from establishing their own job quality or environmental standards (EPI 2025a). That being said, state and local governments can still have a role in facilitating, negotiating, or enforcing community benefits. Cities like Detroit and Cleveland have ordinances requiring developers of projects using public resources to engage in a community benefits plan process (City of Detroit n.d.; City of Cleveland n.d.). In 2005, Atlanta passed an ordinance specifying worker and community benefits for the Beltline redevelopment (WRI 2025). However, government involvement in community benefits plans does not guarantee strong agreements on its own. A strong labor-community coalition remains essential for securing meaningful community benefits.

Another key strength of a CBA is that it can set standards across all stages of a project’s development to ensure long-term benefits for the community at large. Private developers or public entities sometimes negotiate Project Labor Agreements (PLAs) or Community Workforce Agreements (CWAs) with building trades unions and community partners to set wages, working conditions, and timelines for the construction phase of a complex development project. A CBA can be negotiated alongside a PLA to also ensure pathways to quality jobs for local residents during the operational phases of a project, including any future expansions of the facility or additions to its workforce. A CBA can also secure commitments to build affordable housing, strengthen environmental standards, and provide other benefits to the community such as child care, public parks, or other community spaces.

To be successful, a CBA must also include defined enforcement mechanisms that hold all parties to the agreement accountable. It must clearly establish the obligations of each party, metrics for measuring progress, and ongoing monitoring of compliance with the agreement’s provisions (Last 2025; PWF and CBLC 2016). If the company or the coalition fails to make good-faith efforts on the agreement’s commitments, an arbitration process is initiated. While monitoring of the agreement is an ongoing responsibility of all members of the coalition, providing a pathway for workers to organize in the operational phase of a project is of particular importance. A newly established union at the project site is well-positioned to monitor the commitments of the CBA and hold the company accountable over the long term.

Organizers and advocates should be clear-eyed that while strong CBAs can yield powerful economic outcomes, such agreements are by no means easy to win. There are generally no legal requirements for a particular company or developer to recognize or engage with a labor-community coalition, much less to agree to negotiate and implement a CBA. Building the broad-based, durable coalitions and leverage necessary to compel private interests to engage in CBA negotiations (and then to implement and enforce the terms of a CBA) is unavoidably a challenging, long-term, resource-intensive organizing project. And like any worthwhile organizing, the formation of strong, durable labor-community coalitions is itself a key outcome of successful CBA campaigns. Vastly expanding the capacity of broad-based coalitions and labor, faith, environmental, and other grassroots organizations to gradually build community and worker power in Southern communities is the most essential ingredient for transforming existing power imbalances and, ultimately, upending the failed Southern economic development model.

Indeed, recent initiatives to win CBAs in Southern states have proven so threatening to some corporate interests that they have sought to undermine them. In 2025, Tennessee Republicans passed legislation prohibiting any company that enters into a CBA from receiving state economic development funds—aiming to create obstacles to replication of a highly successful CBA covering Nashville’s soccer stadium, and to discourage a coalition of West Tennessee residents and allied groups calling on Ford and SK Innovation to negotiate a CBA covering its massive BlueOval electric vehicle and battery manufacturing complex (Abrams 2025). In Tennessee and elsewhere, however, labor-community coalitions are nonetheless continuing to organize to ensure that massive, publicly subsidized new facilities yield good jobs and community benefits.

A new wave of Southern manufacturing is an opportunity to transform working conditions in growing industries—and across the South

Growth in Southern manufacturing industries presents a significant opportunity for labor-community coalitions to shape labor standards and community benefits in new plants and facilities—and to shape economic outcomes for generations of Southern workers to come. In recent years, the South has seen a wave of manufacturing investments. Between 2017 and 2023, manufacturing construction doubled in the East South Central Census division (Alabama, Kentucky, Tennessee, and Mississippi) (O’Brien 2023). The West South Central division (Arkansas, Louisiana, Oklahoma, and Texas) has the highest amount of manufacturing construction spending of any division in the U.S. These investments are part of a long-term trend of manufacturing industries locating in the South, which in recent years was accelerated by large federal investments through the Inflation Reduction Act, Infrastructure Investment and Jobs Act, and CHIPS and Science Act. These federal investments included both direct public subsidies and tax credits to businesses that invested in key clean energy manufacturing industries such as the production of batteries, electric vehicles, solar panels, and wind energy products.

In contrast to the typical economic development approach of many Southern states, some recent federal investments have included incentives meant to encourage strong labor standards on projects receiving public funds. While the future of many of these investments (and accompanying incentives) is now uncertain, the U.S. has in the past two years experienced its largest investment in clean energy manufacturing ever, and much of that has occurred in Southern states.1 Since the third quarter of 2023, more than $125 billion worth of clean energy manufacturing investments were announced across Georgia, North Carolina, South Carolina, Tennessee, Kentucky, and Texas (CET 2025). Advancing even a portion of these projects would result in thousands of jobs for Southern workers.

Independent of the future of federal support for clean energy manufacturing, the South will likely continue to be the largest manufacturing employer of all U.S. regions. Figure A shows manufacturing employment by region in the United States since 1990. While manufacturing employment overall has fallen during the last three decades, the South has retained the largest share of manufacturing employment of any region. In 2024, 35% of U.S. manufacturing employment was in the South. Furthermore, since 2010, manufacturing employment in the South has grown by 17%, the quickest growth of any region.

Figure A

Manufacturing jobs are often considered to be well-paid, benefit-providing “middle-class” jobs, but there is nothing inherent to the sector that determines their quality. Manufacturing jobs in some industries became “good jobs” thanks to relatively high levels of unionization during the mid-20th century, which improved wages, benefits, and working conditions (Bayard et al. 2024; Rhinehart and McNicholas 2020). As Figure B shows, unionization in manufacturing has fallen in all regions since 1983, but the South has almost without exception had the lowest unionization rate of any region.

Conservative Southern policymakers have long been hostile to union organizing. For example, every Southern state except Maryland and Delaware has passed anti-union so-called right-to-work (RTW) laws, which make it harder for workers to form, join, and sustain unions. Southern states like Florida and Arkansas were among the first to pass such laws in the 1940s, amid a wave of big business backlash against new federal labor laws and white supremacist campaigns to maintain racial hierarchies and suppress multiracial worker organizing. RTW laws suppress unionization rates and, as a result, have driven down wages for both union and nonunion workers alike across the South (Sherer and Gould 2025; Childers 2023).

Figure B

In 2025, Southern manufacturing had a 6.7% unionization rate—slightly below the national unionization rate for private-sector workers (6.8%). Unionization in Southern manufacturing grew by more than a percentage point between 2024 and 2025, a notable one-year reversal of the industry’s long-standing unionization decline, consistent with overall union gains in the South (McNicholas, Poydock, and Shierholz 2026). Nevertheless, Southern manufacturing’s unionization rate remains well below the Midwest’s (11.2%), the region where manufacturing is the most heavily unionized. Unions have a strong impact on job quality because they leverage worker power collectively to raise wages, win benefits like health care and retirement, and enact other meaningful workplace improvements, such as improved health and safety standards. These benefits can extend beyond unionized workers themselves, helping set standards across a workplace, and with enough density, across an industry.

As unionization declines in an industry or region, so does job quality. For instance, as unionization rates have fallen in auto manufacturing, the pay advantage for auto workers compared with the median worker has declined significantly (Barrett and Bivens 2021). Figure C demonstrates how this relationship holds across regions in 2025. Manufacturing jobs in the South have a pay advantage of 7%, the lowest of any region. Southern manufacturing workers also experience the lowest median hourly pay of any region ($24.41).2

Figure C

The Southern economic development model clearly hurts the region’s workers by denying them their right to organize and suppressing their wages, but there are harmful spillover effects for their communities as well. Corporate tax breaks with no strings attached provide billions of dollars to corporations that could otherwise be used to invest in schools and other essential government services. These types of tax breaks might be worthy of consideration if manufacturing employers were required to create high-quality jobs for local workers and make long-term investments in local community development needs (i.e., housing, infrastructure, education, etc.). Without such protections, they are simply taxpayer-funded giveaways that often drain the very resources needed to develop the local workforce recruited by large new facilities.

Southern states enact little to no regulation of workplace safety or environmental pollution. This results in unsafe workplaces with greater levels of injury and death (Childers 2024a). Environmental pollution from manufacturing sites can negatively affect public health by contaminating water, air, and soil. New manufacturing investments also can mean significant changes to the demand for housing in a community. A new plant or factory can drive up the cost of living for nearby residents without yielding any economic benefits to a local community. Labor, community, and environmental groups need to collaborate on shared solutions to effectively address these intertwined challenges.

Labor-community coalitions can obtain commitments that ensure “economic development” means shared prosperity for all

Labor-community coalitions organizing around manufacturing projects can secure commitments that offer direct economic benefits to workers and communities, while also establishing groundwork for the growth of worker and community power in the area. While a campaign to win a CBA can be the impetus for forming a local labor-community coalition, the alignment and relationships built through this shared work can lead to longer-term, sustainable coalitions capable of transforming local and state power relationships.

The following section analyzes a set of commitments that can be included in a CBA for a manufacturing project. The CBA framework is flexible and allows for the inclusion of many different types of commitments prioritized by particular groups of workers, community members, and environmental groups. This report focuses on key types of commitments including union neutrality agreements, living wage floors, equitable workforce development practices (such as local or targeted hire policies and programs to expand pathways to apprenticeship training), affordable housing provisions, child care benefits, and environmental protections. Each type of commitment is analyzed in terms of its economic impacts and effectiveness in reshaping local economic development to ensure that public investments generate broadly shared community benefits.

The construction phase and Project Labor Agreements (PLA)

This report mostly focuses on community benefits for workers during the operational phase of a manufacturing plant. Nevertheless, it is just as vital to set high labor standards during the construction phase. Strong community benefits agreements are ideally developed in tandem with strong project construction labor standards set via project labor agreements (PLAs). A PLA is a multiparty agreement between a project owner and a coalition of labor unions that sets out labor standards and dispute resolution procedures to promote stability and efficiency on complex infrastructure projects while also ensuring the project will generate good jobs. PLAs ensure that construction projects run smoothly, are safer, and pay workers fairly (Mangundayao, McNicholas, and Poydock 2022). By setting negotiated wage and benefit levels for each type of work on a project, PLAs level the playing field in highly competitive construction bidding processes; they ensure that contractors base bids on their ability to deliver on quality and efficiency, rather than low-ball cost estimates that reflect intent to pay substandard wages or cut corners on safety. By standardizing wage and benefit levels and taking them out of the competition in the bidding process, PLAs incentivize the use of skilled union labor, which is 14% more productive than nonunionized construction work (McFadden, Santosh, and Shetty 2022). PLAs typically set wages, fringe benefits, and working conditions but can also include requirements to utilize certain numbers of apprentices, hire locally or from certain target worker populations, and/or provide child care or other benefits that open up pathways to good union construction jobs for members of underrepresented groups.

Several of the types of standards for construction workers typically included in a PLA have analogous labor standards in the operational phase. For instance, a CBA can secure commitments for local or targeted hiring and the development of registered apprenticeship programs in a manufacturing facility, extending equitable recruitment and high-quality training requirements that a PLA typically sets for construction into the operational phase of a project.

Removing obstacles to unionization: Neutrality and labor peace agreements

Protecting workers’ freedom to unionize has historically been key to turning manufacturing jobs into good jobs. This remains just as true today. However, like workers across the country, Southern manufacturing workers continue to face formidable obstacles—including weak labor laws, powerful anti-union corporations, and hostile politicians—to exercising their legally protected rights to form or join a union. Employers are charged with violating federal labor law in more than 40% of union elections and spend more than $400 million a year on “union avoidance” consultants (McNicholas et al. 2019; McNicholas et al. 2023). Because existing weak labor laws do not effectively deter employers from union busting, these tactics are treated by many employers as a normal cost of doing business—stacking the deck unfairly against workers seeking to exercise their rights to organize and collectively bargain.

Union neutrality agreements can help safeguard workers’ right to form unions free of the types of interference employers often deploy. Under a neutrality agreement, an employer agrees to remain “neutral” and not interfere with workers’ decisions on whether to unionize. Such agreements typically include joint commitments to a “card check” process for verifying whether a majority of employees have indicated interest in forming a union. Unions and employers sometimes also enter into a labor peace agreement, where unions agree not to engage in certain types of picketing, work stoppages, or other economic disruptions during the organizing process in exchange for employer neutrality.

Employers can also choose to commit to union neutrality as a matter of principle or company policy. Union neutrality—providing workers a more free and fair choice to decide whether to unionize—has been a key component of successful unionization drives in Southern manufacturing. To take two recent examples:

• In 2024, workers at the Volkswagen (VW) Chattanooga plant voted to join the United Auto Workers. Like many European corporations, the German-based VW has an established policy of maintaining neutrality in union election processes, although workers still voiced concerns that in its U.S. facilities, VW management tried to intimidate and dissuade workers from forming a union (Bomey 2024).
• In tandem with community benefits agreement negotiations with New Flyer in Anniston, Alabama, the United Steel Workers and Communications Workers of America negotiated three neutrality agreements with New Flyer and its subsidiaries in 2022. Over the two years that followed, these union neutrality agreements enabled workers to pursue five successful union drives, including at the New Flyer facility in Alabama (Last 2025; Sasha 2024).

Successful recent instances of union organizing in Southern manufacturing facilities have been powerful enough to generate their own backlash. Because of the threat that union neutrality agreements represent to the reigning Southern economic development model, several conservative state legislatures in the South have used model legislation developed by the American Legislative Exchange Council to pass laws intended to interfere with these agreements (Sachs 2024). While the legality of such measures remains in question and has not yet been tested, Alabama, Tennessee, and Georgia now all have legislation in place stating that employers who agree to a union neutrality agreement will be barred from receiving state economic development funds, disincentivizing companies from participating in these agreements (Stephenson 2024).

