“America must lead the world on clean and efficient cars and trucks,” said Biden. “That means bolstering our domestic market by setting a goal that 50 percent of all new passenger cars and light trucks sold in 2030 be zero-emission vehicles, including battery electric, plug-in hybrid electric, or fuel cell electric vehicles.”
The Executive Order continued:
My Administration will prioritize setting clear standards, expanding key infrastructure, spurring critical innovation, and investing in the American autoworker. This will allow us to boost jobs — with good pay and benefits — across the United States along the full supply chain for the automotive sector, from parts and equipment manufacturing to final assembly.
The Wall Street Journal described this executive order as electric vehicle welfare with “…Big Business colluding with Big Government to grab subsidies and raise consumer prices.”
One statement supporting the executive order from United Auto Workers (UAW) President Ray Curry urged attaching the Protecting the Right to Organizing (PRO) Act to this mandate.
“Any auto industry transition to alternative fueled engines must be paired with passage of the Stabenow Amendment and passage or an agreement to adhere to the policies of the PRO Act to ensure these jobs of the future will protect UAW members, their families, and our American middle class,” Curry said. “The Senate needs to pass the PRO Act and get it to the President’s desk for signature.”
That’s because President Biden wants electric vehicle (EV) manufacturing to be undertaken solely by unions like UAW. And attaching the PRO Act to this push is expected.
In a March 2021 white paper titled Making EVs Work for American Workers, UAW argued the PRO Act must pass to ensure full transition from gas-powered cars to EVs. They wrote, “Labor laws must provide a level playing field and give workers a voice on the job, which is why we are calling on Congress to pass the PRO Act.”
While UAW claims the PRO Act will level the playing field for EV workers, the opposite is expected.
For example, labor unions generally operate as “labor cartels” by restricting “the number of workers in a company or industry to drive up the remaining workers’ wages.” This is especially true in the car manufacturing sector. The Heritage Foundation explains how the UAW, for instance, acts as a labor cartel:
Now consider how the United Auto Workers (UAW)–the union representing the autoworkers in Detroit–functions. Before the current downturn, the UAW routinely went on strike unless the Detroit automakers paid what they demanded–until recently, $70 an hour in wages and benefits. Gold-plated UAW health benefits for retirees and active workers added $1,200 to the cost of each vehicle that GM produced in 2007. Other benefits, such as full retirement after 30 years of employment and the recently eliminated JOBS bank (which paid workers for not working), added more.
Some of these costs come out of profits, and some get passed to consumers through higher prices. UAW members earn higher wages, but every American who buys a car pays more, stock owners’ wealth falls, and some Americans can no longer afford to buy a new car. The automakers also hire fewer workers because they now make and sell fewer cars.
The same effect could be witnessed in the electric vehicle and battery-powered car market if the PRO Act were to pass.
The Heritage Foundation notes right-to-work states are better for businesses investment compared to unionized firms. Why? The latter “earn lower profits, invest less, and create fewer jobs than comparable nonunion firms.”
Forbes argued the right-to-work laws, not the PRO Act, lead to increased worker satisfaction—even among union workers. It derived this finding from a June 2019 Journal of Law and Economics study examining the “effects of state right-to-work (RTW) laws on individual wellbeing and economic sentiment.”
According to a recent U.S. News and World Report article, three of the ten states boasting the overall share of the clean energy workforce are right-to-work states: Wyoming, Michigan, and Indiana.
Environmental Defense Fund (EDF), a left-leaning environmental outfit, praised Texas, a right-to-work state, for already boasting “existing market forces” encouraging clean energy options. The Lone Star State also holds the No. 2 spot, after California, for related jobs.
The Democratic Socialists of America (DSA), however, claim right-to-work laws, which would be eliminated under the PRO Act, “hurt the environment”:
…they are prevalent in almost every state with a large fossil-fuel industry. As a direct result, just around 10% of workers in the fossil-fuel industry are in a labor union. To make matters worse, “Right to Work” laws incentivize companies to relocate jobs to states where workers can be paid less and there are fewer worker protections, leading to a race to the bottom.
They also lament over the industry having few unionized workers—a mere 9 percent—while claiming the rest are “wrongly classified as independent contractors and denied benefits, which the PRO Act would fix.”
Much to DSA’s chagrin, a March 2019 ruling from the Fifth Circuit Court of Appeals determined clean energy consultants, for instance, are properly classified as independent contractors:
Additionally, while the independent contractors and employees performed virtually identical tasks, the highly specialized and skilled nature of the work meant that it was the type of work that could fall within the domain of independent contractors.
Isabel Soto, American Action Forum’s director of labor policy, found the ABC test would displace 13 million independent contractors, including clean energy workers, from the workforce nationally.
The facts don’t lie: the PRO Act would kill this industry.
Why? The federal government, not the free market, will pick winners and losers by artificially boosting union jobs over private-sector ones while raising consumer prices for EVs and related vehicles.
That’s not sustainable.