2023 Automotive Insights Symposium Day 2 Panel Discussion Electric Vehicle Job Quality Federal Policy Response Transcript

JOANN MULLER: Hello, and welcome back from lunch. I hope you all enjoyed it. My name is Joann Muller. I am the transportation correspondent at Axios. If you're not familiar with Axios, it's a media organization based in Washington, DC. We are trying to reinvent media and be respectful of your time with something we call Smart Brevity.

I have been covering the automotive industry for more than 30 years. And I must say I've never seen a more interesting time to cover it. So welcome. We're really happy to be here today.

We're sort of in the middle of this once in a century transition, obviously, from gasoline to electric cars. And what we're going to talk about during this segment is the impact on jobs and how federal policy is going to shape that. And we've got two federal policy experts with us today to really help us explore this in detail.

So sitting here with me on stage is Susan Helper. She is the Senior Advisor for Industrial Strategy at the White House Office of Management and Budget. So tell us a little bit about your background, where your expertise comes from, and what your role is today.

SUSAN HELPER: Yeah, well, I'm really happy to be here. Like Joann, I've been a student of the industry for many decades, and I've presented at this conference before as a civilian. I am on leave from being a professor in the management school at Case Western Reserve University, and I've been on the Board of the Center for Automotive Research and a judge for the Automotive News Pace Awards. So just really excited to be present at this time of great innovation in the industry, and to talk about some of the cool stuff that we're doing in the Biden administration.

JOANN MULLER: Well, welcome. Thank you. And joining us virtually is Betony Jones. She is the Director of the Office of Energy Jobs at the US Department of Energy. Betony, we kind of see you. You look a little ghostlike right now. But I know you'll be coming into focus here. Please tell us a little bit about your background and what your role is in the government right now.

BETONY JONES: Great. Thank you. It's good to see you both. I'm sorry I can't be there in person. I had intended to. I do look very ghostlike. I hope that changes. So I'm the Director of the Office of Energy Jobs at the US Department of Energy. I came back to federal government service after about 20 years. I actually started my career in the climate movement and translating climate science for policymakers in the Clinton administration in the Office of Science and Technology Policy.

And I had this realization that the transition to a low carbon economy, it wasn't just an environmental issue or a science issue. It would have to work for working people. It would have to create opportunities for businesses if we were going to build the political will to address the climate crisis. And so I've spent most of my career in the workforce space looking for opportunities to address climate change in a way that creates good paying jobs with strong worker protections and jobs that are accessible to all Americans, including those with barriers to accessing the labor market.

So that's really what we're trying to do in the Office of Energy Jobs, ensure this transition creates good quality jobs that are accessible, and use that to further accelerate the transition to a zero emissions economy. Super excited for this conversation today. Thanks.

JOANN MULLER: Well, fantastic. We're glad you're here.

So as we've been hearing, there's been really a flood of activity at the federal level to try to manage this transition to electric vehicles. A couple of things that I, as a journalist, have been writing about, of course, are the energy programs under the bipartisan infrastructure bill from 2021, and then, of course, the new purchase and manufacturing incentives in the Inflation Reduction Act.

And as a journalist who's covered this for so long, I don't think I've ever seen the level of sort of sweeping federal policy around the manufacturing sector. So I think it's kind of historic, what we're seeing. And so I'm hoping that you will kind of set the table for us a little bit. Tell us how all these EV-related policies fit into a broader White House strategy.

SUSAN HELPER: Great. Well, I will try to do this in a brief manner and start by talking about we actually are embarking on what Brian Deese, the chief economic advisor to the president calls a modern American Industrial strategy. And the definition of that is that we're going to identify areas where private industry on its own will not mobilize investment necessary to achieve our economic and national security interests. And we're going to use public investment to spur private investment and innovation.

And so we have a whole bunch of different ideas of things to do. So the slide up here, is Kristin presented yesterday about all the cool stuff that's in the Inflation Reduction Act. That is a subset. And so I think there's two things, there's two reasons, in econ language, two big market failures about why we want this massive investment. I think the first one Adam talked about as climate change being a huge externality, a huge spillover. The second is making this transition requires a whole lot of coordination among a bunch of different factors.

And so then rather than go through alphabet soup of the programs, I want to talk kind of from an outcomes-based. What are we trying to do here? So if we want people in EVs, the first thing we need to do is spur demand. And I have to say federal policy hasn't always focused on this demand side sufficiently. You have to think about what's going to get consumers in an EV.

And so we have these tax credits. We also have-- you talk to consumers, what prevents them from EV? Well, it's range anxiety. And there are studies that suggest that $1.00 spent on charging stations, range anxiety, is actually several times more effective than a purchase incentive. So we're going to do both.

Then there's the supply sides. We need the factories. And so we have production tax credit that's in the IRA. We have the a bunch of the money for putting in a battery supply chain. [INAUDIBLE] sums in, the IRA sums in the bipartisan infrastructure law. The idea here is that we don't want to trade dependence on Saudi Arabia for oil, for dependence on China for various manufacturing inputs like chips and batteries, et cetera. So we're going to have a bunch of incentives to set up a battery supply chain, and very considered each stage. So mining, components, cells. So that's on the capital side.