Importance of unionization to improve manufacturing jobs and wages

Securing unionization in Southern manufacturing can have significant wage benefits for workers. Unionized manufacturing jobs are more likely to provide family-sustaining wages. Unionization in manufacturing is associated with a 17.9% wage premium for workers (Scott et al. 2022). This means that compared with similar workers in terms of education, occupation, experience, race, and ethnicity, unionized manufacturing workers are paid almost a fifth more per hour than their nonunionized counterparts.

Table 1 translates this union premium into how much more unionized workers in the South could make on an hourly, annual, and plant-wide basis. The average nonunionized manufacturing worker in the South earns $34.50 an hour, so with the typical union premium, that worker would be earning an additional $6.18 an hour. If that worker works full time, year-round, the hourly premium translates to $12,846 more a year. To illustrate the potential impact of unionization in an entire plant, we take the example of the BlueOval auto manufacturing investment in Tennessee, which is projected to create 6,000 jobs (TN Office of Governor 2023). For a plant of that size, unionization could mean more than $77 million in additional wages for workers.

Table 1

Wage gains from successful unionization are not hypothetical for manufacturing workers in the South. For example, in 2024, workers at New Flyer in Anniston, Alabama, ratified a union contract with significant pay raises, with some workers gaining raises of up to 38% through 2026 (CWA 2024). Establishing a union contract with transparent pay ladders will also help New Flyer workers combat persistent pay gaps between white and Black workers in Anniston’s manufacturing industry (Erickson 2021).

The benefits of unionization go far beyond hourly wage increases. The workers at New Flyer also achieved significant gains in terms of vacation time and retirement contributions. Unionized workers secure critical benefits like health care and sick days at greater rates than their nonunion peers. Adjusting for differences in industry, sector, and region, union workers are 18.3% more likely to have employer-covered health insurance than their nonunion counterparts (EPI 2021). Almost 9 in 10 private-sector union workers have paid sick days, compared with less than three-fourths of nonunion private-sector workers (EPI 2021).

Unions also contribute to safer and healthier working conditions across a wide range of industries (Dean, McCallum, and Venkataramani 2022). By strengthening workers’ voice on the job, unions empower workers to report safety issues and demand better protocols. One example of this is that unionized construction sites experience significantly lower rates of Occupational Safety and Health Administration (OSHA) violations than nonunionized sites (Manzo IV, Jekot, and Bruno 2021). This is despite the fact that unionized workplaces actually experience greater rates of OSHA inspections than other workplaces, likely because many unions maintain active health and safety committees and because unionized workers have greater access to education on how to recognize safety hazards and are less afraid of reprisals from their employer for reporting them (Leigh and Chakalov 2021).

As the New Flyer agreement demonstrates, a strong CBA includes (or is negotiated in tandem with) union neutrality commitments ensuring that workers have a free and fair choice to unionize, without employer interference or retaliation. Securing a pathway to unionization can provide direct benefits to workers at a particular facility, while also increasing local organizing capacity and coalition strength for future negotiations over new projects and local development decisions. Not only is a new union a legally recognized institution that can monitor and hold the company accountable for commitments in the CBA, but it can also play a critical role in amplifying demands of workers and communities outside of the workplace and building power for working people more broadly.

Living wage floor

CBAs can also include commitments to minimum wage floors for the workers who will operate a new facility. For example, the 2018 Nashville Soccer CBA in Tennessee included a commitment to an hourly wage of at least $15.50 for stadium workers (SUN 2018). This provision set the stadium’s wage floor well above the minimum wage in Nashville, where workers—like all Tennessee workers and many across the South—are otherwise subject to the federal minimum wage of $7.25 an hour.

If a wage floor set by a CBA is high enough, it can help workers achieve a living wage in the place that they live. What constitutes a living wage must be determined by labor and community partners (Gould, Mokhiber, and DeCourcy 2024). For example, a living wage could be defined narrowly as covering the necessities for a single adult, or more broadly as including the needs of a working parent and their children. A living wage target must also make assumptions about nonwage income such as health care benefits and government transfers. Manufacturing workers in the South can also rightfully seek wages that not only cover bare necessities but provide the family-sustaining resources needed to be healthy and thrive.

Figure D shows the share of manufacturing workers in the South earning less than $30 an hour, or $62,400 a year in wages for a full-time worker. More than 3 in 5 (60.8%) manufacturing workers in the region earn less than $30 an hour. Around 80% of Southern Black and Hispanic manufacturing workers earn below the $30 threshold. Women in manufacturing are also more likely to earn below $30 an hour (71.8%) than men (59.1%).

Figure D

A $30 wage floor exceeds the minimum costs for a single adult in most jurisdictions in the U.S., but still barely covers needs for many families with children in manufacturing-dense counties nationwide. EPI’s Family Budget Calculator estimates living wage standards by county that cover modest but necessary costs families face like food, rent, and transportation in the United States. Table 2 shows three Southern counties with significant clean energy manufacturing investments in recent years (CET 2025). Each county has significant manufacturing employment, exceeding the U.S. average for manufacturing employment density. For each county, living wage standards from the Family Budget Calculator are listed for different family types. In Morgan County, Georgia, and Maury County, Tennessee, a single adult with a child must earn at least $30 an hour to cover basic needs. For a single economic provider to cover the costs of a four-person family, they must earn over $35 an hour in all the counties listed. These living wage standards indicate that a $30 wage floor would provide significant economic security for workers with smaller families or multiple wage-earners.

Table 2

A CBA that secures a strong living wage standard in a manufacturing facility can create a virtuous cycle that brings about greater prosperity in the area. Higher wages for low- and middle-income workers boost spending in the local economy because these workers spend a greater share of their paycheck than high-income workers (Anderson 2014). Other employers in the area might have to raise their wages to compete for workers with the CBA-bound employer. The establishment of a living wage also demonstrates to other workers in the area that higher wages are a feasible goal through collective action.

Local and/or targeted hire policies

Local and targeted hiring refers to policies that prioritize recruitment of individuals from the local community, or workers from specific groups who are otherwise underrepresented in a given workforce relative to local population demographics, such as women, people of color, veterans, low-income workers, formerly incarcerated workers, or workers with disabilities (Lawliss, Finfer, and Sherer 2022). A local hire policy can require that a certain percentage of hours worked on a project be completed by local workers. These policies can also require giving local workers the first option to apply for jobs on a project. For the prosperity created through manufacturing investments in the South to be shared equitably, it is important that local community members have access to the jobs that are created during both the construction and operation phases of a development. Workforce policies also should be designed to remove barriers to employment for groups of workers—especially workers of color and women—who have historically been excluded from many construction and manufacturing career opportunities. Increasing access to these well-paying jobs can increase economic mobility for workers with more limited opportunities.

Despite these benefits, some state policymakers have been hostile to local hire as a public policy. In 2015, Nashville voters passed a ballot initiative that required city-funded construction projects to dedicate 40% of construction hours to Nashville residents, with 25% of those hours going to low-income Nashville residents (Blair et al. 2020). The Tennessee state legislature then quickly passed a bill that preempted the city from creating its own local hire policy.

As Figure E shows, the harm of Tennessee’s preemption of local hire falls disproportionately on workers of color. The construction workforce in the Nashville metro area has a higher share of workers of color and immigrant workers compared with the state construction workforce overall. Black workers are 8.2% of the construction workforce in Davidson County, but 5.5% of the overall state workforce. More than half (51.5%) of construction workers in Davidson County are Hispanic, compared with less than a quarter (20.1%) of the state overall. Davidson County construction workers are also more than twice as likely to be immigrants (40.2%) than in all of Tennessee (14.8%). State preemption of local hire prevented Nashville from ensuring that public spending would benefit local workers. However, private agreements like CBAs offer an opportunity to incorporate local hire and/or targeted hire requirements into publicly subsidized developments, even in heavily preempted jurisdictions.

Figure E

In 2018, three years after the preemption of Nashville’s local hire policy, the labor-community coalition Stand Up Nashville was able to leverage $275 million in public subsidies for a new professional soccer stadium into a successful CBA (SUN 2018). The Nashville Soccer CBA included commitments to local hire for stadium workers, particularly workers from “Promise Zones,” i.e., high-poverty areas with fewer economic opportunities (SUN 2020). Through the CBA, Nashville Soccer Holding, LLC agreed to consider qualified Promise Zone resident referrals for jobs at the stadium. So far, the program has succeeded in hiring Promise Zone residents. In 2023, Nashville Soccer Club had hired 180 employees, 80 of whom were residents of Promise Zones (SUN 2023).

CBAs in the South and throughout the country are securing similar commitments to local and targeted hiring in clean energy and manufacturing investments. In Alabama, the New Flyer CBA commits the company to ensuring that at least 45% of new hires and 20% of promotions are members of “Historically Disadvantaged Groups” (Sabin 2022).4 In Massachusetts, a new offshore wind terminal entered into a CBA with the City of Salem—setting targets for hiring of local workers, workers of color, and women workers (Sabin 2024). The CBA for Maine Aqua Ventis, an offshore wind facility, includes local hiring opportunities for residents of Monhegan, Maine (Sabin 2017). 

These types of agreements help ensure that local residents benefit from large investments in their communities, particularly when policymakers have invested public dollars in the form of tax breaks or corporate subsidies to support a new facility. Ensuring local workers are prioritized in training programs and hiring processes for newly created jobs also helps community members stay in the area when housing costs are driven up by a large new manufacturing investment. And in the longer term, providing pathways for local workers to benefit directly from these investments strengthens the labor and community alliances needed to hold developers and corporations accountable over time.

Equitable workforce development through apprenticeships and pre-apprenticeships

In addition to local hire policies, which help create equitable pathways for local workers to secure good jobs at a manufacturing site, construction and manufacturing projects require a skilled workforce to operate safely and productively. A robust ecosystem of registered apprenticeship and pre-apprenticeship programs can help ensure both that employers find the skilled workers they need in a large new manufacturing facility, and that local workers can access pathways to newly created jobs.

Registered apprenticeship programs are training programs vetted by federal or state agencies to ensure use of high-quality, best-practice training standards and approved curriculum aligned with skills needed to succeed in a particular occupation. Registered apprenticeships combine paid on-the-job and classroom training and result in a recognized, portable credential certifying that a worker has the skills and experience necessary for a specific occupation. Pre-apprenticeship programs (also known as apprenticeship readiness programs) recruit and prepare participants for registered apprenticeships—often partnering with community organizations—to open pathways to apprenticeship for women, Black and brown youth, immigrants, workers with disabilities, or others historically excluded from skilled trades occupations. The best practice is for these apprenticeships and pre-apprenticeships to be joint programs between unions and employers, providing high-quality instruction tailored to industry needs and training that leads to placement in a high-quality job with wages, conditions, and benefits negotiated into a union contract. Often, a vital building block for successful manufacturing apprenticeship programs is the establishment of a unionized workforce at a facility.

Unlike lower-quality workforce development programs, registered apprenticeships pay workers fairly for their labor during their training—and in joint apprenticeship programs, the wages and benefits of apprentices are negotiated into a union contract and typically include scheduled increases as apprentices progress through the training program. Registered apprentices (across joint and non-joint programs) typically see their earnings increase 49% between the year before they enter the program and the year after completing it (Walton, Gardiner, and Barnow 2022). These increases in earnings are greater than for similar workers who do not enter the apprenticeship during the same time period (Katz et al. 2022). Apprenticeships can also be particularly attractive to workers because they are debt-free. Most apprentices (60%) consider debt avoidance the most important reason for choosing to enroll in an apprenticeship (Walton, Gardiner, and Barnow 2022).

Apprenticeships can be a powerful tool for increasing the diversity of construction and other industry workforces. While participation of women and workers of color in apprenticeships has grown in recent years, this growth has been painfully slow for decades (CEA 2024). Research finds that union-based (joint) apprenticeship programs have been more successful than other types of apprenticeships at increasing diversity in the construction industry (Ormiston and Bilginsoy 2024). Joint apprenticeships enroll a higher share of women, Black workers, and Hispanic workers than non-joint programs, and have higher program completion rates for all workers, including for women and workers of color. Community benefits agreements can secure commitments and partnerships that equitably grow this pipeline of workers and set enforceable local and targeted hiring goals which in turn spur diversification of construction and manufacturing apprenticeship programs.

For instance, the New Flyer CBA creates a partnership between the company and coalition partners to develop pre-apprenticeship and technical training programs that expand access to manufacturing jobs for workers with low incomes and from disadvantaged groups (Sabin 2022). For these programs to succeed, community groups and educational institutions must have an active role in shaping the programs and connecting workers to these opportunities. The development of a growing skilled workforce and a robust, high-quality workforce development ecosystem can in turn be a strong incentive for bringing more facilities to an area over time. In 2015, Polaris stated that a significant factor in its decision to choose Huntsville, Alabama, for a new production facility was the area’s skilled workforce (Polaris 2015). As more workers participate in high-quality training programs that lead to union jobs, the organized workforce of the region will grow, strengthening labor-community coalitions the next time there is an opportunity to shape new development in the region.

Child care

Child care is an essential but extremely costly expense for many working families across the South. Average annual infant care costs in the South range from $6,868 in Mississippi to $14,277 in Virginia.5 The Department of Health and Human Services recommends that 7% or less of family income go toward infant child care costs, but typical Southern families spend significantly more. In Alabama, infant care costs are 9.8% of median family income, while in Oklahoma the share is 15.4% (EPI 2025b).

