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Biden’s Labor-Climate Dilemma

The Atlantic

www.theatlantic.com › ideas › archive › 2023 › 09 › biden-labor-climate-uaw-strike › 675309

In his first year in office, Joe Biden said he intended to be “the most pro-union president leading the most pro-union administration in American history.” So it must have stung when the leader of the one of the most prominent unions in the country, the United Auto Workers, recently loosed an unsparing attack against him.

In June, after the White House announced a $9.2 billion loan to the Ford Motor Company to help it produce electric vehicles, UAW president Shawn Fain put out an irate statement complaining that the money would go toward “low-road jobs” and that Ford, not its workers, would benefit. “Why is Joe Biden’s administration facilitating this corporate greed with taxpayer money?” he wrote. Fain, a hard-charging new leader elected to his position in March, has accused Biden of doing too little to ensure that the jobs created by his ambitious EV agenda are well-paid union jobs, and is withholding the UAW’s endorsement of Biden for reelection. For months, Fain has also threatened a UAW strike against Detroit’s three big automakers ahead of a contract deadline tonight, in part over fears of job losses resulting from the transition to EVs.

Fain’s attack on Biden reignited long-standing tensions between two traditionally Democratic constituencies—unions and environmentalists—over the nation’s transition to a greener economy. These tensions have erupted and ebbed over the years. Although Biden has largely maintained strong relations with the labor movement, the UAW’s demands threaten that peace, risking not just the union’s endorsement of Biden but also the support he hopes to earn from union members in the 2024 election. Balancing both interests might not be possible forever; the transition to a low-carbon economy is bound to create turbulence across the economy for years or even decades to come.

This conflict between the labor and climate movements played out during the 2016 presidential campaign, when coal miners condemned Hillary Clinton for seeking to slash the use of coal. America’s building-trades unions have castigated Democrats and environmentalists for pushing to block new pipelines and cut oil and gas drilling. Former President Donald Trump has happily seized on these tensions, asserting that Democrats and their climate-“hoax” concerns are destroying blue-collar jobs.

Fain’s remarks reflect organized labor’s broader concerns about one of Biden’s signature achievements: the Inflation Reduction Act, a law that focuses far more on fighting climate change than on inflation. The act includes $370 billion in tax credits and spending to speed the nation’s shift to cleaner energy, including billions to accelerate the transition to EVs. The administration has also proposed rules to require that two-thirds of cars sold in the United States be all-electric by 2032, up from 6 percent today. For the 400,000-member UAW, those policies have spurred worries about losing tens of thousands of auto-assembly jobs, because producing an electric vehicle takes one-third fewer workers than producing a gas-powered one.

[Andrew Moseman: The inconvenient truth about electric vehicles]

One reason Fain was so furious about the $9.2 billion loan to Ford (and its South Korean battery-making partner) is that the loan didn’t include conditions requiring the carmaker to pay good wages. Some workers at factories that make EV batteries have been paid as little as $16 an hour—far less than what many UAW members make at auto-assembly plants, and even less than what some McDonald’s workers earn. The UAW, and the labor movement more broadly, fear that new joint-venture battery factories that GM, Ford, and Stellantis (Chrysler’s parent company) are building with South Korean partners will be largely nonunion and pay wages inferior to those at plants covered by union contracts with the Detroit automakers.

From the AFL-CIO on down, union leaders recognize that there is a climate crisis and a need for a more sustainable economy, despite the pain it will cause many workers. “We’re not against a green economy,” Fain said last month. “But we are against a green economy that’s going to drive a race to the bottom.” There “needs to be a just transition,” he added. (The UAW declined requests for comment for this article.)

Biden and his administration have worked to ease tensions between environmentalists and unions. Last year, the United Mine Workers union endorsed his clean-energy policy in exchange for his promise of retraining opportunities and large-scale investments in West Virginia and other coal states to help ensure new jobs for displaced miners. The White House also announced a program that uses tax credits to encourage clean-energy companies to build projects on brownfield sites where coal mines or coal-fired power plants once operated. Thanks to the IRA’s subsidies, several big clean-energy projects are coming online in West Virginia, including a $760 million factory that will produce renewable-energy batteries and an EV battery plant that promises to hire displaced coal miners.

Some construction jobs will still disappear as fewer oil and gas rigs are built and gas-fired power plants are closed. But when I spoke with Mike Fishman, the president of the Climate Jobs National Resource Center, a labor-led group dedicated to fighting climate change, he echoed many economists in saying that the IRA—together with last year’s bipartisan infrastructure law and the CHIPS Act, which encourages the reshoring of semiconductor factories—will create hundreds of thousands of construction jobs and thereby more than offset any job losses. These new laws will create jobs building highways, airports, tunnels, offshore wind turbines, EV factories, and semiconductor plants.

