Dems’ climate measure ties tax credits to prevailing wage, apprenticeship

Matt Campanario, executive director of the Carpenters Training Institute, leads Sen. Tina Smith on a tour of the LJ Shosten Training Center in St. Paul, which houses the union’s pile driver and millwright apprenticeship programs.

The Inflation Reduction Act, signed into law by President Joe Biden in August, promises the most aggressive action to combat climate change in U.S. history, a $369 billion investment that aims to reduce carbon emissions by 40% this decade.

But what most excites some union leaders about the IRA are long-sought provisions that will ensure the transition to a cleaner-energy economy creates and sustains union jobs – and taps into the job-training capacity of unions’ registered apprenticeship programs.

In a win for Building Trades unions, businesses looking to claim tax credits available under the IRA must commit to paying prevailing wages and employing a minimum number of registered apprentices on their jobsites.

The requirements apply to most tax credits that were greatly expanded by the historic legislation, which Democratic majorities spent months shepherding through Congress.

The tax credits will spark private-sector construction of energy-efficient commercial buildings, housing and electric vehicle charging stations, as well as investments in energy sources outside of fossil fuels.

An analysis released by the University of Massachusetts at Amherst projects the IRA’s climate and energy investments will create 9 million jobs over the next decade.

By insisting on strong labor provisions, said Adam Duininck, director of government affairs for the North Central States Regional Council of Carpenters, Biden and other lawmakers ensured those investments will create good-paying jobs for skilled American workers.

“The expanded tax credits included in the Inflation Reduction Act will benefit businesses that pay prevailing wages and hire our apprentices,” Duininck said. “Paying workers prevailing wages will further support our communities where workers live and spend their money. This will give local businesses and our public services like education, public safety and well-maintained infrastructure the financial backing they should be receiving from hard working, middle-class workers.

“Our communities miss out on billions of tax dollars by unethical business practices of dishonest contractors. It is great to see support for those who conduct business in a manner that benefits people rather than lining the pockets of only a few individuals.”

Carpenters apprentice Amanda Heiser tells Smith recently passed infrastructure and climate bills “definitely provide a more stable future” for apprentices like her.

The IRA also includes penalties for firms that pledge to pay prevailing wages but don’t follow through, requiring them to make workers whole – plus interest.

Meanwhile, industrial unions hailed domestic content requirements included in the IRA, which will encourage the use of American-made batteries, solar and wind components and other technologies on clean energy projects.

The requirements will stimulate job growth in the U.S. manufacturing sector, said Jason Walsh, director of the BlueGreen Alliance, which brings together unions and environmental groups.

“Few pieces of legislation this century have come close to such sweeping job creation potential,” Walsh said. “This bill’s investments offer an opportunity to support and create good union jobs and for workers and communities to reap the economic gains of the clean economy.”

For the Biden administration, the IRA delivers – again – on a campaign promise to make union jobs the focus of its economic policy.

A $1 trillion infrastructure law, which Biden signed in November 2021, is already creating work for union tradespeople in Minnesota. Over 100 projects statewide have tapped into $1.4 billion in federal funding available through the bill so far, including a $22 million project at Minneapolis-St. Paul International Airport.

Prevailing-wage rates are set by the federal government and vary by location. The rates reflect the average wage paid to similarly employed workers in a specific occupation in that area.

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