You also need a workforce. I'm going to let Betony focus on that. Innovation. This is one of the things we do well in America, and it's also going to provide benefits to consumers and the world. So there's a incentives for startups. The DOE has a Loan Programs Office of various kinds of financial incentives available for companies that want to invest. And just yesterday I had the opportunity tour American Axle, got a grant from DOE to do research and actually create a very cool design for an electric motor that does not use rare Earth materials. So we can innovate around some of the challenges, hopefully.

Communities. There are, as the previous panel talked about, movements in where some of these jobs are likely to be. So first thing we want to do is incentivize putting jobs, the new EV jobs, in the places where the older jobs were. This is a key kind of social benefit to minimize disruptions. There's $2 billion for conversion grants in the various EV programs. There's also in the economic development administration-- this is from the ARP, the COVID legislation-- a bunch of money funds for communities to organize and some very, very large grants of which Detroit got one, $50 million to kind of organize its response to the EV transition both opportunity and challenge.

And I think we have already been successful in crowding in some private investment by kind of showing our commitment that we have this goal of 50% EV sales by 2030. And that's crowded in. We've now seen $36 billion of announcements in electric vehicles and $48 billion in investments in batteries. And our goal, if we achieve this goal-- we really think we have a lot of benefits here-- $900 savings to the average consumer in terms of operating costs for vehicles, reduce about two billion metric tons of carbon pollution, saving 200 billion gallons of gasoline.

And so overall, if we add up all these benefits, we think about $140 billion in net benefits. So this is our plan. We've got a kind of patchwork of authorities from Congress, and we're trying to weave them together. It's obviously not going to be perfect. And if you guys hear of things that are working well, gaps, love to hear about them.

JOANN MULLER: Well, as you said, it is a lot. And I imagine, Betony, these strategies are going to have some very important impact on workers and on jobs. And I'd love for you to talk a little bit about what's at stake for workers from this, and what are the potential benefits, but also the challenges.

BETONY JONES: Yeah. Thank you. And building a little bit on what Sue said, I think this EV transition is sort of a microcosm of the Biden administration approach to industrial strategy. So the goals that Sue outlined in terms of leaning in to creating good jobs with high wages, using public sector investment to leverage private sector investment, supporting domestic supply chains and building those out within the authorities that we have, reducing emissions. All of these goals kind of come to a point in the EV transition.

What's interesting is that the initial public sector investment-- and that's shown here. Thanks for putting this slide up-- with the red, blue, and purple colors, these are some of the grants that DOE has made in the battery supply chain-- will obviously create jobs as those projects get implemented. But if you look at the green, that's the private sector investment that we've been tracking, nearly almost $100 billion of private sector investment committed to the EV and EV supply chain across the country.

And so the signal that the Biden administration has sent in terms of our commitment to build this industry here in the US and not accept what we were being told, that we had sort of lost the edge and couldn't recapture it, that commitment that the Biden administration has made has sent a really powerful signal that has triggered quite a lot of private sector investment.

And part of that is because of the tax incentives for vehicles and the conditions around domestic assembly and domestic content and critical minerals from the US. So all of that creates jobs.

And so what's at stake? Well, there's quite a lot of opportunity. I mean, we really have the opportunity to grow jobs in the vehicle space, grow manufacturing jobs. I just saw a statistic yesterday that manufacturing employment in the US is up higher than it's been since the start of the Great Recession.

So manufacturing jobs are definitely coming back, definitely growing. And that's a huge opportunity for workers where, for decades, we've seen job growth more in the low wage service sector. And now we're seeing growth in manufacturing. And that creates some competition for workers. And I think if we manage this correctly, that competition can really put upward pressure on wages and job quality.

I think the other opportunity here is to lean in to job quality as something that can be really valuable to support US competitive advantage in this space. We might not be able to compete with the lowest cost labor, but I'm sure that we can compete when it comes to innovation, when it comes to problem solving and efficiency in these sites. And Sue's research really has talked a lot about when employers lean in to high road practices, the returns to the bottom line of those investments.

So what we're really trying to do is support workforce development for this industry in a really coherent way, one that can take advantage of the unique skills of American workers and support the upskilling, and use that to really support the competitive advantage of the US in this globally competitive industry. It's not that the transition is without challenges. There's some geographic shifts in investment. If we weren't able to capture that battery supply chain, there would be risk of job loss because there's different jobs required for EVs versus ICE vehicles.

So a lot of the opportunity relies on intentionally crafting a strategy to make sure that we're capturing the opportunity and not falling prey to the risks associated with this industrial transition. Industrial transitions are always difficult. There's geographic shifts, there's skill shifts, there's risk of worker displacement. But I think the proactive nature of the Biden administration strategy is really getting in front of that so that we're not just falling prey to those risks.

JOANN MULLER: Very interesting. Well, I want to dive a little later into some more of the job-specific issues. But as both of you were talking, I was kind of reminded about what happened in Europe during COVID. Very early on in the pandemic, their policies, the European Union put in some policies that were very favorable for electric vehicles, perhaps not as much on the manufacturing stuff. I just remember it was very attractive purchase incentives.

