Geography, Equity, and the Energy Transition

The Inflation Reduction Act earmarks hundreds of billions of dollars for clean energy and the development of jobs in the clean energy supply chain, construction, and operations. Critically, the law also acknowledges that the transition to clean energy presents a generational opportunity to address labor inequities that are rooted in race and gender, as well as the often overlooked element of geography. 

Nikki Luke, an assistant professor of geography at the University of Tennessee, explores how state-level labor policies have contributed to geographic labor inequities that, if they persist, could limit access to quality jobs across the new energy economy. She also looks at local models to support inclusivity and the role of organized labor in the energy transition. 

Full Transcript

Andy Stone: Welcome to the Energy Policy Now podcast from the Kleinman Center for Energy Policy at the University of Pennsylvania. I’m Andy Stone.

The Inflation Reduction Act is the largest clean energy legislation ever signed into law in the United States. The IRA will provide hundreds of billions of dollars for clean energy development and support new jobs in the clean energy supply chain, construction, and operations. Critically, the law also contains provisions to promote diversity and solid wages in the energy workforce. It acknowledges that the transition to clean energy presents a generational opportunity to address labor inequities that are rooted in race, gender, and as we will discuss today, geography.

My guest is Nikki Luke, an Assistant Professor of Geography at the University of Tennessee, whose work considers the labor opportunities presented by the energy transition and by recent laws such as the IRA and the Infrastructure Investment and Jobs Act. She examines the ability of clean energy workers to earn their living in an economy where energy jobs may be temporary and where traditional frameworks for workers to achieve security, such as through unions, have diminished. In a recent paper, she explores how state level labor policies have contributed to geographic labor inequities that, if they persist, could limit access to quality jobs across the new energy economy. She also looks at local models to support inclusivity and the role of organized labor in the energy transition. Nikki is a Visiting Scholar here at the Kleinman Center. Nikki, welcome to the podcast.

Nikki Luke: Thank you so much for having me.

Stone: It’s great to have you here. It’s great that we’re both healthy this time. I think two weeks ago we tried to record, and I was sick. Last week, you were under the weather, so hopefully today, the third time is a charm.

Luke: I hope so, too.

Stone: Your work focuses on a timely issue that I don’t think this podcast has ever focused on, at least not to date. You look at the energy transition through a geographic lens, and in particular, you’ve looked at how opportunity for workers in the energy industry and in the energy transition is tied to where jobs are and where they develop. Could you start us out by describing your interest in this link between the energy industry, labor, and place?

Luke: Yes, thank you so much for this question. I’m an urban geographer by training and fundamentally interested in what makes places feel the unique way in which they do, how we understand place and the production of space as resulting from different political, social, or economic processes, as well as ecologies — and how we understand what makes a place a place. A significant part of geographic research has focused on this idea of uneven development, that the creation of wealth in one place might be connected to the creation of poverty and environmental degradation or poor health in others.

Geographers study this idea of uneven development as unfolding within and across geographic scales. So you might see this at the level of a neighborhood or a city or a region or globally, as different state and business processes unfold over geography. Geographer Willie Wright, in a 2020 paper in the Annals of the American Geographers describes that this is also a racialized process, and one that has deep roots in a history of colonialism.

My research asks how, in working to realize a more equitable and healthy world, we have to think about these geographic differences, as well as the social relations and political economy that characterize place and that influence how the energy sector develops and unfolds in different places, shaping the kinds of employment and the environmental or environmental justice effects of different aspects of the energy sector. As a geographer, I think about this idea of a just energy transition as being geographic in trying to address these geographic disparities. Labor organizer Tony Mazzocchi, who first described this idea of just transition, and I’m quoting here from the 1993 Earth Island Journal, describes that, “Where manufacturing or industrial facilities might just continue elsewhere, workers do not have such flexibility. The only way out of the jobs versus the environment dilemma is to make provisions for the workers who lose their jobs in the wake of the country’s drastically needed environmental clean-up projects.”

While just transition is a framework that emerges from the labor movement to describe measures to protect and compensate workers dislocated, which is a geographic process, as the results of necessary environmental policy, we think about this in a much broader frame today, as characterizing a framework for democratic climate and energy policy that centers the voices and needs of working people.

I think that achieving a just energy transition requires thinking about geography and these place-based strategies to support energy communities and communities of color that face disproportionate energy burden and environmental injustice, due in part to systemic and generational disinvestment that characterizes this uneven development of different geographies.

