Center for American Progress

RELEASE: New Report Outlines How To Ensure Fair Wages in the Electric Vehicle Industry
Press Release

RELEASE: New Report Outlines How To Ensure Fair Wages in the Electric Vehicle Industry

Washington, D.C. — Amid the growth of the electric vehicle (EV) industry, a new report from the Center for American Progress provides a roadmap for ensuring that workers in the EV industry are paid fair wages. Commonly used in the construction industry, prevailing wage laws ensure that government-subsidized companies provide wages and benefits for their employees at levels that workers receive in comparable jobs so that government spending doesn’t drive down workplace standards. Through pushing for prevailing wages, protecting unionization, and enforcing existing workplace laws throughout the EV supply chain, the transition away from gas-powered engines can set a high standard for workers. 

Over the next decades, EVs will likely surpass sales of cars and trucks powered by conventional internal combustion engines, transforming America’s automotive industry and its automotive jobs along with it. For the supply chain to produce high-quality jobs and continue paving a way for auto workers to reach the middle class, the EV supply chain must provide effective and long-lasting protections for workers. The report includes some of the following recommendations for the creation of a new prevailing wage policy for EVs: 

  • Provide guidance for determining the most comparable workers, ensuring that existing internal combustion automobile jobs can help provide reference points for new EV jobs.
  • Use national wage determinations when appropriate, so that subsidized firms are not provided additional incentives to move production elsewhere in the United States.  
  • Prioritize the use of actual wage and benefit rates paid to comparable workers, known as the modal rate.  
  • Provide a clear threshold for when the modal rate is considered prevailing, such as a certain number of workers covered by a collective bargaining agreement.
  • Ensure that appropriate data are collected or made available so that prevailing wage calculations accurately reflect market conditions. 
  • Provide for regular updates of wage determinations.  
  • Ensure effective enforcement mechanisms. 

“As policymakers make investments in EV production, a prevailing wage policy can help ensure that the auto industry maintains high job quality standards,” said David Madland, senior fellow and senior adviser for the American Worker Project at CAP and co-author of the report. “Ultimately, there is great potential to ensure high standards for workers while promoting a new, cleaner industry.” 

“For generations, members of the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) have organized, sacrificed, and fought to build the high standards in the auto industry,” said Ray Curry, president of the UAW. “It is good public policy to require that taxpayer funded subsidies are only given to EV companies that will pay a prevailing wage. While a prevailing wage does not replace having a union, what it will do is stop new EV ventures from driving down the wages built up by union workers.”

Click here to read:Prevailing Wages Can Build Good Jobs Into America’s Electric Vehicle Industry” by Aurelia Glass, David Madland, and Karla Walter

For more information or to speak to an expert, Julia Cusick at jcusick@americanprogress.org.