And what was remarkable is in six months, how quickly the market moved in Europe. And so I'm wondering if you expect that kind of response here in the US, or could it go even faster? Like what should we expect because of these policies you're putting In

SUSAN HELPER: Well, I guess Bloomberg estimated that about 20 percentage points more EV demand because of our policies than without them. So I guess that would be one argument. This 50% goal, we didn't pull that out of the air. That was negotiated and discussed quite vigorously with automakers and the UAW. So it's an achievable goal. I think we're at a little bit more than 5% now, but that's already a doubling. So we feel like we're well on the way to achieving that.

JOANN MULLER: Did you have anything to add on that, Betony?

BETONY JONES: Well, I just think that the reality keeps blowing the projections out of the water. I think EVs are attractive, the incentives are attractive. The charging infrastructure, as Sue mentioned, will help enormously deal with range anxiety and just making it easier to think about where you can refuel and take longer road trips, and move past EVs as just a commuter vehicle, but to something that can actually replace your family vehicle. I think some of the innovation on the battery side to increase range.

I think all of those things will help in that the technology in a lot of ways-- and I hope this doesn't sound too biased-- but it's just superior. And so I think consumer adoption will be accelerated. The incentives are generous. And I think as some of these investments, these private sector investments roll out and we get on top of the supply chain and are able to produce more vehicles, the cost will come down, and as they get more affordable as well. I think it could be a very rapid transition.

JOANN MULLER: Well, I do want to push back a little bit because in some ways, it seems like the Biden administration policies sometimes seem at cross purposes. So you want a much faster uptake of EVs because of all the climate benefits that we've discussed. And yet at the same time, you're putting restrictions on the battery content and the supply chains, which just makes it harder for consumers to take advantage of these purchase incentives.

And building a domestic supply chain, while good for the United States in the long run, is going to take quite a while. And it's going to require domestic mining. And these things also work against the goal of faster EV adoption. So I'd like you to talk about which of these goals takes precedence and how you look at those potential cross-purposes there.

Sue, why don't you start?

SUSAN HELPER: Sure. I mean, I think we have multiple goals in this administration. So we have a climate goal. We have a goal of reducing our dependence on China. We have a goal of good jobs and opportunity to choose a union for all workers. And sometimes these goals are in conflict, and then we have discussions about those.

But we also try to design policies where we can achieve all of them at the same time. And I actually think that once you start looking at numbers, that some of these trade-offs look less difficult than it might seem. The whole world is trying to make this EV transition. And so it's not like there are EV chargers just lying around, if we're going to make them, that are incentives to actually build. So we have created with our incentives-- and the companies will agree with this-- a DC fast charging industry in the US.

And it's not like we are slowing things down by very much, that our incentives that were in our requirements around these chargers and the domestic content that we are going to roll out. Anyway, I think because of this, the fact that there is worldwide under capacity, that we can really achieve all these goals at once.

And then I also think the point made in the previous panel about the need for political support, that we need to bring everybody along with us. The title of an early administration executive order, I think, captures it well, which is one, ensure that the future is made in America by all of America's workers. And so we don't want to leave people behind, both because it jeopardizes progress on our other goals, and also because we think it's just wrong.

BETONY JONES: Yeah. I think sometimes policymakers start looking for a parachute once they've fallen off a cliff. And I think right now, we're actually doing this very rare thing of being proactive and devising a really smart strategy to ensure that this transition works over the long haul. There is a climate crisis, of course, and we need to rapidly reduce emissions. But in all other respects, we have a bit of time to get this right. And in fact, we have to get it right, to Sue's point, that this is new everywhere and it's sort of a race to develop these supply chains.

So I think that sometimes when you move a little slower and more methodically, you get further faster. There might be more triage types of opportunities to get people to go out and buy EVs now. But there aren't really even EVs on the market. I mean, you can't really even get one.

So yeah, we want to encourage rapid adoption. But we need the secure supply chains in place to support that so that it's not just a whim or a flavor of the month, but something where we can support sustained demand. Some of the chemistries that companies are developing are not, then, dependent on minerals or materials from overseas where we can control the entire supply chain. And that can also sustain long-term adoption.

So I think there's an opportunity. I mean, sustained commitment is the key to this, and what we're doing upfront not only is building the industry to be able to support consumer demand over the long haul, but to Sue's point I think the intention of domestic sourcing, domestic assembly, and the job creation and Economic benefits that we'll get from that will also build and sustain the long-term political support for continued policies to support this transition.

JOANN MULLER: Thank you. I want to remind the audience that you can submit questions through Pigeonhole, as you have been earlier today. So fire away. But I have plenty, so I'll keep going.

There is another example, maybe, of sort of a conflict in the policy that has to do with commercial vehicles. And my understanding and reading of the rules are that they don't have the same supply chain restrictions. And a number of companies, in particular foreign-based automakers, have cried foul on some of the other incentives. And therefore they're looking at the idea that they could use leased vehicles as commercial vehicles. And that basically opens up the world to getting around these rules that you've talked about so carefully planning. And basically, it seems to me it leaves a big hole in the policy. And I'd love to hear your thoughts on that.

SUSAN HELPER: Well, I mean, the process of legislative crafting is often referred to as sausage making. I think the sausage making around the IRA was particularly sausage-y. So it's not like we had-- anyway, so this is what we're left with. And so what are the incentives to meet our domestic production goals? So I think they're not zero. So first of all, you don't get the battery production tax credit if you're not manufacturing-- you don't have a battery supply chain in the US. And that's on the order of $4000 a vehicle. So that's not nothing.