Stone: I want to take a step back here just a moment. Just transition, as it relates to labor — and this is pointed out in one of the papers that you wrote — has been defined as “the making whole of workers who lose jobs due to the energy transition.” But what you’re really saying here is there is an additional element here, that is making sure that no geographies get left behind, essentially.

Luke: Correct. I think that’s really important to think about, that if we just have this labor focus, we might lose track of the fact that workers in the energy sector are embedded in much wider economies, and the communities that have depended on the energy sector or places that have borne the brunt of pollution, those questions must be addressed in thinking about what a just energy transition looks like.

Stone: You explore a concept that has been around for about a century, and that’s called “jobs property.” And broadly, if I understand this correctly, the term refers to a right to employment and its benefits based on labor contract. That sounds a little legalistic already, but I’m sure you’ll explain it for us. Could you introduce the concept as it applies to the energy sector and how thinking around it has more recently evolved?

Luke: I was first introduced to this concept by another geographer, Vinay Gidwani, who argues that scholars, and particularly scholars in the global North fall into the trap of talking about employment and jobs in the framework of a formal employment, where you have a contract that defines the conditions of work with your employer. But across the world, the International Labor Organization estimates that 60% of workers are in the informal economy, and in the U.S. we’ve seen the rise of gig or temp employment, alongside other forms of informal employment that have always coexisted with wage labor.

And so this idea of jobs property was first, in my research, put forward by economist John Commons, whose writing in the 1920s preceded the recognition of collective bargaining in the United States. He argued that workers had a right to property in their labor based on a union contract that conferred the expectation of income obtained through a collective bargaining process. So this isn’t actually formalized in any sort of legalistic way, but throughout the 1960s, there are numerous instances of unions attempting to negotiate for payment based on this idea of jobs property when specific facilities or industries go out of business. Historian Thomas Sugrue, in a famous study of Detroit, writes that in the 1960s, there was an effort by the United Auto Workers to fight plant relocation, based on a claim to jobs property that wasn’t recognized by the courts.

And so while this has been debunked as a legal right and is increasingly tenuous for many workers who are not covered by a collective bargaining agreement or have seen these agreements discharged in bankruptcy proceedings, we still often fall into this trap of thinking about jobs and potential job loss within this framework of compensating specifically for the loss of jobs property. I argue in the article that you mentioned that we can’t just think of a job as a source of income, but have to think about all the other aspects and ways in which employment shapes our livelihoods. In the United States, it’s also the means of providing for healthcare, providing for retirement, and it’s part of a person’s connection to place and their means of making a living in that place.

In the paper that you reference, I argue that jobs property discourse can’t ensure a just transition for a couple of reasons. First, it doesn’t address the fact that workers who lose jobs in the energy industry might face limited opportunities or worse working conditions in new industries. Second, I think about how the individualized benefits for workers who are dislocated from the energy industry don’t address the wider community effects, as we were just discussing, for workers in related or geographically proximate industries. Places for other workers in communities that see the loss of energy jobs, there are knock-on effects that are economy and community-wide.

And finally this idea of compensation for the loss of jobs property doesn’t address historic, racial, and gender discrimination within the energy industry or the uneven effects of the de-industrialization that go back over decades and generations and that hurt Black workers in particular. And so while I support just transition policies, I’m interested in thinking about this idealistic potential where the energy transition is an opportunity to take up the lessons of de-industrialization and work to build broad political support for addressing inequality in the labor market, as we’ve seen bipartisan support for addressing climate change.

Stone: You also focus very much on the role of the unions, right? It’s interesting that unions come in, in the context of the modern world, in which we’re seeing more gig workers. Union power and organizing have generally declined over the last few decades, but unions have played a central role in obtaining worker rights and benefits. Union influence is not even across the U.S. How important have unions been in the energy industry, and where have they been strongest?

Luke: Unions have played, as you said, a key role in organizing for higher wages, benefits, and safety on the job, in a range of construction and manufacturing occupations that we think of as encompassing the energy industry. Today unions are strongest in the public sector, and only 6% of private-sector workers nationally are union members. And so the proportion of union workers, or those covered under a project labor agreement in the energy workforce, is higher than the private sector average. About 10% of workers in the energy industry are represented by a union or covered by a project labor agreement.

Unions are the strongest on the West Coast, in the Northeast, and in parts of the Midwest and in specific industries, especially in nuclear and in transmission, distribution, and storage technologies, where 20% and 18% of workers respectively are either union members or covered by a collective bargaining agreement. And this is according to the U.S. Energy and Employment Report, which is produced annually by the Department of Energy. In other industries, the share of union representation is not as strong. We see that there is still a high share of unionized workers in some fields, such as coal fuels, about 12% of workers are unionized. In gas and oil, this is closer to 7%. And in solar and wind, the areas of significant growth in the energy industry, we see that 10 and 11% of the workforce are union members or are represented by a union, although this is not equal across the United States.