“In the building trades, people are pretty happy with what’s going on,” said Fishman, a former top official in the United Brotherhood of Carpenters. “They get that there’s a climate crisis and something has to be done about it.” Last year, Biden issued an executive order strongly favoring union labor for federally financed construction projects of more than $35 million.

The auto industry presents more of a challenge. Congress, in enacting the IRA, didn’t authorize Biden to require companies receiving EV subsidies to pay high wages or be unionized. At one point in the negotiations over the bill, Biden sought to give preference to unionized EV factories by proposing an extra $4,500 incentive to consumers who bought union-made electric vehicles. But Senator Joe Manchin of West Virginia blocked the provision. (Toyota operates a large nonunion plant in West Virginia.)

Administration officials say that thanks to the IRA’s billions in subsidies, tens of thousands more EV- and battery-manufacturing jobs will be created in the United States than would have been the case without that law. Moreover, they say the transition to EVs will create thousands of jobs building and maintaining charging stations across the U.S.—jobs that laid-off autoworkers could be retrained for.

[Read: Biden’s blue-collar bet]

“The president has been fighting every step of the way for an electric-vehicle future made in America that supports and promotes good union jobs,” Gene Sperling, a White House senior adviser who is in frequent contact with UAW officials about the green transition, told me. “You can see that in his push for strong made-in-America, domestic content [provisions] … as well as his effort to pass a union bonus in the electric-vehicle tax credit” (the one Manchin blocked).

Madeline Janis, an executive director of Jobs to Move America, thinks the Biden administration could still be doing much more. Her organization, which seeks to improve wages and working conditions at auto, bus, and rail factories, is coordinating a multiunion campaign to raise pay at and ultimately unionize EV facilities in the South; companies have committed to build at least 20 new EV and battery factories there, lured by the region’s lower wages and “right to work” policies that weaken unions. “Shawn Fain is right that in too many cases the manufacturing economy is spiraling downhill to very low-wage and low-quality jobs,” Janis told me. “The administration has a lot more power than it has used so far to assure good manufacturing jobs.” For example, she said, Biden could push states harder to require good wages when channeling federal money to EV projects.

In August, a few weeks after the president invited Fain to the White House for a meeting, the Department of Energy did something else that Janis and unions have called for. In announcing plans to award $15.5 billion in grants and loans to retool factories for EVs, the department said it would give higher scores to projects that have high-wage, high-quality production workers and/or collective-bargaining agreements. In a big change of tone compared with a few months earlier, Fain applauded that move, saying the administration was “doing its part to reject the false choice between a good job and a green job.”

Mitch Bernard, the chief counsel for the Natural Resources Defense Council, told me that Biden has pushed to patch up differences between unions and environmentalists. “For Biden, labor and the environment are right in the core of his agenda—we’ve never had that before in a president,” Bernard said. “He believes there is an intersection that can be harmonious and good all the way around. The White House wants a united front.” The president hasn’t always succeeded. Last March, he delighted building-trades unions and angered environmentalists by approving the huge Willow oil-drilling project in Alaska. Then, last week, he thrilled environmentalists and upset unions when he barred oil drilling in great swaths of Alaska’s North Slope and canceled leases issued under Trump in the Arctic National Wildlife Refuge.

[Caroline Mimbs Nyce: Is Biden the most pro-union president in history?]

Even if Biden has won over many union leaders, it is less clear whether he will be able to do the same with rank-and-file union members. According to 2020 exit polls, 56 percent of voters in union households nationwide backed Biden, and 40 percent backed Trump. The UAW estimates that one-third of its members voted for Trump in 2020 and 2016. In 2016, Trump did better in union households than any Republican candidate has since Ronald Reagan. In 2024, Biden will undoubtedly be hoping for help from the UAW, which remains strong in many blue-collar communities in Michigan and Wisconsin—states that he badly needs if he is going to win reelection.

Some Democrats fear that Fain’s antagonistic words toward Biden and refusal—at least for now—to endorse Biden’s reelection could help push more autoworkers into Trump’s column. Trump has openly asked for the UAW’s endorsement, which traditionally goes to Democratic presidential candidates. In a statement last week, the Trump campaign said, “Joe Biden’s Electric Vehicle mandate will murder the U.S. auto industry and kill countless union autoworker jobs forever, especially in Michigan and the Midwest. There is no such thing as a ‘fair transition’ to the destruction of these workers’ livelihoods.”

In a recent CNBC interview, Fain noted that Trump had urged members not to pay union dues and suggested that auto plants should move from Michigan to lower-wage states to be more competitive. “That’s not something that works for working-class people, and sure as hell not for UAW workers,” Fain said. Still, the UAW isn’t ready to back Biden yet. “Endorsements are earned,” Fain said, “not freely given.”