The other thing is that the way that the commercial tax credit is written is that it's based on the differential between the cost of the batteries in the alternative ICE vehicle. And I think we saw the presentation yesterday, particularly I, that we actually see fairly quick conversions between those. So that tax credit is will be smaller in the future.

JOANN MULLER: OK. Betony, did you want to weigh in on that at all or?

BETONY JONES: Oh, I don't really have anything to add there. I think Sue covered that.

JOANN MULLER: All right. Well, here's my question for you, then. Let's say that we do succeed in setting up the groundwork for the domestic supply chain. I want to if you believe these are truly comparable, high quality jobs. How would you compare jobs in the EV sector versus the traditional ICE sector? And we can get into whether it's the pay rates or the skills and training that are required. This was talked about a little bit earlier today, but I'd love to hear from the federal government's standpoint how comparable these jobs are.

BETONY JONES: In a way I think it might be a little too early to tell. Did my video go out? Can you still hear me?

JOANN MULLER: Yes.

BETONY JONES: OK. Yeah, it might be a little bit too early to tell. I think there's some unknowns as we see more of these battery plants open. Certainly the components differ quite a lot. So when you think about an ICE vehicle and all the various parts that go into it-- not the body, but the engine, the underbelly-- almost none of those are required for EVs, and the majority of the value of the EV is in the battery pack. So the structure of the supply chain will be rather different, and that does change jobs.

But in terms of the quality of jobs, I think it's going to matter a bit how what consumer demand is, what the industry feels like it can support, the extent to which workers recognize their power in a competitive labor market and advocate for union representation and higher wages and better benefits.

And I think there's just a lot that's still to be determined. What I hope is that we can lean in to supporting ongoing skill development for workers in this space, and to continue to build upon that in order to maintain that innovative edge that we need to be competitive.

And our DOE has launched a battery workforce initiative that's really designed to convene industry partners to identify what those skill needs are, develop training standards, look at what the career trajectory for workers can be in these facilities, focusing not just on the engineers and the STEM occupations, but importantly, the hourly workforce who plays a really important role in not just the production and assembly, but the troubleshooting, the problem solving, the identifying issues, the production line that can improve efficiency.

So I think the greater the extent that we can really value the inputs of workers in all levels of these factories or these companies, the more we can support and justify higher job quality. I actually think it's really encouraging to see the investments in battery manufacturing as a way of sort of revitalizing the manufacturing sector, and showing again that these blue collar occupations in construction and manufacturing can also provide really viable pathways to the middle class because most of the jobs that we're going to see from this transition are jobs that don't require a four year STEM or engineering degree that require on the job training. There's opportunities for apprenticeship.

So I'm really hopeful that we can build this industry as a high road industry from the get go and that that will support our advantages in this globally competitive industry.

JOANN MULLER: You know, I think so much about this EV movement is a leap of faith. The car makers say, trust us, these cars are going to be better. Trust us, you can find a place to charge your vehicle. Trust us, your cost of operation over total cost of ownership will be lower. And I think that applies here in the case of the labor situation as well. The government is saying, trust us. This transition is going to lead to all these wonderful, high quality union jobs.

But I have to put myself in the shoes of a worker at an engine plant in Michigan or Ohio or something who that job is going away. What's your advice? What is that person supposed to do? Are they supposed to move to Tennessee or Kentucky or Georgia, work for a new company because these are new startups or they're joint ventures-- it's not like you have transfer rights from General Motors to some of these other battery-related companies-- and then try to unionize at your new employer? I mean, is that realistic?

I'd love to hear what you have to say about that. Maybe I'll start with you, Betony. I'll keep you on the hot seat.

BETONY JONES: Yeah. No, I don't think that the government is saying trust us. I think that we're saying work with us. I think that we see there's huge advantages to unionization as were noted in the 1935 National Labor Relations Act. The bargaining power between workers and employers is really important to the efficient and effective conduct of commerce. And this administration has really leaned into that and is trying to re-elevate that in this economy, when unionization rates have declined quite precipitously to the detriment of a lot of our national priorities.

So there's some education that's happening and trying to, where we have the opportunity, to really do that education, technical assistance, and encourage and incentivize jobs with strong labor standards, and especially make sure that employers are responsible employers and protecting workers' rights to organize.

So it's not so much a trust us message as a this is a really good thing, work with us to do it, and this is the vision that we're trying to support. But for individual workers, if you remember, put up the map that I showed earlier, there's enormous investment happening in traditional automotive communities for the supply chain.

And the big three auto companies are really proactively locating their battery factories near their automotive assembly plants because industry recognizes the importance of talent. And I think Michigan has attracted a lot of private sector investment because it has that talent. And people looking where to put a factory are thinking about a lot of considerations. But the availability of a skilled workforce is certainly one of them.

I think and it's a little bit too soon to tell exactly what this is going to look like, but it's not all doom and gloom. I think there's going to be a lot of opportunities to transition the workforce to this space. And in December, the Altium, which is a joint venture between LG and GM for battery production, the Altium facility in Ohio, workers voted overwhelmingly for UAW representation. So now we have a unionized, or will have a unionized battery factory. And I think there will be more of that to come.