Stone: It’s interesting. You just talked about the unionization rates across several parts of the energy industry, from traditional resources to renewables, but as we look to the future, and as we look to more renewables, one of the difficult facts here is that few wind and solar jobs are unionized.

Luke: Yes, this is a really important challenge for the industry as we move forward, and something that the IRA is specifically interested in trying to address — increased opportunities for union representation in the wind and solar industries. There are a couple of reasons why we see unionization rates are less in these industries, in part given where wind and solar construction are happening, the dispersed nature of wind and solar job sites, and the fact that these are temporary construction jobs. And so depending on the organization of solar and wind contracts, whether they’re associated with utilities and the geography and where those contracts unfold, we see that workers in those sectors are more or less likely to be represented by a union, or be union members themselves.

Stone: So if I understand this correctly, what you’re saying is that if these plants are built by the utilities, they are more likely to have union membership or union members building those plants. If not, if they are independent power projects, then they are more likely to not be unionized?

Luke: That is a trend that we see on average. Workers directly employed by utilities are more likely to be either union members or covered by a union contract than those in other parts of the energy sector, yes.

Stone: Okay, so as you mentioned a few minutes ago, the Inflation Reduction Act. First off, it’s expected to accelerate growth in jobs tied to new energy. That’s pretty clear. But tell us a little bit more about the equity in representation targets that are in the IRA, to the extent that these are also in the Infrastructure Investment and Jobs Act. And what is the expected impact on the energy workforce?

Luke: Yes, thank you for this question. Something that’s really important to note at the outset is that many of the programs within the Inflation Reduction Act and the bipartisan Infrastructure Law are considered covered programs within the Biden administration’s Justice40 Initiative, which aims to ensure that 40% of the overall benefits of federal investment in climate change, clean energy, other infrastructure programs flow to disadvantaged communities that are, according to the Biden administration, “marginalized, underserved, or overburdened by pollution.” And so I want to just keep that in mind as we think about the labor-specific provisions because the IRA has also used a few mechanisms to try and improve job quality in the construction sector, and particularly to try and address the lagging unionization rates in solar and wind construction.

First, it requires that contractors pay prevailing wage and meet certain requirements to hire apprentices from federally-registered apprenticeship programs, in order to get the full value of certain tax credits, or as a condition of certain loan guarantees and grants. For those who might not be familiar, the Department of Labor defines a prevailing wage rate — it’s a technical calculation, but it’s based on the average wages paid to similarly-employed workers in a specific occupation in a given geography of employment. This is really intended to level the playing field for union contractors by eliminating the possibility that contractors can compete based on driving down the wages paid to workers.

The second measure about ensuring federally-registered apprenticeships is apprenticeships are a particular training pathway to bring workers into the skilled trades and to prepare them for a career as a journey-level worker through paid, on-the-job training. Apprenticeships are industry-driven and often managed and funded through joint contributions of employers and unions to train new entrants into the field for a career in a particular trade. And as part of an apprenticeship, apprentices receive paid work experience. They receive progressive wage increases tied to skill acquisition, and are trained through a combination of on-the-job and classroom instruction. After completing an apprenticeship, a worker will have a portable nationally and industry-recognized credential that certifies them in a skilled trade.

And so while these are important steps to support unionization and labor unions, there’s a lot of work ahead to ensure that the benefits of these higher-wage jobs, better standards in the clean energy industry, also go to disadvantaged communities and ensuring that the Justice40 provisions also include jobs as a benefit of clean energy investment. Studies from the North American Building Trades Unions and others at more regional levels indicate that union apprenticeships are more diverse than their non-union counterparts, but across the country, there’s a long history of racism and sexism in construction fields and ongoing concerns about underrepresentation of Black workers and women workers in particular who are underrepresented in the energy industry. About 8% of the energy workforce total is Black or African American, compared to 12% of the nationwide labor force. About 25% of the energy workforce is women, compared to about 47% of the total labor force.

And so when we think about how to ensure equity in the workforce outcomes of the Inflation Reduction Act in particular, it’s really important to think about what enforcement looks like and what engagement with different community organizations means in order to ensure that these jobs are going to the places and people who have historically not benefited from work in the energy sector.

