Inflation Reduction Act Sparks Clean Energy Manufacturing Boom, But Where are the Workers?

The 2022 Inflation Reduction Act will reach the one-year mark on August 16, with a stunning impact on manufacturing jobs in tow. However, a worker shortage still looms overhead. To grow the factory workforce, manufacturers must appeal to an increasingly diverse population, which challenges them to push back against legislative attacks on diversity and inclusion.

The manufacturing sector's struggles gave us MAGA, but reality doesn't match the rhetoric

In just one year, the Inflation Reduction Act has accomplished the seemingly impossible job of growing the U.S. manufacturing sector.

Factory jobs in the U.S. hit a 40-year downward spiral after peaking in 1979. Two million manufacturing jobs disappeared between 1980 and 2000. Another 5.5 million jobs were lost from 2000 to 2017.

Though manufacturing output actually continued to grow during this period, the shrinking number of people at work on the factory floor set the stage for former U.S. President Donald Trump's “Make America Great Again” campaign slogan. His message, amplified by right-wing media and punditry, conflated the loss of factory jobs with an existential threat to white, working-class men and their communities. 

The race-based MAGA message also helped candidate Trump gain financial support from conservative donors. Despite the rhetoric, though, the actual “working class” — defined by households without a four-year college degree — is quickly diversifying.

In an April report, the Center for American Progress described how the MAGA focus on white factory workers glosses over actual working-class demographics.

“Throughout the 2016 and 2020 election cycles, the term became, in some circles, nearly synonymous with white workers in manufacturing or skilled trades. In fact, today’s working class is more diverse than ever,” the report reads. "Black, Hispanic, and other workers of color make up 45 percent of the working class." Women make up almost half.

Diversity in the working class is driven by the rise of employment in service industries, especially retail, health care, food service and accommodation, and building services, Center for American Progress and other analysts report. 

In a 2020 report, the U.S. Bureau of Labor Statistics underscored the bigger picture of working-class diversity: “Manufacturing’s falling share of employment coincided with job growth in service-providing industries, including professional and business services, education and health services, and leisure and hospitality."

The Inflation Reduction Act and a new day for factory jobs

When manufacturing jobs peaked in 1979, they accounted for 22 percent of total non-farm employment in the U.S., according to the Bureau of Labor Statistics. By 2019, the share of manufacturing jobs fell to just to just 9 percent.

It remains to be seen if the Inflation Reduction Act can bring the sector's share of the job market closer to its former glory. However, the number of manufacturing jobs is clearly growing — and many of them are in clean energy.

By May 2023, the strategic communications firm Climate Power counted more than 142,000 clean energy jobs created by the Inflation Reduction Act, spread among 191 projects.

The sustainable business organization E2 is also tracking clean energy jobs. With an exclusive focus on private-sector investments, E2 reported on 16 major clean energy projects that were announced in July alone. E2 received data on 14 of those projects, and the total came to nearly 3,600 jobs and $2.2 billion in new investments.

“Since the Inflation Reduction Act (IRA) took effect in August 2022, businesses have announced at least 205 major new clean energy projects across 38 states," E2 wrote in an announcement last week. "Of the projects with publicly available estimates, $86 billion in new private capital would be invested and nearly 70,000 jobs created." The list is available on its website. 

The factory doors are open, but where are the workers?

Announcing a new factory is one thing. Filling the factory floor is quite another. In 2021, the National Association of Manufacturers commissioned a workforce study that outlined a growing shortfall in skilled labor. “The manufacturing skills gap in the U.S. could result in 2.1 million unfilled jobs by 2030,” the trade group warned.

Competition for workers from non-factory clean energy stakeholders is another factor working against manufacturers. Energy policies during the Barack Obama administration resulted in skyrocketing growth in the areas of solar panel installation and wind farm construction, among other sectors. Some of these out-of-factory industries already have experience in recruiting clean energy workers including veterans, women and historically underserved communities.

What’s a clean energy manufacturer to do?

To attract skilled workers, clean energy manufacturers can start by implementing diversity, equity and inclusion (DEI) programs. When done correctly, DEI programming has a proven track record in helping companies to recruit women in non-traditional fields, bring more people of color into teams and leadership roles, and make the workplace more supportive and welcoming for those in the LGBTQ+ community. 

However, the in-house approach to DEI is no longer sufficient. In the run-up to the 2020 election, former President Trump deployed his rhetorical firepower against diversity training, adding fuel to an ongoing wave of anti-abortion and anti-LGBTQ+ legislation. The violent tenor of the legislation is reflected in violence on social media and anti-LGBTQ+ violence on the streets, as recently illustrated by actions against AB InBev’s Bud Light brand and the retailer Target.

Against this backdrop, manufacturers need to look beyond workplace DEI programs, and the 2024 elections are a good place to start. To the extent that clean energy candidates are synonymous with human rights candidates — and they are, for the most part — clean energy manufactures can help ensure that an informed, active electorate turns out to support the rights of women, people of color and LGBTQ+ people.

As organizations like Time to Vote, HeadCount and BallotReady look to encourage voter participation, they rely on corporate partnerships to help spread the word. Companies like manufacturers also hold the influence to steer powerful trade organizations like the U.S. Chamber of Commerce and the National Association of Manufacturers to support human rights and climate action candidates.

The U.S. manufacturing sector has finally turned a 40-year-old corner. To make sure it doesn’t drop off a cliff, manufacturers need to prioritize diversity and inclusion beyond the factory gates.