Increasing access to high-quality, affordable child care not only makes work more accessible to parents (and especially to women, who on average continue to assume disproportionate care responsibilities), but is a powerful investment in children’s development that can help narrow class and racial inequalities (Morrisey 2020). In addition, child care workers tend to work for very low wages and experience poverty at greater rates than the typical worker.

A large manufacturing investment in a locality might produce a significant number of jobs, and in turn increase the demand of workers and their families to live nearby. This is likely to increase the need for child care services in the region. However, data show that child care employment has not kept up with manufacturing growth in Southern counties. Table 3 compares counties with high manufacturing density, where manufacturing employment makes up more than the national average (9% in 2009), with those with lower manufacturing employment density (EPI 2025c).

Table 3

Between 2009 and 2024, manufacturing employment in high-manufacturing-density counties in the South grew 15.9%, achieving faster growth than similar counties in the U.S. overall (12.1%). However, over the same period, child care employment only grew 4.5% in Southern high-manufacturing-density counties, far below the national rate of 14.2%. Child care employment growth in the South for low-manufacturing-density counties (22.3%) is also below the national level (28.5%). The South systematically underinvests in child care, despite its importance to a healthy economy in the region.

CBAs and PLAs have been used to secure both the construction of physical child care spaces and financial support for actual services. The Nashville Soccer CBA reserved 4,000 square feet for the development of a child care center (SUN 2020). In 2001, the CBA for the North Hollywood Commons mixed-use development project in Southern California secured a commitment to an on-site child care center. Fifty child care spaces at the center were reserved for low- and moderate-income families (Sabin 2001). In the Boston area, unions have secured Project Labor Agreements that seek to address the unique child care needs of the construction industry. The PLA for the Winthrop Center in Boston established a child care access fund to research, develop, and implement alternative child care models within the construction industry, with a particular focus on assisting single mothers with child care while supporting their career (NEREJ 2019).

These types of investments are vital supports for working families, particularly mothers, seeking to balance professional and care work. Combined with union neutrality for the child care workers at these facilities, commitments to providing child care can further elevate worker power in the region and help large new facilities recruit and retain the skilled, experienced workforces they need to succeed.

Affordable housing

Without strategies to address the housing needs of a community impacted by a new manufacturing investment, local residents can experience increased economic precarity or forced displacement. The local housing impacts of a large industrial investment can be complex. A significant manufacturing investment can make a local community more attractive as workers move into the area to be close to their place of work. Manufacturing investments are also likely to be paired with prospective real estate investments in anticipation of future development around the original project. State and local governments might use eminent domain and other purchasing mechanisms to secure land for roads and other new infrastructure. These dynamics can increase housing costs for residents, particularly renters who are most vulnerable to the impacts of housing speculation and prospective rent increases. For instance, the BlueOval development in West Tennessee is already reported to have increased property prices and housing rents (TCG 2023). Homeowners, particularly those with fixed incomes, can also be more burdened with housing costs as higher demand in the area increases property tax valuations (Payne 2019).

On the other hand, extreme proximity to an industrial site can expose residents to environmental hazards and noise pollution, and may be considered unsightly, which decreases property values (Currie et al. 2016; Upton and Talpur 2024). The exact distribution of these changes in demand for housing across a community will depend on the type of industry and any other types of development included in the project.

Industrial investments like manufacturing facilities tend to take place in rural and semirural areas, in part because land is relatively inexpensive (Wiley 2015). While the counties with a higher share of manufacturing employment tend to have lower housing costs than urban areas, housing affordability remains a significant issue for workers. On average, across high-manufacturing-density counties in the South, a two-adult, two-child household must cover more than $14,000 a year in housing costs.6 A large share of renters in high-manufacturing-density counties in the South still are cost-burdened by housing, meaning they spend more than 30% of their income on rent, utilities, and other housing costs. As shown in Figure F, across the Southern states, the share of cost-burdened households in high-manufacturing-density counties ranges from 28% in Arkansas to 47% in Florida. More than 2 in 5 (42%) of Texas renters in these counties are also housing cost-burdened.

Figure F

A strong CBA will secure commitments to build a certain number of affordable housing units or dedicate a share of housing at the site as affordable. The Nashville Stadium CBA created agreements that at least 12% of residential units in the development would be affordable and that 20% of those units would be three-bedroom units to accommodate families (SUN 2020). The Staples Center CBA in Los Angeles, California, was another successful example of strong affordable housing benefits. The 2001 agreement for the development of an expanded convention center, theater, and surrounding housing, hotel, and retail space secured commitments that 20% of housing units would be affordable. The developer also agreed to provide $650,000 in interest-free loans to nonprofit affordable housing developers in the local community (WRI 2001).

Even in situations where a labor-community coalition is unable to reach a final CBA with a company, coalition organizing around community demands can still deliver meaningful affordable housing victories. Between 2002 and 2006, a labor-community coalition in Denver pressured Cherokee Investment Partners to provide community benefits as part of their redevelopment of the site of the Gates Rubber Company. The coalition leveraged zoning changes necessary for the project and a potential subsidy package from the city to extract benefits including an affordable housing plan for hundreds of rental and for-sale affordable housing units (Ingram and Hong 2011; PowerSwitch Action 2025).

In 2005, the labor-community coalition organized by Georgia STAND-UP was able to attach community benefits to an Atlanta city ordinance allocating $2 billion in public funding for the Atlanta Beltline transit-oriented development project. The city resolution shaped by the coalition established an affordable housing trust fund and a goal of developing 5,600 affordable housing units (PowerSwitch Action 2025). As of 2024, more than 4,100 affordable units have been created as part of the project (Atlanta Beltline, Inc. 2024).

Labor-community coalitions can also pursue other land-use commitments beyond the development of affordable housing. The BlueOval Good Neighbors coalition in West Tennessee has demanded commitments to protect land for farmers in the area. The development of the Ford factory has pushed Tennessee’s Department of Transportation to pursue land for new roadways through purchase and eminent domain. The area targeted for new roadways is a majority Black farming community, and several farmers are engaged in lawsuits with the state over the state’s meager compensation offers for their land (Wadhwani 2023). The coalition has demanded that farmers be offered replacement land in exchange for their sold land, as well as the creation of a 10,000-acre community land trust (BlueOval Good Neighbors n.d.).

Creating or protecting affordable housing is essential for protecting the communities that are necessary for any effective labor-community coalition. Large developments can cause instability within the community as new residents arrive, and existing residents are buffeted by rising housing costs. Because of historic and ongoing racial discrimination in housing policy, labor policy, and real estate practices, the costs of these changes are most likely to impact Black and Hispanic workers. Black families and other workers of color are the most likely to be cost-burdened by housing (JCHS 2024). Creating housing for workers and families to remain in the area is vital for continued collective action to secure benefits from developers and hold those developers accountable for their promises.

Environmental standards, funding, and monitoring

Large-scale manufacturing projects often have significant environmental impacts, both during construction and once they are in operation. Air, noise, and groundwater pollution; harm to wildlife habitats; and residents’ exposure to toxic byproducts are just a few examples of common concerns, and these consequences can be severe when projects are approved without sufficient environmental consideration. The consequences of large manufacturing projects often disproportionately harm communities of color and low-wealth areas throughout the South (Brouk 2024). For decades, poor and Black residents in the region have been exposed to toxic chemicals, pollution, and other environmental dangers at alarming rates (Bergman 2019).

In 2021, the Tennessee governor approved the construction of a General Motors lithium battery supplier in the city of Spring Hill, on the banks of the Duck River. Though the project was seen as an economic success, the plant’s operation has taken a toll on the fragile river ecosystem. The lithium battery factory is not the only strain—just eight companies along the river drain tens of millions of gallons of water daily (Wadhwani 2024). This enormous water usage has lowered river water levels, threatened biodiversity, and harmed local tourism and recreation. Advocates for the river’s health blame the state’s prioritization of manufacturing expansion without regard to the long-term environmental or economic consequences for local residents or other existing local industries.

CBAs are a tool that may help community-labor coalitions address the environmental impacts of data centers in the South. Data centers are booming across the United States, but particularly in Southern states like Georgia, Texas, and Virginia (Walker and Goldsmith 2026). New centers are heavy users of water and energy, create noise and air pollution, and are driving up electricity costs nationwide both by increasing demand for energy and requiring utilities to invest in new infrastructure paid for by all ratepayers (Merchant and Guerra 2025; Bizo et al. 2021; AI NOW 2025; Reed 2025). For example, in Virginia, electric bills were on track to increase as much as 25% in 2025 because of data centers (Penn and Weise 2025).

Growing community concerns surrounding data centers could create leverage for labor-community coalitions to pursue CBAs and other community benefits strategies. In 2025, community opposition blocked or delayed $64 billion in data center projects across the nation (Data Center Watch 2025). As community resistance to data centers continues to grow, more developers may recognize the need to come to the table with local coalitions to negotiate binding commitments on environmental and economic outcomes to secure project approvals. A handful of localities have begun to create agreements with data center developers regulating water use and securing commitments to green energy use (Turner Lee and West 2026).

Past development projects provide examples of how communities have used CBAs to secure long-term commitments to clean energy transition and protection of local natural resources in a multitude of ways, from mandating that any new construction must meet specific sustainability standards to requiring companies to contribute a set dollar amount to a city’s renewable energy transition fund. In Virginia, the City of Richmond Resort Casino CBA ensured the developing and operating company would design and construct all project buildings to Leadership in Energy and Environmental Design (LEED) Silver standards and would use previously existing pavement where possible (WRI 2021). The agreement also required the developer to attempt to reduce the urban heat island effect by planting shade trees along sidewalks and using other landscaping methods (WRI 2021). These agreements can mitigate additional environmental harm in areas that have already been polluted. A CBA between the Town of Waterloo, New York, and Seneca Meadows, Inc. regarding a landfill expansion commits the waste management company to pay for the development of new public water lines and other potable water infrastructure if existing public water wells become contaminated (WRI 2005).

CBAs can also be used to expand the positive impact of an already climate-friendly project. In New York, a CBA with an offshore windfarm developer stipulates that the company must contribute $2 million to the town of East Hampton’s Ocean Industries Sustainability Program (WRI 2018). Additionally, Deepwater Wind South Fork, LLC must spend $200,000 to establish an Energy Sustainability and Resilience Fund to support East Hampton’s transition to 100% renewable energy (WRI 2018). CBAs with environmentally focused companies provide valuable opportunities for communities looking to address climate change, especially where state governments have failed to invest in environmental programs.

A CBA can achieve a variety of climate and environmental commitments from a company but is also a strong starting point for building local capacity to monitor resource use, pollution, and other environmental priorities. A strong coalition of community, labor, and environmental groups can play essential roles in implementing and enforcing CBA commitments in contexts where understaffed government agencies have limited ability to monitor or investigate pollution and other environmental harms. Instead, workers and community members are often the first to report harmful practices and safety concerns. A strong CBA can provide opportunities for labor and environmental groups to work together to monitor and protect worker and community health, natural resources, and ecosystems.

Conclusion

For decades, Southern economic policies shaped by dominant business and corporate interests have resulted in poor working conditions and failed to ensure that profits generated by publicly subsidized development are shared with local workers and communities. Confronting the deep, long-standing imbalances of power that have entrenched this failed economic development model will require significant organizing and coalition-building to increase the collective power of workers and community members to shape different outcomes from the latest Southern manufacturing boom. Building new forms of worker and community power will be equally necessary to counter escalating authoritarian actions of the Trump administration, which closely parallel many features of the failed Southern economic development model that by design prioritizes corporations over workers and communities.

Our analysis shows that community benefits agreements could be powerful tools for Southern labor and community groups building the shared power necessary to reshape local and eventually regional economies. When strong coalitions of labor, environmental, faith-based, and other grassroots community organizations are able to build the necessary power to bring a company or developer to the table to negotiate an enforceable agreement, such coalitions can secure measurable economic benefits like higher wages, respect for workers’ rights to unionize, local or targeted hiring, protection of natural resources, or more affordable housing. Such economic gains are beneficial in themselves, but they also raise expectations, build local capacity to pursue additional gains, and demonstrate to the community at large that local residents can shape their own economic futures, and that these types of victories are achievable in the face of the Southern status quo.

While the urgent project of upending the Southern economic development model will require vigorous and persistent organizing across many sectors and geographies, community benefits agreements are one key strategy for turning manufacturing jobs into good jobs, ensuring long-term local economic gains from new industrial investments, and even renewing democracy in contexts where it has long been suppressed. Forming strong, long-lasting labor-community coalitions is essential to winning concrete gains for local workers as well as reshaping the political fabric of Southern communities and increasing working people’s influence over broader state or regional economic policy decisions. Winning and implementing any strong CBA requires the formation of an empowered labor-community coalition, which ideally endures and gains greater strength, experience, and influence over time. Just as the economic benefits of unionization extend far beyond an individual workplace, establishing a strong CBA coalition can create broader positive impacts across a community or region—delivering higher-quality jobs; more equitable tax systems; stronger public services; and healthier, more inclusive political systems.

Acknowledgements

The authors wish to thank the AFL-CIO Center for Transformational Organizing for their partnership and invaluable contributions in the production of this report. The authors are also grateful to Athena Last and Ian Elder at Jobs to Move America and Ben Beach at PowerSwitch Action for their expert feedback.

Appendix

Appendix Table 1

Notes

1. Clean energy manufacturing includes manufacturing of batteries, electric vehicles, mineral products, solar energy products, and wind energy products.

2. Workers in Southern states experience lower wages than in other regions even after adjusting for cost-of-living differences (Childers 2023).