Stone: California has been one of the more forward-looking states on this issue of ensuring equity in the workforce. And actually, I believe it has been quite forward in terms of apprentice programs to ensure diversity. What stands out about the California experience?

Luke: I looked very specifically at the question of apprenticeship training in the energy sector in California when I was fortunate to work at the U.C. Berkeley Labor Center in their Green Economy Program with Carol Zabin and Betony Jones. A lot of our research at that time was focused on learning from the American Recovery and Reinvestment Act, when green jobs training programs were established that didn’t necessarily create a pathway into a job at the end for workers. In California, the focus was on making sure that anyone who was part of a training program, ensuring that that training program — particularly if it was in an apprenticeable occupation, like a job in the skilled trades — was directly connected to a pathway to employment at the end.

And while this is the goal of workforce programs across the country, what has been really important in terms of California’s work to support high labor standards in the energy industry was the whole of government approach to ensuring that investments in clean energy, investments that came from the revenue generated through the cap and trade programs, Greenhouse Gas Reduction Fund, were directed to disadvantaged communities. There is a statutory mandate that part of benefits from the Greenhouse Gas Reduction Fund support disadvantaged communities, and a focus on ensuring that workers from those communities are also employed in industries and jobs that are investing in the places where they live.

A couple of aspects of trying to think about what building a pathway for new entrants to the field into a job look like, where creating strong mentorship programs and pre-apprenticeship initiatives that provide wrap-around services and the support for people to succeed at work through initiatives like providing access to childcare. And thinking about all of these different aspects of what it takes for someone to enter the energy industry and stay in employment, progress through an apprenticeship, and make it into a journey-level position really requires thinking about these social and economic factors that are part of energy policy as you’re setting up  a workforce development program.

Stone: So you found that the California experience, though, has not been translatable to the South, which you really focused on more recently. Explain why that is.

Luke: What we found in California is that overall where we saw considerable, in particular ethnic and racial diversity and improvements over time in apprenticeship programs as a result of trying to set up clear pathways for workers to move from pre-apprenticeship to apprenticeship to journey-level work that was promoted through effective public policies to incentive clean energy, there wasn’t really the same infrastructure to support either workers or a nascent clean energy industry in the South in the same way. And so you don’t have the sort of whole of government approach, oriented both to supporting labor outcomes for workers and to building and growing high-quality jobs in the clean energy industry.

And there are a couple of factors that differentiate the South from California. In part, the South is a region where the majority of states are right to work. There is very strong emphasis on supporting a pro-business environment within state and local governments.

Stone: Explain that, the right-to-work laws in the South, if you would.

Luke: Sure. So right-to-work laws are a little bit of a complicated technical provision that say, as part of a union contract that covers a given workplace, workers who are not union members cannot be required to pay union dues. And so the effect that right-to-work measures have is effectively in diminishing the power of unions in providing less revenue for them to support additional organizing or other measures of worker protection. As individual workers in a workplace that is represented by a union are not required to pay dues but still experience the benefits of a union that has to negotiate for all of the workers in that workplace. And so this sets up what we think of as the “free rider” problem, with the long-term effect of decreasing over time what we see in right-to-work states which is that union density has decreased over time as a result of some of these measures that make it harder to organize a union.

Stone: And the free rider problem is you have employees who are not paying union dues but essentially benefit from the union’s activities. Is that correct?

Luke: That’s correct, exactly. And so right-to-work laws, there have been many different studies that try to understand how they affect the business environment of different states, whether the direct effect on outcomes for workers. And what we see broadly — and there is excellent review of the history of right-to-work legislation that was done by another geographer, Jamie Peck — is that the idea of right-to-work is often political, and it’s aimed to cultivate this image that states that are right to work are supportive of and were interested in supporting business interests in particular. And so when we think about what this means in the context of the South, where there isn’t a strong history of measures to support labor unions or workers — in addition to that, going back to the previous question about why the California experience is not translatable for the South — we also haven’t seen the same initiatives to support energy or climate policy. So Virginia, North Carolina, and South Carolina have renewable portfolio standards. In other parts of the South, technologies like solar energy have been introduced intermittently or slowly, as the cost of solar has declined, but some of these other social elements that are tied into thinking about the wider effects of the energy industry on an economy and understanding that there are labor and social aspects at play, haven’t been fully embedded in energy transition that proceeds only based on solar being adopted as it is the lowest cost energy resource. This idea that we should set up a pathway for workers in a growing energy industry hasn’t had the same focus to ensure the equitable outcomes for workers like we saw in California.