SUSAN HELPER: I mean, I also think there's a role for employers here, that employers very well how much it cost to raise wages. But they don't measure so much what the benefits of raising wages are. And I think particularly when we have a new industry with a lot of potential safety issues, a lot of debugging-- these are still new processes, high precision process. There's a lot of capital that is very expensive if you have downtime-- that there's a real reason why you want to have a skilled workforce. And in workforce, like other commodities, you get what you pay for.

And I worry that a lot of employers are screaming that they can't find workers, and they've talked about how they've raised wages. And it's maybe 10% or something. But we need to be thinking about these high wage strategies, again, not just as a matter of justice, but also as a way of improving how the economy works. There's a lot of potential with new data analytics and smart manufacturing for problem solving on the shop floor. And I think we in the administration have various programs to kind of help upskill jobs, so not just take as given the kinds of jobs that employers have had in the past, but can we work together to improve those jobs? I think that's one of the premises of this really exciting battery workforce initiative.

So I think together, employers, government, unions, community organizations, we can create a good battery sector. And then I guess also point out that there's investments outside of the auto industry. So if you think about the Micron investment in Michigan, the ship's equipment is different. But you need to maintain equipment. People have skills in Michigan, and maintaining equipment, people know how to do quality control procedures, how to show up for work on time. So there's going to be opportunity as well.

JOANN MULLER: I'm curious, Sue, what levers federal policymakers have to kind of influence the development of these higher quality jobs and the workforce development. We'll have Betony talk a little bit more about the battery workforce initiative. But in terms of federal policy, I mean, what levers do you have to steer this more in the direction that you're talking about?

SUSAN HELPER: Well, actually, maybe I think Bethany is just a really great example. So I think she should go first.

BETONY JONES: So for battery, this is not on the production side. But for the construction of the manufacturing facilities, the Inflation Reduction Act provides five times higher incentives if those factories are built with workers getting paid prevailing wage and with the utilization of apprentices. So it's not a requirement, but it's a rather significant incentive to address quality and encourage quality jobs.

On the production side, a lot of the levers in statute have to do with the domestic assembly and domestic content. So the intention being, let's first make sure that these jobs are in the US and available to US workers. And you have prevailing wage for construction. There's not the same lever in the statutory language for the manufacturing jobs.

One of the things that DOE is doing, both in the loans office when they're doing their due diligence for viable projects to fund and doing the risk assessment, is to really think about the companies' plans and how realistic they are to attract and retain the skilled workforce that they're going to need. This is a really important consideration in a tight labor market where workers have choices.

And so how companies are thinking up front about workforce issues and their investments in training, and how they will be competitive places to work, is factored into both our loans and our grant making. On the grant side, it's through what we call the Community Benefits Plan. That's basically a risk mitigation plan that addresses social risks. So what's your plan for attracting and retaining the skilled workforce required to meet the goals that you've laid out and ask for funding for?

How are you going to address workplace health and safety? That's a huge issue in the battery industry. Materials handling, and making sure that in the engineering, and there's so many different pieces of dealing with this equipment or these materials that involve health and safety, not just for workers, but also for the public.

So asking upfront for how employers are thinking about these things is one of the levers that we're using so that there's a recognition that this isn't just a technology issue to solve. We're thinking about deployment. We're thinking about implementation, and there's a lot of other factors at play, including workforce skill and availability.

JOANN MULLER: OK. I wanted to touch a little bit more on the location of these jobs. I know you noted that there's been a fair bit of investment in traditional auto states, but also an enormous amount of investment in what we would call the southern right to work states. And I guess the basic question is whether the center of gravity for this industry is shifting to those states and what the implications of that might be, and really, whether the federal government can or should do anything to influence those trends. Sue, what do you think?

SUSAN HELPER: Well, I think on the positive side, having investments in more states means more political support for these things. This is not just a welfare program for Michigan, Indiana, and Ohio. We have Georgia senators very much on board with this, and even some Republicans. So I think that's on the one hand.

On the other hand, I think that we want to make sure that-- there's a lot of research that suggests that clustering and agglomeration is efficient. You see this incredible concentration of automotive expertise in Michigan, which I think is a benefit to the world. And we also want to make sure that we, to some extent, capture the kind of social costs and benefits of these movements.

And we do those in a couple of ways. One is these conversion grants. So we want to make it much less costly for communities and states, and also the federal government, frankly, if we don't have massive dislocation. And so there's a rationale, just an efficiency rationale as well as a justice rationale to have these $2 billion in conversion grants to convert an existing plant that already has a workforce, that already has housing, already has hookups of sewer and water and rail connections.

A second thing that we're doing is trying to just publicize the advantages of these, you might call them brownfield locations that I think have been ignored in the race to greenfields, that you could save a lot of money and a lot of hassle if you go to a place that has a workforce, that has housing, existing community, existing infrastructure. So we're trying to promote that.

And so I think some of what we're trying to do is just-- I think there's been a prevailing set of arguments about what's costly, what's not costly. So the profit maximizing manager, of course, goes to China. And you can show that makes sense because look at how low the wages are and how low the piece prices are. And we kind of then forget that there's all kinds of costs that we haven't captured. So we haven't captured fragility, lack of resilience. We haven't captured the ability to innovate. We haven't captured welfare costs in the US.