3. The facilities covered by these agreements included plants in Alabama, California, Kentucky, Minnesota, New York, and Wisconsin.

4. This category includes workers who are Black, Indigenous, and/or people of color; women; LGBTQ+ persons; systems-impacted people (formerly incarcerated people); persons emancipated from the foster care system; residents of Anniston, Alabama, lacking GED or high school diploma; and veterans.

5. Southern states excluding D.C., Delaware, and Maryland.

6. EPI analysis of Family Budget Calculator and Quarterly Census of Employment and Wages data.

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Walton, Douglas, Karen Gardiner, and Burt Barnow. 2022. Expanding Apprenticeship to New Sectors and Populations. Prepared for the U.S. Department of Labor, Employment and Training Administration. Rockville, MD: Abt Associates, August 2022.

Wiley, Jonathan. 2015. The Impact of Commercial Development on Surrounding Residential Property Values. J. Mack Robinson College of Business, April 2015.

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Zessoules, Daniella, and Olugbenga Ajilore. 2018. Wage Gaps and Outcomes in Apprenticeship Programs. Center for American Progress, December 2018.

Medium- and heavy-duty vehicles are a backbone of U.S. economic life. Transitioning these vehicles from internal combustion engines (ICE) to low- and no-emission technologies is a critical step for eliminating greenhouse gas and other toxic emissions from the transportation economy. At the same time, this transition could have serious implications for the ICE vehicle manufacturing industry and auto workers—as well as the steel and aluminum industries that contribute so much to vehicle manufacturing—that have long been hammered by outsourcing and offshoring, union-busting, and intensifying international competition.

If done right, the transition to manufacturing clean trucks and buses presents a rare opportunity to reverse these trends and revitalize long-beleaguered industries with expanding investment, creation of good jobs, and broadly rising incomes in the United States. If done wrong, the transition risks exacerbating the current trends that see companies moving production offshore or to U.S. states embracing anti-worker policies, threatening the security of the good jobs that remain.

Our report models potential economic futures for U.S. truck and bus manufacturing supply chains under a variety of policy scenarios through 2032. The results indicate three pillars are necessary to secure good jobs for legacy auto workers and new entrants to the workforce, and to ensure a robust future for truck and bus manufacturing in the United States. To win good jobs manufacturing U.S. trucks and buses, policymakers must:

1. Maintain a strong public commitment to low- and no-emission vehicle transition, including supply-side and demand-side measures to overcome endemic market failures in the development and deployment of new clean vehicle technologies.
2. Increase the domestic market share and domestic content share for clean vehicle components in made-in-America trucks and buses by tackling the problems of bad trade policies and strongly tying financial incentives to domestic content requirements.
3. Condition financial incentives for companies on creating high-quality jobs; institute penalties and clawbacks for companies that fail to meet their commitments to U.S. investments and good jobs; and prohibit participation in these programs for companies that can’t show “clean hands” with the National Labor Relations Board (NLRB), the Internal Revenue Service, and other relevant regulatory bodies.

On all three counts, President Trump is flooring it in the wrong direction. Reversing federal funding for clean vehicle manufacturers and consumers will eliminate the first pillar of a clean vehicle transition that promotes good jobs, stranding more than $145 billion in new U.S. manufacturing investments and accelerating the decline in market share for domestic truck and parts manufacturing.

The demand for clean trucks will still be there. Although Trump has nixed clean vehicle targets for future new sales, 35 other countries—along with U.S. states, cities, and a range of private-sector manufacturers, fleet owners and operators, utility and infrastructure providers, and capital investors—have pledged to reach 100% clean truck and bus sales by 2040. But without a sufficient U.S. manufacturing base and workforce, that new demand will be met by foreign suppliers. Legacy ICE producers will be faced with dwindling market share and deteriorating production economies squeezing profits.

Figure A illustrates the potential harm of repealing the clean vehicle incentives from the Inflation Reduction Act (IRA). Pulling supply- and demand-side supports from the industry would result in nearly half a million fewer clean energy trucks and buses produced domestically through 2032, relative to the baseline scenario. This would cost more than 35,000 job-years (a quantity requiring one person’s work over one year) in truck assembly and parts manufacturing of ICE and clean vehicles and shrink the industry by nearly $16 billion. Conversely, we find that continuing with federal support for clean vehicles and tightening content rules to increase domestic market share would result in an additional 112,000 trucks and buses made in the United States, and an additional 171,000 job-years.

Figure A

Trump’s track record on the other two pillars is similarly unpromising. Although he made trade competition a signature policy campaign of his first term, the situation facing medium- and heavy-duty vehicle manufacturing got worse. Trump renegotiated the North American Free Trade Agreement (NAFTA), but his United States-Mexico-Canada Agreement (USMCA) preserved the fundamental flaws that empower multinational producers to threaten and actually relocate work to lower-wage and more readily exploitable places like Mexico. Trump left gaping loopholes in USMCA’s “Rules of Origin,” allowing foreign content to enter duty-free into U.S. markets without offering the same market-opening to U.S. producers—a loophole ripe for exploitation by heavily subsidized Chinese producers. And when it came to Chinese producers, Trump’s Phase 1 trade deal failed to meaningfully address any U.S. structural economic concerns. Will Trump’s second term be any different? So far, his tariff bluster seems to be aimed more at leveraging tariffs for international bargaining over non-economic issues rather than protecting good jobs from unfair trading practices.

Since USMCA was signed into law, wages for U.S. motor vehicle production workers have fallen more than 7% after inflation. Meanwhile, U.S. imports from Mexico of medium- and heavy-duty trucks increased 500% and imports of motor vehicle parts increased 150%. After growing steadily since July 2009, overall employment in motor vehicles and parts fell in the first Trump administration while also shifting employment to states with lower wages and worker protections. Trump led relentless attacks on workers’ rights during his first administration, and when he had an opportunity to support striking autoworkers in 2023, he criticized them and spoke at a non-union factory. Now, the president is working closely with union-buster and Tesla, Inc. CEO Elon Musk, who could shape Trump’s policies to squeeze his competitors out of the marketplace.

Will Trump realize he is taking the wrong turn for the future of good jobs building trucks in the United States? Workers in truck manufacturing communities and the rest of the world awaiting critical climate solutions like clean vehicles will be holding our breath.

Glossary of acronyms and initialisms

BEV: Battery electric vehicle

CHIPS: CHIPS and Science Act of 2022  

EV: Electric vehicle

FCEV: Full cell electric vehicle 

ICE: Internal combustion engine

IRA: Inflation Reduction Act of 2022

MHDV: Medium- and heavy-duty vehicles, inclusive of Classes 4–8 trucks and buses

NAFTA: North American Free Trade Agreement of 1994

USMCA: United States-Mexico-Canada Agreement of 2020

Medium- and heavy-duty vehicles—big trucks and buses—are a backbone of economic life in the United States. Transitioning these vehicles from internal combustion engines (ICE) to low- and no-emission technologies is a critical step for eliminating greenhouse gas and other toxic emissions from the transportation economy. At the same time, this transition could have serious implications for the ICE vehicle manufacturing industry and auto workers.

The auto manufacturing industry was once a dependable source of good, union jobs capable of sustaining middle-class communities—particularly for workers without a four-year university degree. But these jobs have deteriorated in quantity and quality thanks to decades of corporate outsourcing and union-busting; bad trade policies; rising foreign competition; and short-sighted corporate governance strategies which caused the 2008 automotive industry crisis.1

Combined, these factors created a generation-long drain of jobs from U.S. motor vehicle industries, applying unrelenting downward pressure on the quality of jobs that remained with predictable reverberations to local economies that have borne the brunt of industry restructuring.2 After 2008, average wages in the industry fell sharply while corporate profits, executive compensation, and stock buybacks soared and crowded out investment in the technologies, manufacturing capacity, and workforce development to compete for the clean vehicle future.

Now that future is upon us. If done right, the transition to manufacturing clean trucks and buses presents a rare opportunity to reverse these trends and revitalize long-beleaguered industries to expand investment, create jobs, and raise incomes in the United States. If done wrong, the transition risks exacerbating the current trends that see companies moving production offshore or to U.S. states embracing anti-worker policies, threatening the security of the good jobs that remain.

This report assesses the potential impacts of a transition on employment, output, and labor incomes in clean truck and bus manufacturing supply chains by modeling a range of policy scenarios from 2024–2032 to understand what is required to secure a just transition for legacy auto workers and new entrants to the workforce. Our analysis shows that a just transition, broadly, must target three things:

1. Maintaining a strong public commitment to low and no-emission vehicle transition, including supply-side and demand-side measures to overcome endemic market failures in the development and deployment of new clean vehicle technologies.
2. Increasing the domestic market share and domestic content share for clean vehicle components in made-in-America trucks and buses by tackling the problems of bad trade policies and strongly tying financial incentives to domestic content requirements.
3. Ensuring that newly created jobs are good jobs with program requirements for companies receiving financial incentives to make them good jobs; penalties and clawbacks for companies that fail to meet their commitments; and prohibitions from participating in programs for companies that can’t show “clean hands” with the National Labor Relations Board (NLRB), the Internal Revenue Service, and other relevant regulatory bodies.

The transition toward clean trucks and buses began in earnest under the Biden-Harris administration, with the 2021 Infrastructure Investment and Jobs Act, 2022 Inflation Reduction Act (IRA), and 2022 CHIPS and Science Act making big strides towards the first target. Together, this legislation allocated billions of dollars toward supporting manufacturers to make low- and no-emission heavy-duty vehicles and components, supporting owners of public and private fleets to purchase them, and building charging infrastructure to power them.3 While the Biden-Harris administration sought to attach highroad labor and domestic content standards to the tax incentives, grants, and no-interest loans to promote clean vehicles, these fell by the wayside in legislative horse-trading needed to pass the U.S. Senate.4 As a result, the law provides policymakers little leverage to hold recipients of billions of subsidies accountable, significant shares of which are flowing to companies that do not meet domestic content requirements or are expanding investments in states with anti-worker policies, undercutting goals two and three.

Now, the Trump administration is moving to drastically reorient the federal policy approach to clean vehicles by freezing disbursement of support for clean vehicle manufacturing provided by the Inflation Reduction Act and other legislation.5 This would rob the resources necessary to incentivize rapid development of domestic clean vehicle manufacturing capacity at a time when consumer demand is shifting away from ICE vehicles.6 And although President Trump took some major actions on trade in his first administration, these failed to reverse the long-term decline in motor vehicle manufacturing jobs and communities, or to advance worker rights more broadly:

• Though pledging to fix the North American Free Trade Agreement (NAFTA), Trump’s United States-Mexico-Canada Agreement (USMCA) left in the fundamental flaws that allow multinational corporations to shift production to low-cost, low-standard locations and create loopholes to import foreign content into North American supply chains. Both bolster employers’ credible threats of outsourcing or closing plants to suppress wage demands from workers in U.S. (and Canadian) manufacturing facilities.
• USMCA’s leakage problem—allowing non-USMCA content to count as being “Made in North America” in qualifying for lower tariffs—undercuts U.S. and North American workers by pitting them in competition against non-USMCA producers with lower labor, environmental, and consumer safety standards and without extending reciprocal market access to similar U.S.-based producers. Under USMCA rules, such content can even qualify for U.S. taxpayer subsidies under IRA policies.
• Since USMCA was signed into law, wages for American motor vehicle production workers have fallen more than 7%, after inflation. Meanwhile, U.S. imports from Mexico of medium- and heavy-duty trucks increased 500% and imports of motor vehicle parts increased 150%.
• Overall employment in motor vehicles and parts lost nearly 8,000 jobs in the first Trump administration. And the significant geographic churning of domestic employment toward lower-wage, non-union jobs in Southern U.S. states contributed to the decline in quality of the remaining jobs in the sector.7
• Looking forward, state-supported Chinese electric vehicle (EV) producers are positioning to exploit loopholes Trump left in USMCA that enable them to penetrate North American motor vehicle supply chains at the same preferential tariff rates as North-American-based producers, without having to compete under reciprocal opening in their home market. By routing through Mexico, Chinese producers will be able to circumvent the 60% blanket tariff President Trump proposed.
• Trump appointees to the NLRB led unprecedented attacks on workers’ rights, overturning long-established precedents, and empowering employers over workers at every turn.8
• In 2023, then-candidate Trump voiced criticisms of striking auto workers and avoided their picket lines in favor of speaking to workers at a non-union factory.9
• Trump and Tesla, Inc. CEO Elon Musk, the world’s largest EV-maker and one of just a handful of e-truck makers, are vocally anti-union, which suggests a Musk-influenced vehicles policy will not prioritize job quality.10 Moreover, Musk has not been shy about advocating for policies that will benefit his company and harm his competitors, even though these policies would be net negative for the US vehicles manufacturing sector as a whole.

Our modeling results show that eliminating financial support and domestic production incentives would fail to meet the three criteria for a clean vehicle transition and result in the worst possible outcome for industry workers and their communities. Not only will current producers fail to seize opportunities to develop new clean vehicle business—making U.S. truck consumers increasingly dependent on foreign technology leadership—but they will also face increasing cost pressures and a declining market share for ICE vehicles at the same time, giving an opportunity for new and foreign clean vehicle manufacturers to leapfrog incumbent domestic producers.

The real way to achieve a just transition to manufacturing clean vehicles is to expand the domestic content and market share for medium- and heavy-duty vehicles produced in the United States, while leveraging substantial public investments to raise job quality across the industry. After surveying the landscape for jobs in the U.S. truck and bus manufacturing industries, the report presents and compares analyses of potential economic futures under varying transition policy scenarios. We conclude with an overview of the policies needed to achieve a just transition in U.S. truck manufacturing—and looming over all these will be the deadline for the United States and partners to reauthorize USMCA in 2026, and a potential opportunity to fix some of these problems. 