Stone: I think right here we get to a key issue, right? Despite the fact that you just mentioned that in the South there are less incentives, for example, for clean energy, and that there are also right-to-work laws which have disincentivized the growth and the strengthening of unions, the fact is that much of the American industry and energy industry is shifting to the South, right? So you’ve got new battery plants, I believe Ford has established a battery plant in the South, et cetera. There are many examples of this, right? So at the same time you have these laws that may not allow workers to benefit from unions, et cetera, you have more jobs moving to the South. So how important is the South in the energy transition?

Luke: When we think about the South just generally, it’s the largest region in the United States, in terms of employment, with 38% of total employment and a growing share of clean energy employment. There was an article published in Reuters that found that of the 50 electric vehicle, battery, solar panel, and other factories announced since the IRA was passed in August, 83% are located in right-to-work states, which are not only in the South, but across the United States. And companies choose to locate in places for lots of different reasons. This idea of locating in a pro-business environment that comes with right-to-work policy was quoted as “important” to some of the businesses that Reuters interviewed as a result of this study. But we also see that companies choose to locate for many other reasons like connections to existing suppliers, transportation networks, and workforce development programs.

The growth of recent clean energy manufacturing industries in the South follows the growth of automobile manufacturing in the region that has taken place over the last 40 years. EVs and battery manufacturing in particular are locating to the region. We also see Texas, another right-to-work state as among the largest solar and wind producers in the United States. So it’s a place that will be a site of growing importance, both for manufacturing and the generation of renewable energies.

Stone: Okay, so there’s a passage that you provided in your most recent paper that I think sums this up very succinctly. You write, “These regional geographies of labor law circumscribe the realization of a just transition.” And it sounds like workers and jobs are generally shifting to areas where workers are traditionally disenfranchised. So the key question going forward is: What does this hold for the future of energy equity, particularly as it applies to employment?

Luke: So we talked a little bit about right-to-work laws that happen at the level of the state and make it more difficult to organize a union. And there are other measures that have been adopted by Southern states to try and restrict other forms of worker organizing, often through the ballot box, where working people have tried to champion issues related to fair scheduling or raising the minimum wage at the local level to try and improve the quality of jobs for workers in the energy sector and otherwise. And across the South, there has been a wave of pre-emption measures that restrict the authority of local governments to adopt more aggressive labor protections than are allowed by state law.

And so in many different ways, we are seeing this pattern of local, state, and federal initiatives trying to define what the future of work looks like for working people in the energy industry and otherwise. And as jobs, and particularly jobs that are motivated by or reliant on federal incentives’ shift to the South, there is an opportunity for these new positions that are either trying to get the full value of a tax credit or are required as a condition of a grant or a loan guarantee to use prevailing wage or to hire workers. A certain share of their workers are apprentices. We see this opportunity to challenge the low-road model of economic development in the South that’s based on paying the lowest wage possible to workers and to challenge this history of anti-labor action in the South that was often based on pitting white workers and Black workers against each other and trying to prevent solidarity across differently situated workers in different industries.

And so the use of federal funding to try to increase labor standards through the energy sector is, I think, very promising. There is a lot of federal funding that many of these recently announced projects will rely on, but there are still challenges, both the need for enforcement to realize that higher labor standards are realized at the state and local level. A lot of effort is being spent by the federal government currently to understand how impacted communities, disadvantaged communities, and energy communities can engage directly in these processes to have a say over what new energy initiatives should look like in their communities, and have a say in developing the workforce partnerships and the implementation strategies to try and ensure that the most effective communities receive the support of these important federal initiatives.

We also see that in addition to these questions of enforcement, there’s an ongoing question about what the future of work will look like in new manufacturing industries, where there aren’t the same legal frameworks available to ensure a prevailing wage or to require the hiring of apprentices as there are in the construction sector.

And so as jobs shift to the South, it creates an opportunity for worker organizing, and it’s something that will need continued support and attention and focus from across the United States to try and overcome this history of geographic competition between different regions of the country, different places that undercut conditions for workers to the benefit of industry.

Stone: Nikki, thanks very much for talking.

Luke: Thank you so much.

Stone: Today’s guest has been Nikki Luke, an Assistant Professor of Geography at the University of Tennessee, and a Visiting Scholar here at the Kleinman Center. Check out the Kleinman Center for Energy Policy website for our archive of more than 140 podcast episodes, as well as research and upcoming in-person and virtual events. To keep up with the center, subscribe to our monthly newsletter on our website. Our address is kleinmanenergy.upenn.edu. Thanks for listening to Energy Policy Now, and have a great day.