The fourth report in a joint research project by Resources for the Future (RFF) and Environmental Defense Fund (EDF) examines US federal labor programs and policies that can support fossil fuel workers through the transition to clean energy. RFF’s Wesley Look, Molly Robertson, and Dan Propp, along with EDF’s Jake Higdon, contributed to the report described in this blog post.
Workers and communities that historically depend on fossil fuels as a bedrock of their local economy—including the production of coal, oil, and natural gas and the generation of electricity—are likely to experience disruptions as society shifts to low-carbon alternatives. Given these challenges, Resources for the Future and Environmental Defense Fund have teamed up to examine policies and programs that promote fairness for workers and communities in the transition to a low-carbon economy, often referred to as a “just transition.” We have produced a series of reports, grouped thematically to summarize the “tools in the toolbox” that can aid policymakers as they consider how to develop effective strategies for enabling a just transition.
The new report—the fourth in our series—reviews a range of US workforce policies designed to ensure fairness for workers and communities during the transition to a low-carbon economy. For ease of analysis, we group programs into the two main categories of workforce development and labor standards (Figure 1).
Figure 1. Organization of labor policies
The workforce development programs we’ve studied leverage the following four primary activities: career services, job training, direct financial and ancillary supports, and research and programmatic technical assistance. Career services include programs that help workers find and retain employment, including access to labor market information and personal marketing tools (e.g., résumé-writing guides, job interview prep), skill assessments, career planning, and job search assistance. Job training includes capacity building for workers, such as classroom vocational training, on-the-job training, and apprenticeships. Job training also involves “soft” skills development, such as language proficiency, time management, and financial literacy; basic education, ad hoc technical assistance, and mentoring. Direct financial support includes programs that help workers undertake their job search and training by providing direct support in the form of cash payments to compensate for lost wages. Ancillary supports include childcare, subsidized housing, and substance abuse therapy. Research and programmatic technical assistance consist of initiatives that leverage existing government research and logistical capacity to support various workforce development efforts.
The labor standards we review for this report generally target the following four major areas: fair compensation and benefits, unionization protections, transition support, and occupational safety. Fair compensation and benefits cover the minimum thresholds for salary and benefits. Unionization protections involve standards that enhance the ability of workers to meaningfully participate in unions. Unions have played an important role in empowering workers to negotiate better pay, benefits, and conditions from employers. Transition support refers to policies that reduce long-term unemployment and the hardships associated with temporary unemployment. Such policies can specify standards for the treatment of workers who are transitioning between jobs, and in some cases can make resources available to workers in transition. Occupational safety relates to standards and requirements for working conditions that reduce workplace hazards for employees.
Key Insights from the Report
Our review of these programs and their effectiveness yields some valuable insights into how federal labor policy can help facilitate a fair transition to a clean energy economy. We highlight the following key takeaways from the report:
- Given the complex nature of the workforce development system, centralized service delivery and effective interagency and intergovernmental coordination are essential.
- Workforce development programs can improve outcomes for workers in transition if the programs are tailored for local communities and target populations in need.
- Because some fossil energy communities (e.g., eastern coal communities) have a history of poverty and opioid abuse, wraparound supports for workers undergoing transition, such as childcare programs and substance abuse therapy, may be especially important in establishing conditions for success in workforce development programs.
- The timing of workforce intervention matters. For example, evidence shows that notifying workers in advance if they will lose their job can reduce the amount of time they spend unemployed and improve their wages when they find new employment.
- Close collaboration with industry and employers in the creation and management of workforce development services is central to various US workforce programs and likely will play an important role in designing effective just transition workforce policies.
- Labor standards can create basic protections for workers in transition; for instance, by requiring advance warning before termination (e.g., the Worker Adjustment and Retraining Notification Act), providing temporary benefits such as employer-sponsored health care (e.g., the Consolidated Omnibus Budget Reconciliation Act), and ensuring that workers are protected against workplace hazards in their new jobs (e.g., the Occupational Safety and Health Administration).
- Compensation standards, such as minimum wage, have been correlated with periods of strong economic growth and may improve equity by boosting earnings for low-income workers. However, research also indicates that a higher minimum wage may lead to higher rates of unemployment. Therefore, while compensation standards may help support the resilience of both workers and the economy in a just transition context, policymakers should carefully consider the pros and cons of such policy.
- Labor standards can help bolster unionization, which leads to positive outcomes for workers and the economy as a whole, including more equitable compensation, an active voice for workers in their firms and communities, reduced job turnover, and greater incentives to invest in productivity-enhancing job training.
Next Steps for a Just Transition
Delivering workforce development support and labor standards for fossil fuel workers in transition is one of several approaches to viable solutions that we cover in our report series on the shift to a clean energy economy. In the coming months, we will publish additional case studies on communities in transition, reports on just transition policies in Europe, and a report that synthesizes lessons learned across all policy types.
Read the full workforce development report, Labor Policies to Enable Fairness for Workers and Communities in Transition.
Learn more about this series by visiting the project page for Fairness for Workers and Communities in Transition.