Summary findings

• U.S. truck and bus producers face intensifying competition from lower-wage countries, subsidized imports, and corporate offshoring. In 2023, the U.S. imported more than 14 times as many trucks and buses (342,000 units) as in 2007—11,100 units more than produced domestically, with nearly 90% of imports from Mexico.11
• Employers continue issuing credible threats to shutdown factories and relocate production in order to suppress wage demands at home, made possible by the rapidly deteriorating trade position under USMCA. Since 2020, major employers in truck supply chains—like Volvo Group’s Mack Trucks, Daimler Trucks, and Stellantis—have made threats to their workers, announced plans to move production offshore, or implemented relocation plans.12
• State-supported Chinese clean vehicle and component producers are positioning to exploit gaping loopholes left in USMCA motor vehicle content rules going forward. Overall, the Chinese foreign direct investment (FDI) foothold in Mexico grew more than 560% since 2016 and imports of core Chinese-made parts to Mexico, like chassis with engines and bodies and cabs, increased by 132 times and 670 times, respectively, since the start of the 2009 business cycle expansion. This loophole is not just open to Chinese producers. And while we have yet to see importation of complete, Chinese-made trucks or buses from Mexico, U.S. policymakers should anticipate such a probabilistic future scenario and take steps to offset the effects of bad trade policies and market-distorting Chinese-government subsidies.
• Eliminating support for clean energy vehicles would undermine domestic manufacturing industries. Revoking the IRA and related policies would kill support for manufacturing clean energy vehicles and components—stranding $145 billion in new investments and costing more than 35,000 job-years (a quantity requiring one person’s work over one year) in truck assembly and parts manufacturing of ICE and clean vehicles. In total, nearly half a million fewer clean energy trucks and buses would be produced domestically through 2032.13 This would also likely mean loss of market share for domestic content components in diesel gasoline-powered trucks and buses because legacy producers not benefitting from the clean vehicle transition will face deteriorating economies of scale in ICE vehicle production.
• For a just transition, clean energy trucks and buses must be built in the U.S. with good union jobs. Relative to current market expectations, building on current policies to better incentivize investments in domestic production and high-quality jobs could yield an additional 172,000 job-years, building at least 477,000 more clean energy trucks and buses at union wages in the United States through 2032.
• Most of these jobs (79%) would not require a college degree, and with union representation, these workers can earn middle-class wages and comprehensive benefits.

• Better wages for manufacturing workers mean better economic outcomes. Contrary to what many companies claim, it is possible to pay workers good, union wages and provide them benefits while transitioning production lines to clean trucks. We find that widespread unionization with policies to onshore truck and bus manufacturing would increase output and wages throughout the domestic supply chain by $85.9 billion and $28.8 billion, respectively. Building more trucks and buses with more workers is good for workers, good for the communities where these high-quality jobs are located, and good for the environment.

Why we wrote this

Medium- and heavy-duty vehicles are a backbone of economic life, transporting the goods, services, and people working in our economy.14 With 23 million vehicles on the road driving 430 billion miles annually, these trucks and buses serve as essential links in the chains that deliver the goods and services to people and businesses, propelling economic activity.15 Motor vehicle manufacturing employment more broadly is a critical driver of overall economic activity in the United States: Each job in the industry supports 10 additional jobs and three times the output throughout the rest of the economy.16 

But the prevalence of big trucks and buses throughout the economy also carries substantial environmental—and, as a result, economic and public health—consequences. In the United States, the transportation sector is the single largest source of greenhouse gas emissions, with trucks and buses accounting for about one-fourth of those emissions, despite being just 6% of the vehicles on the road.17 Beyond global climate effects, localized air pollution from the transportation sector comes with substantial economic costs that go beyond individual health outcomes—costs borne disproportionately by the 120 million people living in low-income communities and communities of color, often in marginalized proximity to concentrated sources of emissions.18 Such chronic and pervasive exposure to toxic emissions carries macroeconomic implications for human capital accumulation and long-term productivity growth.19

Tailpipe emissions from trucks and buses account for one-fourth of total transportation emissions, in turn one-fourth of U.S. emissions from all sources, and have grown 2.2% annually, on average, since 2000.20 And the consequences for our looming climate crisis are driving an unprecedented global transition to electrify transportation—the eventual replacement of fossil fuel-powered vehicles with no-emission vehicles powered by onboard rechargeable batteries or fuel cell systems that convert hydrogen gas to electricity.21 That’s why 36 countries, including the United States, have pledged to reach 100% clean truck and bus sales by 2040, along with subnational entities like California, New York City, and a wide range of manufacturers and suppliers, fleet owners and operators, utility and infrastructure providers, and private capital investors.22

Achieving this transition will require further development of a wide range of technologies. Innovations will be required for producing the different component parts necessary for electrified vehicles, as well as for the development and installation of information technologies and capital equipment needed to manufacture those components at scale. What’s more, success will require equally ambitious and complementary investments to upgrade and expand renewable energy supply chains on which clean vehicle operations will rely—generation, storage, transmission, and distribution to end users. The challenges of clean vehicle industry development are too complex for traditional policy silos and will require policymakers to take a coordinated approach to industrial policy in order to achieve a just transition.

The stakes of failing to achieve a just transition are high given rising competition to control markets for medium- and heavy-duty vehicle manufacturing. Already, Trump’s USMCA continues NAFTA’s drain of jobs and employers’ ability to suppress worker demands with threats of relocation. But the international competitive environment is shifting and poised to disrupt U.S. markets with vehicles produced in USMCA countries but supplied by a rapidly growing overseas network of Chinese parts producers exporting market-distorting subsidized products to the United States. Without additional policy actions, the U.S. risks experiencing another “China shock”-level event, which decimated manufacturing communities across the country, focused on the broader motor vehicle manufacturing industry.23 This will mean loss of jobs and downward pressure on wages and standards in the jobs that remain, leaving U.S. labor markets and transportation supply chains exposed to risks of international disruption.

Achieving a just transition entails a significant public sector role to manage the transition: creating demand for new investments; retooling legacy internal combustion engine production facilities and training the workforce to produce the clean vehicle goods of the future; striking the right balance in foreign trade; and providing financial bridges to small and medium employers who will face less favorable access to capital markets and steeper challenges in navigating the transition. Failing to pursue a robust and comprehensive clean vehicle agenda is likely to leave workers and the industry’s small and medium enterprises in the lurch.

Sharpening international competition for and offshoring of truck and bus manufacturing

Natural barriers to trade due to the size and weight of MHDVs, as well as the importance of proximity to consumers demanding high degrees of customization, have long insulated U.S. truck and bus manufacturing industries from more intense trade competition—although parts producers in the supply chain have certainly not been immune to pressures from outsourcing and offshoring, with subsidized foreign steel and aluminum content taking a heavy toll. But now international competition is sharpening as the world races toward a transition to clean vehicles, and Chinese producers have begun establishing manufacturing footprints for homegrown Chinese firms and hallmark brands around the world.24 Supported by wide-ranging government subsidies and lax labor, environmental, and consumer protection regulations, a growing new presence of Chinese state-supported motor vehicle manufacturing on America’s doorstep portends a critical challenge to U.S. producers.

President Trump made trade competition a signature economic policy of his first term, although outcomes from his agenda largely failed to address these challenges.25 While Trump created an opportunity to renegotiate NAFTA, an agreement that had long plagued U.S. motor vehicle and parts workers, its replacement failed to rebalance trade or to address NAFTA’s fatal flaws that empower multinational producers to threaten and actually relocate work to lower-wage and more readily exploitable places like Mexico. Rules designed to promote North American production set too low a threshold for determining what counts as North American content to qualify for duty-free treatment in North American trade were not designed to effectively incentivize use of higher-wage local content in manufacturing vehicles.26

Tariffs Trump imposed in his first term aimed to tackle the challenge of state-supported exports of Chinese technology goods, including many categories of motor vehicle parts. Separate global tariffs on steel and aluminum products bound on Chinese exporters, who have upended global markets with strong state support.27 But the main effect was not to deter imports from Chinese-oriented motor vehicle supply-chains, but to divert their production to third countries subject to more favorable tariff treatment by the United States. A surge of outbound Chinese FDI and exports of manufacturing equipment followed, accompanied by surging U.S. imports of motor vehicle parts from countries where Chinese producers expanded their offshore export platforms, including Mexico, Thailand, India, Indonesia, Malaysia, the Philippines, and Vietnam.28 In Mexico, nearly one-fourth of Chinese FDI in late 2023 flowed to the auto industry.29

Figure A illustrates this rising import competition in trucks and buses in recent years, most notably the sharp growth in imports from Mexico, particularly after USMCA.30 In 2007, prior to the Great Financial Crisis and the 2008 U.S. auto industry crisis, the U.S. imported a mere 24,000 MHDVs (less than 10% of U.S. production) with two-thirds of these imports coming from Canada.31 Following the economic recovery after 2009, increasing truck and bus production in Mexico largely displaced Canadian production to serve an expanding share of the U.S. market. Amid this race to the bottom, truck and bus imports from Mexico grew to nearly 98,000 units by 2019—92% of total truck and bus imports—with imports from Canada amounting to less than 6% of total imports, and those from the rest of the world amounting to less than 3%. In total, imports grew to represent 31% of U.S. MHDV production.

By 2023, the United States imported more than 342,000 trucks and buses—88% from Mexico, or 11,100 more units than were produced domestically. This dramatic shift largely reflects growing outsourcing and migration of traditional U.S. producers to Mexico. This dynamic may be poised to change in coming years as a result of the increasing penetration of Chinese manufacturing foreign direct investment in Mexico seeking sidestep U.S. trade enforcement measures.32 With an early start and heavy subsidization under the 2013 “Made in China 2025” policy, China has become the world’s largest producer of and market for clean energy vehicles, and established supply chain dominance in critical clean vehicle components, particularly in the minerals, anodes, cathodes, and cells that go into storage batteries.33

Figure A

Facing U.S. tariffs on a wide range of manufactured and technology goods and steel and aluminum products, as well as broader trade policy efforts to uphold U.S. steel and aluminum producers, Chinese firms began shifting production chains toward countries with more favorable tariff treatment. From 2018 to 2022, Chinese firms increased their direct investments in Mexico by 126%, and their exports of manufacturing equipment to Mexico increased 134% over their pre-tariff level.34 Chinese outbound investment and export of manufacturing machinery show a similar pattern with countries that have shown surging motor vehicle parts exports to the U.S. in the years following 2018 tariffs: Thailand, India, Vietnam, Malaysia, and Indonesia, among others.35 This is less an example of trade diversion (changing trade partners to the next lowest-cost country) than of production diversion—rerouting production in Chinese supply chains through third countries to gain preferential access to U.S. markets. And the most preferred access comes through USMCA partners Mexico and Canada.

A misguided USMCA panel ruling in December 2022 already undercut stronger “rules of origin”—i.e., measures to ensure that imports receiving the best access to North American markets are made with significant North American-originating (“regional value”) content, by workers earning decent wages—in the renegotiated agreement. This ruling enables substantial non-North American content to enter North American motor vehicle supply chains in vehicles that qualify for duty-free entry to U.S. markets. The more complicated an intermediate part is (i.e., the more it incorporates lower-tier components), the more foreign content can masquerade as being “Made in North America.”

USMCA was negotiated prior to policy and industry commitments to the clean vehicle transition, leaving key components and technologies inadequately addressed in existing USMCA rules of origin. The leakage to non-USMCA content undercuts U.S. and North American workers by pitting them against foreign producers operating without the same commitments to worker, environmental, and consumer safety standards—and without similarly extending reciprocal market access to U.S.-based producers. What’s more, this subterranean content can qualify for clean vehicle tax credits subsidized by U.S. taxpayers under the IRA.

Chinese clean energy vehicle and parts manufacturers are poised to exploit this foothold into USMCA markets. Already, the United States is facing surging motor vehicle parts imports from countries where Chinese producers are expanding investments in manufacturing, but complete Chinese-branded vehicles produced in Mexico are not far behind with potential for severe disruption of established producers.36 And the United States is not the only country facing risks from surging, subsidized Chinese vehicle and part imports. Following a nearly year-long investigation into Chinese electric vehicle subsidies, the European Union levied countervailing tariffs of up to 45.3% on imported Chinese vehicles.37

The case of Chinese company BYD is instructive. From an upstart mobile phone battery company that manufactured its first car in 2005, BYD is now the world’s largest EV manufacturer and the world’s second largest EV battery producer.38 BYD is already a manufacturer of battery electric vehicle (BEV) school buses in Canada and school, coach, and transit buses in the United States. These projects began with promising community engagement and $39 million in taxpayer funds but devolved into recriminations of broken promises over the number and quality of jobs created and community benefits delivered.39 A range of BYD battery electric Class 6 and Class 8 trucks are already available in the U.S. market—more models than any other clean energy vehicle manufacturer is offering.40

BYD’s current dominance in the market for light passenger vehicles should serve as a harbinger of the potential for the company—among others benefitting from direct and indirect Chinese government support—to undercut U.S. and global markets for trucks and buses as well. Analysis released by industry benchmarking firm A2Mac1 shows that BYD markets essentially the same battery electric car (the Dolphin) in both the Chinese and European Union markets, but what retails for around $14,000–$15,000 in China is priced at $33,000–$35,000 in Europe—in line with the lowest priced BEVs in the market.41 Even after accounting for slight modifications to the vehicle to comply with higher European safety standards, taxes, and transportation costs, A2Mac1’s piece-by-piece teardown of the vehicles in the two markets finds that BYD is earning roughly $7,400 in profit on each unit sold in the EU.