And so to just try to make aware, both for public policy and private policy, that these costs exist and are something that managers as well as the public sector should consider.

JOANN MULLER: Betony, what holes do you see so far in our policies for trying to manage the labor aspect of this transition?

BETONY JONES: What holes?

JOANN MULLER: Yeah, do you see any holes in the policy, things that may have been missed that still need to be addressed?

BETONY JONES: Yeah. I think, as Sue was talking about the sausage making, I think there's something to that. The Inflation Reduction Act is the most significant the piece of climate legislation that we've ever seen. And it moves us forward in huge, huge leaps. But I think there's things that, from a labor perspective, could work better. Like if there were labor Standards or incentives on the manufacturing piece, that would probably help.

I think some of these existing conditions, like the investments in southern states that might have lower wages and are right to work, they might seem like good investments for companies in the short term. But as we grow this industry, and as there's more competition for workers, I think that some of the decision making or the factors that are considered will start to shift.

So I'm not too worried about the center of gravity shifting. I think, too, there's a lot of focus in the federal government around supporting communities in transition. There's the Interagency Working Group for Energy Communities that looks across the federal government on what funds and support are available for transitioning communities. I think that that's currently focused on coal and oil and gas communities. But I think that making sure that we're proactively thinking about industrial and automotive communities is going to be important so that we're not trying to solve a problem after it happened, but rather get in front of it before it happens.

But there are the conversion grants that Sue talked about. And there are a number of other programs to help, or considerations to help make sure that we're capturing and leveraging the assets of automotive industrial communities to support this transition.

So the holes, I would say, are like wish list items that I might have, or nice to haves, or things that maybe could be improved upon over time as we iterate and experiment and see what works. One of the things that we're not doing that I think is probably useful is that there's not a ton of federal money going into just training for the sake of it like we saw in the past. And the problem with just training people for jobs that don't yet exist is that one, it's demoralizing, then, when you invest in training and can't find a job. But it also has the effect of sort of flooding the labor market and further driving down wages.

And so our approach, the federal government's approach to workforce education and training this time around is much more calibrated to actual demand. We're really leading with the demand. Let's grow the consumer demand, let's grow jobs, and then let's identify and develop workforce training that can respond to that. And I think that's an approach that will better ultimately serve both employers and workers. So that's something that I think that we're not doing, but not doing in the right way.

JOANN MULLER: That's interesting. OK. Sue, I saw you nodding during some of Betony's response. Was there something you wanted to interject or?

SUSAN HELPER: Would just say I think two things that are lacking, or one thing that is lacking, is government capability. And I just point out we've had decades of hollowing out government capability. And that shows itself, I think, in two ways. One is there's a lot of discussion about permitting and how long it takes something to get permitted.

JOANN MULLER: I was going to ask you about that in my next question. Had to do with mining and things like that. But you continue on and then I'll get to mining.

SUSAN HELPER: Well, and some of that is that we want to balance things, different considerations. That takes time. But part of the reason it takes time is there just are not that many employees in these agencies. And if we had greater capability-- so the same thing with the IS. We gave a whole bunch of money to the IRS. Already the IRS backlog is down by 1/3. So you have more people processing the papers, paper gets processed more quickly. So I think a key aspect of permanent reform would actually be just increasing the capability in these offices.

There's a second kind of government capability that I guess I experience every day, which is we are trying to build an industrial strategy. We haven't done that in an intentional way in many decades in the US. We've had one, but it's a hodgepodge with even more contradictory elements. And so we lack the ability to have granular data on understanding where are these investments, what is the impact of our policies several layers down in the supply chain? I am sure that we're going to find that there's some kind of shortage we've created, some massive demand for something that doesn't-- and so please do tell us about that because we'll try to fix it.

But anyway, I think just building more analytic capacity in government. And then also, in the kind of NGO sector would be super helpful as we try to move together.

JOANN MULLER: All of these things that have happened have come under the Biden administration. We have an election in two years. Who knows what will happen? But I do wonder about the sustainability of this larger industrial strategy. I mean, you two obviously have a vested interest here. You represent the Biden administration. You've made some incredible measures and policies to move forward on this. But the next president might just decide that's not a priority.

And I kind of wonder about this whipsawing. We've seen it before. But the stakes seem higher now. We've made a bigger bet this time. So tell me how you think about that.

SUSAN HELPER: Well, I would point out that two of our three big bills were bipartisan. So the Bipartisan Infrastructure Law on infrastructure and the Ships Act both had a strong bipartisan support. The IRA did not. That's a problem. But I think that there are elements of a coalition across parties that really think that we need, for a whole lot of reasons, this robust strategic capability.

JOANN MULLER: What do you think, Betony? Would you agree?

BETONY JONES: Yeah. I think about that, these were bipartisan. I still think there's a challenge with general people understanding these bills that were passed. The Inflation Reduction Act, I think, almost nobody outside of the people working in this realm have even heard of it. That might change now that the incentives in tax credits are live.

So there's a huge communication challenge. I think this administration has done more to impact working and people in this country than has been recognized by a long shot. And I think we need to continue to make the story real and concrete. And as we see the fruits of these labors starting to mature, I think that will be easier.

