As Fossil Fuel Employment Shrinks, Renewable Energy Sector Producing Reliable Job Growth
Countryside, IL: Three of the nation’s leading producers of renewable energy are poised to lead a clean energy boom as the region works to recover from the economic fallout of COVID-19 — according to new research from the Midwest Economic Policy Institute (MEPI) and the Illinois Economic Policy Institute (ILEPI).
“Even before COVID-19 hit, Great Plains job growth in the clean energy sector was outpacing all other sectors by two-to-one, while employment in more traditional energy sectors was falling,” said MEPI Researcher and study co-author Jill Gigstad. “Our research confirms that continued investments in clean energy will be the most cost-effective from the standpoint of creating jobs and growing the economy as the region works to re-open and recover.”
According to the Energy Information Administration, per-capita energy production in the Great Plains states of Minnesota, North Dakota, and South Dakota averaged more than double the national average in 2018. In particular, each state’s production of renewable energy far exceeded the national average.
“Wind generation capacity is the single biggest driver of the jump in renewable energy production in the great plains,” Gigstad added. “It is an abundant natural resource in these states, and investments are proving increasingly economical.”
To highlight the point, researchers used industry-standard IMPLAN economic modeling software to analyze the potential for additional investments in Great Plains renewables, compared to other energy investments. Investments in wind and solar energy were found to generate 39% more jobs than investments in fossil fuel production, and 21% more jobs than investments in nuclear power.
While renewable energy is poised to be an economic engine for the Great Plains, researchers note that more can be done at the state policy level to maximize benefits for workers and the state economy as a whole.
In particular, researchers point to rates of unionization for workers on renewable energy projects and wages as much as 22% lower than comparable sectors. As a result, the region’s clean energy sector currently relies on a significant number of out-of-state contractors — including a staggering 86% of the workforce on North Dakota’s wind projects at a cost of more than $62 million to the state’s economy.
“Before COVID-19, rapid growth in the region’s clean energy sector led many employers to report labor shortages,” said ILEPI Policy Director and study co-author Frank Manzo IV. “To maximize the economic benefits of renewable energy as the region recovers, it will be important for the industry to develop the kind of institutional arrangements that will enable it to better compete for skilled local workers — and to help transition displaced workers from energy sectors that were shedding jobs even before this pandemic.”
Specifically, Manzo and Gigstad highlight the potential for extending prevailing wage standards and pursuing project labor agreements on more clean energy projects — especially utility-scale projects — because of their track records in boosting local hiring and worker wages as well as promoting workforce training, safety, and productivity, without increasing overall project costs.
“With the nation in recession and a doubling of clean energy capacity expected to create as many as 24 million jobs over the next decade, the Great Plains is well positioned to lead not only a transformation of our power production sector, but an economic transition that connects millions of new workers with stable ladders into the middle class,” Manzo and Gigstad concluded.