These super profits owe to BYD’s unparalleled low costs of production, only made possible by a complex set of complementary Chinese government policies. To be certain, BYD has produced a number of cutting-edge product and process innovations that have made the company a technological leader, but they have done so with the benefit of robust and comprehensive industrial policies providing favorable access to credit and land; tax and regulatory forbearance; investments in critical mineral development and refining; investments in workforce development; demand-side policies providing consumer incentives and charging infrastructure; and suppression of worker rights, health, and safety concerns.

At present, BYD is content to reap these profits rather than upend market structures with price wars that are now squeezing other electric vehicle manufacturers.42 Insulated from the same kind of financial market pressures to return short-term profits to investors faced by peer companies in the United States, BYD can instead expand on their competitive lead by returning those earnings to investment in developing new technologies and markets for their products.43 But the mere realization of such super profits signals to competitors BYD’s ability to wage a decisive price war, which is certain to deter future investments by others or potential new entrants in the market for clean energy vehicles without a change to the market dynamic.

The situation for clean trucks and buses will be no different. Without additional policy actions to ensure development of viable domestic clean vehicle manufacturing, increasing permeation of BYD and other Chinese motor vehicle assembly and parts firms in Mexican manufacturing with potential preferential access to U.S. markets through USMCA is set to sharply disrupt U.S. truck and bus (and light-duty vehicle) manufacturing.

Assessing the jobs and economic impact of battery electric (and fuel cell electric) trucks and buses

Our modeling analysis focuses on how U.S. industry employment and output in truck and bus manufacturing and supply chain industries would be impacted by strengthening or curtailing policies intended to promote onshoring of domestic clean vehicle manufacturing, high-quality union jobs, and financial support for infant clean vehicle industries. We use the IMPLAN input-output model to assess the impacts of a shift from manufacturing diesel trucks and buses to ones with battery electric or fuel cell electric powertrains and a range of policy scenarios over the medium-term outlook from 2024–2032. Input-output models divide the economy into constituent industries and trace the complex interdependencies between them—546 discrete industries in IMPLAN’s case.44

In this report, we limit our consideration to impacts on the truck and bus assembly industry and the business-to-business purchases of inputs required for manufacturing of final vehicles, and so on down the supply chain. This excludes so-called “induced effects” on the macroeconomy created when workers directly engaged in truck and bus supply chains spend their incomes, which can—statistically speaking—suffer from aggregation bias in such analysis.

We take S&P Global Mobility’s Medium- and Heavy-Commercial Vehicle Forecast as the baseline scenario for our analysis against which to measure impacts of potential policy changes.45 S&P Global Mobility surveys market participants and producers; their database covers more than 95% of global MHDV production at the plant and vehicle model level for medium- and heavy-duty trucks and buses (Class 4–8 vehicles), a representation of which is pictured in Table 1.46 In total, S&P Global projects U.S. production of nearly 3.9 million MHDVs from 2024–2032, including nearly 600,000 battery electric vehicles and 115,000 full cell electric vehicles (FCEVs). Under current expectations and market and policy conditions, S&P Global projects that by 2032, 28% of U.S. heavy truck production will be clean vehicles and 42% of medium-duty trucks and buses will be clean energy-powered.47

Table 1

BEVs and FCEVs are too new to receive unique treatment in the IMPLAN model’s array of industries. Therefore, first we must estimate the requisite component inputs for these new manufacturing industries. This goes well beyond just the different powertrains propelling the trucks and buses forward—batteries, motors, and fuel cell systems. E-drive systems in both battery electric vehicles and full cell electric vehicles necessitate redesigning chassis to accommodate battery and electrical systems. Essential functions powered by the burn of a diesel engine like power-steering and power-braking, cabin and cargo HVAC, and thermal management all need to be adapted to high-voltage electrical systems. Upgraded tires are needed to handle additional torque at the wheel from e-drive and regenerative braking. All of this requires using substantially more semiconductors and related content than are found in a clean energy vehicle’s diesel counterpart.

Technological advances in recent years, in tandem with increased investments to meet growing consumer demand for clean vehicles, will bring light-duty BEVs to cost parity with diesel vehicles—even before accounting for current IRA consumer tax incentives—and medium- and heavy-duty clean energy vehicles are not far behind.48 Industry executives regularly claim that BEVs will require 30–40% less labor content than diesel internal combustion engine vehicles.49 Auto executives certainly should have inside information on the production engineering process, but they also have incentives to mislead shareholders (about the potential costs of the transition) and workers (in order to suppress wage demands).

However, independent engineering data do not bear out this reduction in labor content required for clean vehicle production, suggesting that EVs should be expected to embody more labor content than ICE vehicles.50 As a result, it is reasonable and conservative to treat the labor content of ICE and BEV vehicles to be roughly equivalent. Still, such technical engineering analysis leaves open the questions of where and under what conditions those alternative powertrain components will be developed and produced.

Beginning with IMPLAN’s model for ICE heavy-duty vehicle manufacturing, we adjust the contributions of various motor vehicle input industries to substitute costs for components that will replace existing diesel parts. The International Council on Clean Transportation and Ricardo, Plc., a private motor vehicle industry consulting group, provide a teardown analysis identifying cost breakdowns for clean energy components relative to other costs of a complete vehicle, as well as future cost trajectories, as technologies and manufacturing economies of scale improve in the near term.51 Replacing—or, in some cases, supplementing—industry inputs to diesel truck and bus manufacturing with content for low- and no-emission vehicles and scaling overall costs to 100% allow us to create new clean energy vehicle industries that can be modeled within IMPLAN. Thus, we can jointly model the impacts of projected U.S. trucks and buses production for nine discrete groups of vehicles: medium- and heavy-duty trucks and buses produced with diesel, battery electric, and fuel cell electric powertrains.

The baseline S&P Global forecast embodies the current policy environment under Biden-Harris administration policies, as well as market expectations for truck and bus, consumer preferences for drivetrains, and the landscape of international competition within motor vehicle supply chains. We then vary these assumptions in a variety of scenarios to test the impacts of different possible directions for U.S. clean energy vehicle manufacturing policy on employment and output:52

1. 50% clean truck and bus adoption: The U.S. has joined a group of 36 nations pledging 100% of new sales will be clean trucks and buses by 2040.53 Given the rapidly converging cost differences and expected lower total cost of operation for clean energy vehicles, as well as private sector commitments to decarbonize and reduce operational costs, we consider an intermediate scenario where adoption of electrified trucks and buses may outpace S&P Global projections.54 Here, we assume that U.S. output of clean trucks and buses reaches 50% of the total by 2032—with increased production primarily coming from more BEVs—as opposed to the 28% for heavy-duty trucks and 42% for medium-duty trucks and buses currently predicted by S&P.
2. Baseline + increased domestic market share: Unlike the IRA’s Section 30D light-duty clean vehicle tax credits, clean commercial vehicles qualifying for up to $40,000 each under Section 45W do not come with the same requirements for North American assembly or for critical mineral and battery components. To test the potential impact of policies incentivizing increased domestic production of complete trucks and buses and parts, we assume a 10% increase in U.S. production with a doubling of U.S.-originating content in storage battery production.
3. 50% clean trucks and buses + increased domestic market share: This scenario applies the assumption of increased domestic market share in the second scenario with the assumption of more rapid end-user clean vehicle adoption.
4. Scenario 3 + widespread unionization. As discussed above, policies supporting the development of clean energy truck and bus manufacturing industries eschewed requirements that public resources be used to support good jobs. Although political compromise necessary to pass legislation stripped motor vehicle manufacturing workers of labor protections extended to construction work, there are a variety of policy options available that can ensure public resources are being used to support good jobs and not just corporate profits. To test this scenario, we adjust total labor income in the truck and bus manufacturing industry to a union-equivalent rate, based on the current union-wage premium and industry unionization rate, while holding employment constant.
5. Trump’s likely approach: retreat from the clean vehicle transition. Despite the pressures from ballooning greenhouse gases and other toxic emissions from trucks and buses and the rapid expansion of private investment into U.S. clean vehicle manufacturing, not a single Republican official supported IRA legislation. Now, many have pledged to undo public policies supporting this green transition—President Trump, Sen. John Barasso, Sen. Shelly Moore Capito, Rep. Cathy McMorris Rodgers—and at least nine Republican-sponsored bills would repeal or rescind IRA programs.55 In this scenario, we assume the loss of support for investment in domestic manufacturing cuts the domestic content shares of key clean vehicle components by as much as one-half, while loss of demand-side tax credits for MHDV purchases and declining production efficiencies at lower-scale operations cut U.S. clean vehicle production to one-fourth of the S&P Global baseline. Disruption and uncertainty from the policy reversal make consumers less likely to choose low- and no-emission powertrains over diesel trucks and buses, and those opting for clean vehicles are more likely to be supplied by foreign manufacturers or by domestic manufacturers using significantly higher foreign parts.

Results

Figures B–D present visualizations of our topline modeling results for employment, labor income, and economic output impacts, respectively, relative to the S&P Global baseline scenario. When interpreting these results as a whole, it is important to keep in mind that truck manufacturing is an unusually high capital-intensive activity, where a relatively small number of workers can produce large value of output. In Scenario 1, where we assume faster than expected adoption of clean trucks and buses (50% of the market by 2032), employment in truck and bus manufacturing would increase by more than 31,000 job-years while employment in truck and bus supply chain industries would increase by more than 93,000 job-years. Combined, a more rapid expansion of clean truck and bus adoption in the U.S. market would support nearly 125,000 more job-years of work in motor vehicle and parts manufacturing than the status quo. As a group, these workers will earn $11.2 billion over this time. Reaching 50% clean truck and bus adoption by 2032 will mean an additional $61 billion in economic activity in U.S. motor vehicle and parts industries.

Even if the path of clean energy vehicle adoption remains the same through 2032, policies that work to increase the onshore manufacturing and domestic content of U.S. trucks and buses and parts (Scenario 2)—resulting in more domestic manufacturing activity for the same quantity of vehicles—will also improve the situation of workers and businesses in the industry. Increasing market share for U.S. medium- and heavy-duty motor vehicle and parts manufacturing is a boon for workers in the industry, supporting a total of more than 148,000 additional job-years—more than 33,000 in vehicle manufacturing and 115,000 in supply chains, earning an additional $13.3 billion. In total, output in the industry is expected to increase $72 billion by 2032, relative to S&P Global’s baseline scenario.

With an increased clean vehicle share and increased domestic market share separately improving employment and output prospects for truck and bus manufacturing and parts, it should be no surprise that combining the effects (Scenario 3) yields even more positive results. In this scenario, higher demand for clean trucks and buses combined with greater U.S. production capacity translates into more work and more GDP incentivized by green transition policies, supporting more than 171,000 additional job-years, $15 billion in labor income, and $82 billion in industry output.

Ideally, strong labor protection policies would work in concert with supply- and demand-side policies to support good jobs alongside emerging clean vehicle manufacturing industries as they develop. Thus, we model a scenario (4) where widespread unionization raises wages to union levels, strong U.S. content requirements expand domestic market share by 10%, and consumer preferences bring clean trucks and buses to a 50% market share. Here, we assume the same number of workers is employed assembling these vehicles, but that they are paid a union wage. With labor inputs representing only a marginal share of the total cost of a vehicle, it is expected that firms adjust through a combination of lower corporate profits and executive compensation. Given historic profitability and CEO pay, companies have ample space to absorb these costs.56 In certain market dynamics, producers may be able to pass some of this additional cost onto consumers, but the price difference would be imperceptible—less than the cost of purchasing floor mats with a new vehicle.

In this maximal policy scenario, total employment supported in the industry would increase by 172,000 job-years, paying $19.1 billion in labor income, while output would expand by $85.9 billion over the baseline forecast scenario. These results suggest that policies supporting increased domestic manufacturing and unionization yield 28% more labor income for workers over the status quo. What’s more, rather than adversely impacting business with increased labor costs, unionization increases industry output by 4% relative to merely increasing clean energy vehicle quotas and domestic content (Scenario 3).

By now, we can see a pattern emerging: The stronger and more comprehensive the policy support for a clean truck and bus manufacturing, the greater the overall job and economic benefits we should expect for the industry. However, many conservative politicians—including President Trump—are pledging to undo signature legislation supporting a green transition in motor vehicle manufacturing (Scenario 5). Our analysis shows that such a move creates a lose-lose-lose outcome. A policy retreat from greening U.S. truck and bus manufacturing would cull more than 35,000 job-years from the industry (7,200 in vehicles and 28,000 in parts); drive the loss of $3.3 billion in labor income; and shrink industry output by $15.8 billion relative to the baseline scenario, as the United States misses out on newly resurgent motor vehicle manufacturing industries and becomes reliant on foreign technology and manufacturing imports.

Figure E further shows the damage that such a policy move would wreak. Relative to the baseline scenario, 477,000 fewer trucks and buses would be made in America, compared with an additional 112,000 trucks in Scenario 4. The intuition is clear: producing more vehicles with higher shares of U.S.-made content requires more workers (or work hours) who are paid decent wages. The policy retrenchment from clean vehicle transition proposed by President Trump not only moves in the opposite direction, but it runs counter to global trends. Because the rest of the world will be transitioning to clean vehicles, this could effectively shut U.S. producers out of future truck and bus export markets.

Even these figures likely significantly understate the potential economic costs of a clean vehicle policy retrenchment. Job losses predicted by the IMPLAN model only capture the mechanical production relationships between truck and bus manufacturing and their demands on motor vehicle supply chain industries. We should anticipate in practice, given real-world complexities, that economic uncertainty and chaos in the sector following such a policy whiplash will impose more severe job and economic costs.57 In particular, small- and medium-sized suppliers with less favorable access to credit markets than multinational corporations or subsidized foreign producers will find it harder to adapt to shifting targets and could face elimination from the market.