Additionally, and Sue mentioned this, I think about the Upton Sinclair quote that a person whose livelihood depends on something is-- I'm just trying to paraphrase. If a person's livelihood depends on not understanding something, then they won't understand it or vice versa. And just as people starts to realize for themselves, as they get jobs in this industry or in the low carbon industries in general, as voters see these investments in their communities and their states, I think that people, as they start to see their livelihoods tied up in these policies, it will build more support to maintain the durability and continued improvement of this industrial strategy.

But a huge part of that is a job for people like you, Joann, and journalists. How do we tell a story when the news doesn't always like a good story? It's not the click bait that people respond to. How do we really tell the compelling stories about the positive things that are happening in order to sustain momentum and build that social and political will to continue doing more of this?

JOANN MULLER: Well, I will say that as a journalist, many times I have struggled to make stories about batteries very scintillating. But it's important, and it's great to have you back, and you're in focus now.

BETONY JONES: Right at the end.

JOANN MULLER: All right. So I have a few more questions, but I want to remind everybody, feel free to send some up here through the Pigeonhole app.

So Tesla. Let's talk about Tesla. Here we have a company that really set this industry rolling. Clearly the world's leader in electric vehicles just this week announced a big expansion of its plant in Texas. And yet there's a lot of labor issues at Tesla factories. They are not union, and it doesn't appear that they are going to become union any time that I can tell. Can either one of you describe the Biden administration's relationship with Tesla?

BETONY JONES: I do not have great insight.

SUSAN HELPER: I'll just say that I think we work with them where we can. They have really shown the market potential for EVs. They should get credit for that. They've made investments in batteries. That's good. We wish they had a different labor policy. And that's not a secret to them.

JOANN MULLER: Well, I don't if you can talk about OSHA, but on the worker safety things, are you going to be cracking down on them?

SUSAN HELPER: That's actually, I guess, a Department of Labor OSHA question. In general, I will say that we are very much in favor of worker safety.

JOANN MULLER: All right.

BETONY JONES: Yeah. I mean, same. Workplace health and safety is really important. And so that's why, when we're scoring competitive grant applications, we're asking very explicitly about not just a company's workplace health and safety plan, but specifically how are workers involved in the design and implementation of that plan.

And I think some of the way that we've designed those questions for applicants to respond to, and then we score their responses, have been informed by the issues at Tesla and other places. So we are thinking, how do we proactively get in front of this to ensure that as we're supporting this industry, there's good OSHA compliance, and that workers feel safe physically on the job, but also that their workplaces are free from discrimination and retaliation for any reason, but for pointing out safety issues is certainly one of them.

So we're not the enforcers. But we do recognize the importance of workplace health and safety and worker voice in that. And that's why we're scoring competitive applications for all of our investments with that in mind.

JOANN MULLER: All right. I wanted to go back to-- it might have been Sue. Early on we were talking about the consumer incentives, that you have to create a market for this. And you touched on charging as one of the important policies. So I believe it's $5 billion for the NEVI program. This is creating a national network of fast chargers across what we call the alternative fuel corridors. So creating a network across the highway system, basically, coast to coast.

And yet one of the priorities, also, of the Biden administration is equity and equitable access to charging. So I'd love to see if either one of you can talk about how these policies are going to help make chargers available to disadvantaged communities, communities of color, low income.

BETONY JONES: Do you want me to start?

SUSAN HELPER: Sure, go ahead, Betony please.

BETONY JONES: The guidance for the NEVI program for states-- so this is formula funding, and there's guidance that states have to respond to-- asks a number of questions around equitable access to charging infrastructure. In addition, there's some guidance, or requirements, actually, on labor standards for the installation of this charging infrastructure.

And this, I think, it doesn't have to do with the access to the charging station. But it does have to do with the access to the jobs created from this. So the requirements say that electricians who install federally funded EV charging infrastructure have to have the EVITP certification. That's Electrical Vehicle Infrastructure Training Program certification. That's a 20 hour certification available to licensed electricians or those that have 8,000 hours of experience. Not all states license electricians.

And that is really, really important because it creates a pull mechanism to get more people into electrical training programs. It creates demand for electricians, which are very good skilled trades jobs. And what I think is particularly exciting from an equity perspective is that IBEW has been providing the EVITP training in their apprenticeship program, and has been very explicitly and intentionally recruiting women and people of color into their apprenticeship classes.

So we've seen very rapid demographic shifts in the electrical training programs that IBEW has run to make sure that there's job opportunities and training opportunities to train more women and people of color as electricians to install and maintain this charging infrastructure, but not only charging infrastructure, all of the other things that we will also need electricians for.

So the program, by requiring that standard, is creating a really solid career track opportunities for people to get into a very in-demand trade to support the clean energy transition. I think that's an equity component separate from access to vehicle charging infrastructure, but it's really valuable. And I think it sometimes gets overlooked.

JOANN MULLER: That's an interesting point. Yeah. Sue, what do you say?

SUSAN HELPER: Yeah, one more thing on the prevailing wage thing is I think there's one of the things about this prevailing wage model is it really supports this apprenticeship model that we see in the building trades that leads to a continuing supply of high quality workers that, when technology advances, trained workers advance. So we sort of think about shortages we haven't seen about a lack of ability to install fiber optic cable. Well, there are IBEW and other training centers funded by joint employer union contributions that make that training available. And these are small companies in these industries. So it's a model with a lot of benefits. And I think one of the cool things the administration is doing is spreading that model.