Our results show that, whether battery- or hydrogen fuel cell-driven, electrifying truck and bus manufacturing with high policy standards is a clear winner for workers and the industry overall. However, it is important to highlight that these results do not suggest that all firms and workers will automatically be winners under the transition to electrified trucks and buses. Workers and plants producing legacy ICE vehicles and parts will need retraining and retrofitting to take advantage of new opportunities; smaller businesses with less favorable access to capital than multinational manufacturers will have more difficulty adapting to these changes. Policies must pay careful attention to both ensure that dislocations from churning are managed to avoid creating political resistance to transition policies or to erode the overall benefits promised by the transition.

Figure B

Figure C

Figure D

Figure E

Policy recommendations and conclusion

Federal incentives to build clean vehicles and their components in the United States and to buy domestically manufactured vehicles have spurred a manufacturing renaissance in this country.58 The future of U.S. truck and bus manufacturing industries will be determined by whether policymakers take steps to ensure a just transition toward manufacturing clean vehicles. President Trump’s move to scuttle financial incentives for U.S. clean vehicle manufacturing will likely accelerate the decline in U.S. truck and bus manufacturing employment and job quality, as well as the communities these support.

This outcome is not inevitable, but could result from a series of bad policy choices that would empower companies over workers. Our modeling shows that another path is possible where clean trucks and buses are made with domestically manufactured components (particularly batteries) and when workers are paid union wages, the economic benefits of a clean truck and bus transition can more than offset losses in sunset ICE manufacturing industries. Doing so will require that policymakers build on current policies and other legislation to tackle problems created by past trade policy mistakes and offer policy support to develop the market for clean vehicles from the supply and demand sides.

For the transition to succeed, broadly, the policy approach must:

1. Maintain a strong public commitment to the low- and no-emissions vehicle transition, including supply-side and demand-side measures to overcome endemic market failures in the development and deployment of new clean vehicle technologies.
2. Increase the domestic market share and domestic content share for clean vehicle components in made-in-America trucks and buses by tackling the problems of bad trade policies and strongly tying financial incentives to domestic content requirements.
3. Ensure that newly created jobs are good jobs with program requirements for companies receiving financial incentives to make them good jobs, penalties and clawbacks for companies that fail to meet their commitments, and prohibitions from participating in programs for companies that can’t show “clean hands” with the NLRB.

Domestic manufacturing requirements and incentives ensure that taxpayer support for the industry ends up supporting good jobs and investment to build the clean trucks of the future and their key components at home, rather than just contributing to corporate profits. Labor protections for manufacturing workers ensure that the permanent jobs are desirable, high-quality, and community-sustaining jobs, where workers have the free and fair choice to join a union.

From this perspective, strong supply-side programs are those that require applicant manufacturers to build clean trucks and batteries in the U.S. and source components from other domestic manufacturers. They require applicants to meaningfully engage with organized labor and together build frameworks to negotiate community benefit and workforce agreements, which pave the path to unionization. Strong demand-side programs drive fleet owners to purchase vehicles only from manufacturers that assemble their vehicles in the United States, and source U.S.-made batteries and other components. They require or incentivize the purchase of vehicles made by union workers, or in facilities where workers have the free and fair choice to join a union.

Specifically, policymakers designing incentives to support clean truck manufacturing and deployment should consider adopting the following policies:

Trade policy recommendations

1. Raise the MFN tariff rate on trucks and buses to incentivize companies to invest and operate in compliance with the North American Rules of Origin requirements—rather than simply choosing to pay the current tariff rate—while tightening these rules to cover critical clean vehicle components and to ensure content is truly made in North America.
2. Leverage the USMCA July 1, 2026 sunset to negotiate to raise standards for wages and working conditions across all three countries by tightening Rules of Origin for what qualifies as “Made in North America,” improving USMCA’s labor chapter, strengthening enforcement of the Labor Value Content calculations, more aggressive implementation of USMCA’s Rapid Response Mechanism to expand labor rights in the region, and establishing meaningful wage standards for manufacturing workers.
3. Restrict any goods subject to China Section 301 and Section 232 tariffs from gaining preferential access to U.S. markets under trade agreements or preference programs, including the USMCA and the Generalized System of Preferences (GSP) granting favorable U.S. market access to select low-income and developing economy countries.
4. Restrict any goods produced by an entity based in, supported by, or owned by a nonmarket economy from gaining preferential access under trade agreements or preference programs, including USMCA and GSP.
5. Proceed quickly on the Department of Commerce, Bureau of Industry and Security’s “connected vehicles” notice of proposed rulemaking (2024) to exclude vehicles and sensitive technology and components from countries of concern from operating in the United States.59

Supply-side policy recommendations

1. Utilize program requirements to ensure that applicant manufacturers have made enforceable commitments to card check neutrality, indicating the company’s pledge to voluntarily recognize and bargain a contract with the union once the majority of workers indicate they would like to be represented by that union. Card check neutrality commitments secure workers’ right to organize without illegal intimidation from employers.60
2. Require applicant manufacturers to submit detailed Community Benefits Plans modeled after the Department of Energy’s Battery Manufacturing & Recycling and Battery Materials Processing Grants, wherein employers are asked to submit letters of support from labor unions and required to build plans that advance community and labor engagement, as well as job quality and worker continuity.61
3. Predicate the awarding of government support for applicant manufacturers on a “clean” record with the National Labor Relations Board, which helps to indicate an employer’s observance of, and respect for, existing labor law.
4. Utilize clawback provisions with penalties to hold applicant manufacturers to their labor commitments on an ongoing basis, and beyond authoring the initial Community Benefits Plan.62

Demand-side policy recommendations

1. Require domestic assembly and domestic content requirements to access clean truck deployment incentives, including grants and tax credits.The current policy for commercial clean vehicle tax credits (Section 45W) available to truck and bus consumers requires neither. For all consumer incentives, ensure that only vehicles undergoing final assembly in the U.S. and with domestically manufactured battery cells (including cell components such as anodes, cathodes, and separators) are eligible.
2. Add additional “bonus” incentives for the purchase of vehicle models assembled in facilities where manufacturing workers are protected by a collective bargaining agreement, as certified by a labor union. Add further incentives for the purchase of vehicle models using battery cells made in union manufacturing facilities, as certified by a labor union.
3. Apply Build America, Buy America to school buses as part of the nation’s critical rolling stock—just like public transit buses and mobile port equipment are now.
4. Implement Build America domestic content rules in a manner that distinguishes batteries and non-battery components. Batteries can comprise more than half of the cost of a clean energy vehicle; as written, current content rules are likely to push other non-battery components (currently or with potential for domestic manufacturing) offshore.
5. Expand Transit Infrastructure Vehicle Security Act restrictions to cover all federal assistance applicable to trucks and buses, currently only applied to Federal Transit Administration and Federal Aviation Administration programs.

Smart industrial policy uses a host of tools—like grants, loans, and tax credits—to proactively shape a nascent industry to maximize particular benefits or realize specific outcomes. The recommendations offered above may, where feasible, be applied to existing programs in future rounds of funding or help to guide the creation of new supply- and demand-side programs at all levels of government.

However, it is important to note that manufacturers are free to contribute to a strong, domestic, and union-dense clean truck supply chain without government intervention or coercion. They can choose to be high-road companies, competing on the basis of the quality of their products—rather than on the low costs of their production processes, materials, and labor. That they have historically chosen not to do so is the reason why smart industrial policy is so essential.

Acknowledgements

The authors would like to thank the following people for valuable input on earlier drafts: Candace Archer, Jim Barrett, Josh Bivens, Katherine deCourcy, Anna Fendley, Ted Fertik, Katherine Garcia, Alice Henderson, Basma Hussein, Eddie Iny, Roxanne Johnson, Jori Kandra, Jennifer Kelly, Alison Kirsch, Stevie Marvin, Terin Mayer, Ray Minjares, Eric Ribbentrop, Ellen Robo, Kevin Rudiger, Megan Sarlin, Luke Tonachel, Yihao Xie, and Peter Zalzal.

Appendix

Appendix Figure A

Appendix Figure B

Appendix Figure C

Notes

1. Frank Levy and Peter Temin, “Inequality and Institutions in 20th Century America,” National Bureau of Economic Research Working Paper no. 13106, May 2007.
Henry S. Farber, Daniel Herbst, Ilyana Kuziemko, and Suresh Naidu, “Unions and Inequality over the Twentieth Century: New Evidence from Survey Data,” Quarterly Journal of Economics 136, no. 3 (August): 1325–1385.
Joel Cutcher-Gershenfeld, Dan Brooks, and Martin Mulloy, The Decline and Resurgence of the U.S. Auto Industry, Economic Policy Institute, May 2015.
Lawrence Mishel and Josh Bivens, Identifying the Policy Levers Generating Wage Suppression and Wage Inequality, Economic Policy Institute, May 2021.
Chandra Childers, Rooted in Racism and Economic Exploitation, Economic Policy Institute, October 2023.
Adam S. Hersh, “UAW-Automakers Negotiations Pit Falling Wages Against Skyrocketing CEO Pay,” Working Economics Blog (Economic Policy Institute), September 12, 2023.
U.S. Bureau of Labor Statistics, All Employees, Motor Vehicles and Parts [CES3133600101], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/CES3133600101, last updated November 1, 2024.

2. The heavy-duty vehicles comprise a unique segment of the industry with its unique challenges, though also sharing some commonalities with the transition in light-duty vehicle manufacturing; for some data, official statistics do not disaggregate between light-duty and heavy-duty industry segments. Where available, we present industry-specific data; elsewhere we rely on higher industry aggregation for motor vehicles and parts manufacturing.

3. The White House, President Biden Announces up to $6.1 Billion Preliminary Agreement with Micron under the CHIPS and Science Act (fact sheet), April 25, 2024.

4. Department of Labor, “Protections for Workers in Construction Under the Bipartisan Infrastructure Law” (web page), accessed May 2024.
Internal Revenue Service, “IRA Prevailing Wage Requirements” (web page), accessed May 2024.
CHIPS for America, Building a Skilled and Diverse Workforce (fact sheet), published February 28, 2023.

5. The White House, Unleashing American Energy (executive order), January 20, 2025.

6. The Economist, “Why Chinese Companies Are Flocking to Mexico,” November 23, 2023.
Meritt Enright, “How China Became the Leading Car Supplier to Mexico and What It Means for the U.S.,” CNBC, August 24, 2024.
Mexico News Daily, “BYD Weighs 3 States for Electric Vehicle Plant,” August 26, 2024.
Elizabeth Machuca, “China’s BYD Plans Expansion Into Mexico, Rules Out U.S.,” Wards Auto, May 24, 2024.
Reuters, “MG Motor to Build Manufacturing Plant, R&D Center in Mexico,” August 8, 2024.
Noi Mahoney, “China-Based Automaker to Invest $3B in Mexico EV Plant,” Freight Waves, April 3, 2023.

7. U.S. Bureau of Labor Statistics, All Employees, Motor Vehicles and Parts [CES3133600101], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/CES3133600101, last updated November 1, 2024.
Chandra Childers, Southern Economic Policies Undermine Job Quality for Auto Workers, Economic Policy Institute, September 4, 2024.

8. Celine McNicholas, Margaret Poydock, and Lynn Rhinehart, Unprecedented: The Trump NLRB’s Attack on Workers’ Rights, Economic Policy Institute, October 16, 2019.

9. Jill Colvin and Tom Krisher, “Trump Goes to Michigan to Rail Against Biden’s Electric Vehicle Push While GOP Rivals Debate,” Associated Press, September 28, 2023.

10. Grant Schwab, “UAW Claims Illegal Labor Threats in X Talk Between Musk and Trump,” The Detroit News, August 13, 2024.

11. Board of Governors of the Federal Reserve System (US), Motor Vehicle Assemblies: Heavy and Medium Truck Assemblies [MVAHMTRCKS], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MVAHMTRCKS, last updated November 15, 2024.

12. AB Volvo, “Volvo Group to Increase North American Heavy Truck Production Capacity,” April 11, 2023.
Rick Holmes, “’Slap in the face’: Union criticizes company’s decision to build some Mack trucks in Mexico,” WFMZ-TV News, April 11, 2024.
Geert De Lombaerde, “Daimler Truck signals production ‘flexibility’ if Trump tariffs require it,” Fleet Owner, November 8, 2024.
Michael Mayland, “Automaker Stellantis has discussed moving pickup truck production from the U.S. to Mexico, union leader says,” CNBC, August 20, 2023.

13. BlueGreen Alliance Foundation, “EV Jobs Hub” (web page), last updated November 2024.

14. Medium- and heavy-duty vehicles encompass Class 4–8 trucks and buses—but not light-duty pick-up trucks like the Ford F-150, Chevrolet Silverado, or Dodge Ram—as well as school, transit, and coach buses; they do not include agricultural machinery or motor homes. Generally, these vehicles have a gross vehicle weight rating (GVWR) above 14,000 pounds and encompass most, but not all, of the list of “Medium- and Heavy-Duty Truck HTS 10-Digit Import Codes,” identified by the U.S. International Trade Administration (2023).

15. Dana Lowell and Jane Culkin, Medium- & Heavy-Duty Vehicles: Market Structure, Environmental Impact, and EV Readiness, Environmental Resources Management, July 2021.

16. Historically, motor vehicle jobs and output multipliers were even higher before so much of the supply chain moved offshore. Industries including wholesale and retail distribution of motor vehicles and parts and maintenance services comprise additional vast industries with broad economic impacts of their own.
IMPLAN (2024). IMPLAN Regions Multiplier Summary.
Josh Bivens, Updated Employment Multipliers for the U.S. Economy, Economic Policy Institute, January 2019.

17. Environmental Protection Agency, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2022, April 2024.
American Lung Association, Delivering Clean Air: Health Benefits of Zero-Emission Trucks and Electricity, October 2022.

18. American Lung Association, State of the Air, April 2023.

19. MHDVs are a major source of nitrogen oxide and particulate matter emissions—smog-forming pollutants that are strongly associated with a wide range of poor health and individual development outcomes, including adverse childhood cognitive and health development; increased incidence of chronic cardiovascular disease; and cancer. And these costs tend to be disproportionately borne by historically disadvantaged groups, often living in marginalized proximity to concentrated sources of emissions. Roughly 72 million people in disproportionately low-income communities and communities of color live in “fenceline” communities near warehouses, ports, railyards, airports, and major freight routes and highway corridors that experience heavy MHDV traffic. Particularly in the case of MHDVs, the American Lung Association (ALA) estimates that a full transition to zero-emission MHDVs by 2050 in just the U.S. counties with the highest levels of MHDV traffic would yield up to $735 billion in public health benefits. More specifically, ALA estimates that a full transition to zero-emission MHDVs by 2050 could avoid more than 8,500 lost workdays, 1.75 million asthma attacks, and 66,800 premature deaths. When including the impact of electrifying light-duty vehicles as well, these numbers increase to 13.4 million lost workdays, 2.78 million asthma attacks, and 110,000 premature deaths.
American Lung Association, Delivering Clean Air: Health Benefits of Zero-Emission Trucks and Electricity, October 2022.
Environmental Protection Agency, “Final Standards to Reduce Greenhouse Gas Emissions from Heavy-Duty Vehicles for Model Year 2027 and Beyond” (regulatory announcement), March 2024.
American Lung Association, Zeroing in on Healthy Air, March 2022.

20. International Energy Agency 50, “Trucks and Buses” (web page), accessed May 2024. 

21. A similar transition is underway in passenger vehicles and light trucks, with much overlap of producers in light-duty and medium- and heavy-duty motor vehicle supply chains.
International Energy Agency 50, “Trucks and Buses” (web page), accessed May 2024.

22. Global Commercial Vehicle, “Global Memorandum of Understanding on Zero-Emission Medium- and Heavy-Duty Vehicles” (web page), accessed May 2024.

23. EPI analysis of the Current Population Survey Basic monthly microdata, EPI Current Population Survey Extracts, Version 1.0.52 (2024), https://microdata.epi.org.

24. International Energy Agency 50, Global EV Outlook 2023, April 2023.

25. Trade in steel and aluminum products offers some exception. 
Adam S. Hersh and Robert Scott, Why Global Steel Surpluses Warrant U.S. Section 232 Import Measures, Economic Policy Institute, March 2021.
Adam S. Hersh and Robert Scott, Aluminum Producing and Consuming Industries Have Thrived Under U.S. Section 232 Import Measures, Economic Policy Institute, May 2021. 

26. Adam S. Hersh, “Testimony prepared for the U.S. International Trade Commission report on the USMCA Automotive Rules of Origin,” October 16, 2024.
Adam S. Hersh, “EPI comments to the Office of the United States Trade Representative on the US-Mexico-Canada Agreement with respect to automotive goods,” January 22, 2024.

27. Adam S. Hersh and Robert Scott, Why Global Steel Surpluses Warrant U.S. Section 232 Import Measures, Economic Policy Institute, March 2021.
Adam S. Hersh and Robert Scott, Aluminum Producing and Consuming Industries Have Thrived Under U.S. Section 232 Import Measures, Economic Policy Institute, May 2021. 

28. Adam S. Hersh, “EPI comments to the Office of the United States Trade Representative on the US-Mexico-Canada Agreement with respect to automotive goods,” January 22, 2024.

29. Isabella Cota, “Growth of China’s Automotive Sector in Mexico Worries the US,” EL PAÍS English, November 13, 2023.

30. Adam S. Hersh and Robert E. Scott, Why Global Steel Surpluses Warrant U.S. Section 232 Import Measures, Economic Policy Institute, March 2021.
Adam S. Hersh and Robert E. Scott, Aluminum Producing and Consuming Industries Have Thrived under U.S. Section 232 Import Measures, Economic Policy Institute, May 2021.
Robert E. Scott, The Manufacturing Footprint and the Importance of U.S. Manufacturing Jobs, Economic Policy Institute, January 2015.

31. Board of Governors of the Federal Reserve System (US), Motor Vehicle Assemblies: Heavy and Medium Truck Assemblies [MVAHMTRCKS], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MVAHMTRCKS, last updated November 15, 2024.

32. These include anti-dumping and countervailing duty enforcements and Section 232 and Section 301 tariffs enacted under U.S. trade law in response to anti-competitive practices in the Chinese economy.
Adam Hersh, “Docket Number USTR–2023–0013: 2024 USMCA Autos Report,” January 17, 2024.
Connor Pfeiffer, “Will China Drive Its Electric Cars in From Mexico?” Wall Street Journal, March 5, 2024.
Alliance for American Manufacturing, On a Collision Course: China’s Existential Threat to America’s Auto Industry and Its Route Through Mexico, February 2024.

33. Scott Kennedy, Made in China 2025, Center for Strategic and International Studies, June 1, 2015.
Usha C.V. Haley, Putting the Pedal to the Metal: Subsidies to China’s Auto-Parts Industry from 2001 to 2011, Economic Policy Institute, January 2012.
Agnes Chang and Keith Bradsher, “Can the World Make an Electric Car Battery Without China?” New York Times, May 16, 2023.

34. Adam Hersh, “Docket Number USTR–2023–0013: 2024 USMCA Autos Report.” January 17, 2024.

35. Adam Hersh, “Docket Number USTR–2023–0013: 2024 USMCA Autos Report.” January 17, 2024.

36. Reuters, “China’s BYD to Launch First Pick Up Truck at Event in Mexico.” May 7, 2024.
Daniel J. McCosh, “BYD Seagull Lands in Mexico as Dolphin Mini,” Wards Auto, March 1, 2024.

37. Philip Blenkinsop, “EU slaps tariffs on Chinese EVs, risking Beijing backlash,” Reuters, October 30, 2024.
Jorge Valero and Alberto Nardelli, “EU Moves Toward Hitting China with Tariffs on Electric Vehicles,” Bloomberg, March 6, 2024.

38. Heejin Kim, “China’s CATL, BYD Dominate EV Battery Market as Demand Grows,” Bloomberg, October 11, 2023.

39. Mass Transit, “BYD Receives Largest Battery-Electric Bus Order in U.S. History,” November 14, 2019.
Emily Alpert Reyes, “Electric Vehicle Firm BYD Accused of Violating L.A. Wage Rules,” Los Angeles Times, December 1, 2015.
Jobs to Move America, “Protest Denounces Broken Promises by BYD Motors, Inc., Chinese Electric Bus Manufacturer to Taxpayers of LA” (press release), December 1, 2015.
Jennifer Medina, “Chinese Company Falling Short of Goal for California Jobs,” New York Times, October 25, 2013.

40. BYD, BYD Truck Fact Sheet (fact sheet), accessed May 2024.

41. Author’s discussion with A2Mac1 representatives.
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42. Laura He, “Tesla Cuts Prices in US, China and Germany as Competition Heats Up,” CNN Business, April 22, 2024.
Andrew J. Hawkins, “Ford Slashes Mustang Mach-E Prices Again as EV Price War Enters Its Second Year,” The Verge, February 20, 2024.
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43. Adam Hersh, China’s Path to Financial Reform, Center for American Progress, October 2014.

44. Like all models, input-output models including the IMPLAN model, make necessary simplifying assumptions about the real world we are trying to understand, which condition our interpretation of the results. IMPLAN® model. 2024. Data, using inputs provided by the user and IMPLAN Group LLC, IMPLAN System (data and software), 16905 Northcross Dr., Suite 120, Huntersville, NC 28078 www.IMPLAN.com.

45. S&P Global Mobility, Medium- and Heavy-Commercial Vehicle Forecast, May 2024.
S&P Global Mobility, Medium- and Heavy-Commercial Vehicle Forecast Services Dictionary, September 2023.

46. The historical S&P Global data correspond closely to publicly available industry economic data on MHDV production from the Federal Reserve. We estimate projected output values based on the linear regression of inflation-adjusted manufacturers’ vehicle shipment on truck assemblies.
Board of Governors of the Federal Reserve System (US), Motor Vehicle Assemblies: Heavy and Medium Truck Assemblies [MVAHMTRCKS], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MVAHMTRCKS, last updated November 15, 2024.
U.S. Census Bureau, Manufacturers’ Value of Shipments: Heavy Duty Truck Manufacturing [A36CVS], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/A36CVS, last updated Novemver 4, 2024.

47. For more detail, see Appendix Figures A–D.

48. UBS, “The Electric Vehicle Revolution Is Shifting into Overdrive” (web page), March 3, 2021.
International Council on Clean Transportation, E-Truck Virtual Teardown Study, June 2021.
Ben Sharpe and Hussein Basma, “A Meta-Study of Purchase Costs for Zero-Emission Trucks,” International Council on Clean Transportation Working Paper no. 2022-09, February 2022.

49. Zachary Shahan, “Ford CEO: 40% Less Labor To Build Electric Vehicles,” Clean Technica, November 16, 2022.
Jim Barrett and Josh Bivens, The Stakes for Workers in How Policymakers Manage the Coming Shift to All-Electric Vehicles, Economic Policy Institute, September 2021.

50. Turner Cotterman, Erica R. Fuchs, Kate Whitefoot, and Christophe Combemale, “The Transition to Electrified Vehicles: Evaluating the Labor Demand of Manufacturing Conventional Versus Battery Electric Vehicle Powertrains,” Energy Policy 188, 114064 (June 2022).
Andrew Weng, Omar Y. Ahmed, Gabriel Ehrlich, and Anna Stefanopoulou, “Higher Labor Intensity in US Automotive Assembly Plants After Transitioning to Electric Vehicles,” Nature Communications 15, 8088 (September 2024).

51. International Council on Clean Transportation, E-Truck Virtual Teardown Study, June 2021.
Ben Sharpe and Hussein Basma, “A Meta-Study of Purchase Costs for Zero-Emission Trucks,” International Council on Clean Transportation Working Paper no. 2022-09, February 2022.

52. Given current tight labor market conditions near full employment levels, our results should be interpreted as supporting employment in MHDV manufacturing and parts industries, rather than creating new jobs. This likely would entail job-shifting—drawing workers employed in other industries into motor vehicle manufacturing. On average, these jobs are better paid and yield higher productivity than other jobs, meaning there will be individual and social welfare gains from such job shifting even if there is no net change in total employment.

53. Global Commercial Vehicle, “Global Memorandum of Understanding on Zero-Emission Medium- and Heavy-Duty Vehicles” (web page), accessed May 2024.

54. Hussein Basma, Claire Buysse, Yuanrong Zhou, and Felipe Rodriguez, Total Cost of Ownership of Alternative Powertrain Technologies for Class 8 Long-Haul Trucks in the United States, International Council on Clean Transportation, April 2023.
North American Council for Freight Efficiency, “Medium-Duty Electric Trucks: Cost of Ownership” (web page), accessed May 2024.
Andrew Burnham, David Gohlke, Luke Rush, Thomas Stephens, Yan Zhou, Mark A. Delucchi, Alicia Birky, Chad Hunter, Zhenhong Lin, Shiqi Ou, Fei Xie, Camron Proctor, Steven Wiryadinata, Nawei Liu, and Madhur Boloor, Comprehensive Total Cost of Ownership Quantification for Vehicles with Different Size Classes and Powertrains, Argonne National Laboratory, April 2021.

55. James Temple, “Trump Wants to Unravel Biden’s Landmark Climate Law. Here Is What’s Most at Risk,” MIT Technology Review, February 26, 2024.
Senate Committee on Energy & Natural Resources, “Barrasso, Rodgers Pen Op-Ed: The Biden Climate Legacy: American Weakness,” Republican News, October 19, 2023.
Houston Keene, “One Year Later, Senate Republicans Give Inflation Reduction Act an ‘F’: ‘Reckless Spending Spree’,” Fox News, August 16, 2023.
House Committee on Appropriations, “House Republican Bills Attack and Undermine the Inflation Reduction Act and Bipartisan Infrastructure Law,” n.d.

56. Al Root, “How Much UAW Wage Increases Will Really Raise Car Prices,” Barron’s, October 1, 2023.
Adam S. Hersh, “UAW-Automakers Negotiations Pit Falling Wages Against Skyrocketing CEO Pay,” Working Economics Blog (Economic Policy Institute), September 12, 2023.

57. Disruptions can be expected to plague both the supply- and demand-sides, as consumers will face greater uncertainty in committing to invest in long-lived durable goods with more uncertain prospects for future operational costs.

58. Leo Banks, How Inflation Reduction Act Electric Vehicle Incentives Are Driving a U.S. Manufacturing Renaissance, Center for American Progress, November 2023.

59. Department of Commerce Bureau of Industry and Security, “Securing the Information and Communications Technology and Services Supply Chain: Connected Vehicles,” Docket No. 240227-0060. March 1, 2024.

60. Teamsters Local 492, “What Is Card Check Neutrality?” (web page), October 4, 2017.

61. Community Benefits Plan template, accessible here.

62. Good Jobs First, “Key Reforms: Clawbacks” (web page), accessed May 2024.