But specifically on charging, so the NEVI program is mostly high speed chargers every 50 miles along the interstate highway system. That's $5 billion. There's also $2.5 billion for community charging, and that's explicitly aimed at people that don't have driveways, such as myself in DC. But multifamily housing. And so there's a variety of models that, again, the grants are trying to experiment with. We don't think we have the answer about how this should work.

And so some of this may be stuff joint with utilities on light poles. It may be in apartment buildings. It may be at employers. It may be at grocery stores. And then there's specific incentives to put these in low income communities. There's also incentives in the IRA to make used cars available so that for the first time, we'll have an incentive to buy a used car.

I think it was a point made yesterday about for most people, we really focus on the need to go on a road trip. Most people of whatever income don't take 1,000 mile road trips that often. And so if you have a car with 80 miles of range, that should be plenty. I have a Volt with 60 miles of range, which is actually plenty.

So anyway, I think those are the kinds of things that we're doing.

JOANN MULLER: There's something in the NEVI program. I don't know if it's specific to NEVI or all Biden policies, but it's called the Justice 40. Could you talk about what that is?

SUSAN HELPER: Yeah, it is generally for all the programs-- and Betony may-- why don't you talk about it?

BETONY JONES: Justice 40 is an initiative that was established by executive order that applies, like Sue said, to all programs. And their goal is to ensure that 40% of the benefits of a lot of these investments are accruing to disadvantaged communities. And there's different maps to show what disadvantaged communities are based on different socioeconomic environmental burden criteria. So DOE and the other agencies have embraced this. DOE has identified over 100, maybe even over 150 programs that have to comply with Justice 40.

So the idea here is really to put disadvantaged communities, those that have borne the brunt of environmental pollution burdens that have been disinvested in systemically over years, are really at the front of the line for some of these investments and can reap the benefits rather broadly defined, depending on the community and its needs, of these federal investments.

JOANN MULLER: OK. and yet it doesn't mean that 40% of the chargers are supposed to go in those communities. Like how does the benefit flow, aside from the job that you talked about earlier that they might have installing them?

BETONY JONES: Yeah. DOE has identified eight benefits, and actually two of them are reduced burdens. And so part of that has to do with community voice in the siting of some of these different investments. With EV charging infrastructure, the benefits are access, affordability, access to the jobs, to the good family-sustaining jobs and training opportunities, contracting opportunities in the deployment of this. Those are probably the most relevant.

But additionally, on the reduction of burdens, the pollution reduction burden is significant given those issues from diesel trucks and whatnot in low income communities. So Justice 40, it's designed to be flexible and really support the process of engaging community stakeholders and organizations representing residents and disadvantaged communities in the design so that they have a voice in the process and how these decisions get made, and that those benefits are then relevant to what the specific needs of the community are.

JOANN MULLER: I understand. OK. Thank you. So we're coming to the end of our panel. And I wanted to give each of you a chance to either give us a parting thought, or perhaps something I didn't ask you about that you were dying to talk about. Here's your chance. Sue, let's start with you.

SUSAN HELPER: This was very comprehensive. No, I guess I would just say we're really trying to manage this big transition. We hopefully can achieve a lot of goals at once of a cleaner environment, better national security through less dependence on foreign entities of concern, better jobs, stronger communities.

So we have this patchwork of programs that we're trying to weave through. But we really would love to hear-- it really depends on private investment of various types, whether it's a think tank thinking about this stuff, or journalists trying to tell the story, hold us accountable, firm investments, worker investments. So I think just we're trying to experiment. We'd love to what's working well, what's not working well.

JOANN MULLER: Great. How about you, Betony? What's your final thoughts?

BETONY JONES: Thank you for the thoughtful questions, and to get to be on stage with Sue Helper, who's just a thought leader in this space. Really appreciated the conversation.

To me, final parting thoughts are just that transition is difficult, but this is such an exciting opportunity, particularly for somebody who spent decades in the climate space, which is often rather discouraging because we've made so little action. But these investments, these pieces of legislation have just enormous potential to restructure our economy in a way that lifts up workers, to redesign our energy system in a way to rapidly decrease greenhouse gases and come in line with some of the international goals that we've made.

And we're doing that because we have put working people and job creation and economic Development and national security and developing domestic supply chains at the core of those climate policies. And we'll win on climate because this will work for working people. This will create business opportunity. This will be a boon the American economy.

And so yeah, we're trying to tackle a few different problems in one fell swoop. But that also is creating this synergy where we're able to address inequality. We're able to support improved job quality. We're able to reduce greenhouse gas emissions. We're able to get stronger energy and national security as a result of these investments. I just think that's incredibly exciting, and that the opportunity far exceeds the risks or concerns that any of us may feel with the uncertainty of how exactly this transition will unfold.

JOANN MULLER: Well, it is certainly a very long list of ambitions. And we're so grateful that we had two people right in the center of it visit us from Washington, virtually and physically, to kind of give us the view from DC because it's so important.

I want to thank everyone else. And I guess we are finished with this panel. I'm not sure if there's a break or-- yes, there's a break. All right. Thank you all very much.

And now we are in