Inflation Reduction Act creates thousands of union jobs in Minnesota — and other labor news • Minnesota Reformer

Take a seat in the Break Room, our weekly round-up of labor news in Minnesota and beyond. This week: the Inflation Reduction Act’s impact on jobs two years on; what to make of the jobs numbers revision; Minnesota is No. 1 state for nurses; Kim’s will shutter shortly after union vote; and Canadian railway workers begin returning to work.  

Inflation Reduction Act two years on

The two-year-old Inflation Reduction Act is fulfilling its promise of accelerating the country’s transition to renewable energy while creating good-paying, union jobs along the way.

The Climate Jobs National Research Center, a labor-led organization focused on clean energy jobs, tallied 6,285 utility-scale clean energy projects in development across the country that could be eligible for IRA tax credits tied to labor standards.

That includes 105 clean energy projects in Minnesota — solar, wind, hydro and battery storage — that are estimated to create 10,382 jobs.

“Solar is exploding,” said Jason George, business manager for the International Union of Operating Engineers Local 49, which represents workers across Minnesota and the Dakotas. “It’s really spurred development of much needed energy projects and infrastructure projects.”

The IRA is also transforming the labor force building those thousands of solar farms from one reliant on itinerant, low-wage workers to one made up of union tradespeople. To qualify for the 30% tax credit, project developers must pay a prevailing wage, which usually tracks closely to the local union wage, and they must hire a minimum number of apprentices. Projects that don’t comply with the labor standards may be eligible for just a 6% credit.

The higher wages for construction workers have a small impact on the overall cost of projects, especially in comparison to the high cost of lawyers and consultants needed to ensure regulatory compliance, according to Heatmap’s reporting. Still, developers say getting the higher tax credit is “worth the squeeze.”

George said he’s seeing the biggest shift in the Dakotas, where utility companies haven’t reliably used union labor on solar and wind projects like in Minnesota. He said he’s hearing that project owners are telling developers that new projects have to be union built to ensure they get the tax credits.

“We’re like a guarantee,” George said. “You can try to mess around with a non-union contractor that might try to start an apprenticeship program, but we’ve been doing this for 100 years.”

Many states have struggled to scale up apprenticeship programs. George says the labor shortage is a real challenge in construction but not for his union. IUOE Local 49 has 300 Minnesota public high school students working their way toward an apprenticeship, and another 500 people have met the entrance requirements.

George said there’s also billions of dollars in investments in transmission lines coming to Minnesota so the electric grid can handle the increasing demand for electricity.

Minnesota hasn’t seen the same growth as its peers like Wiscsonsin, which is projected to add 42,366 jobs, or Colorado, with a projected 78,759 jobs. The biggest gains are in the Sun Belt states like California, Texas, Arizona and Nevada. That’s partly a function of their climates, but George says Minnesota also needs to compete harder with tax incentives if it wants to attract big projects.

There are some caveats to the report: Namely, that not all projects being planned may actually get finished, and determining eligibility is a complicated process that is ultimately up to the federal government.

There’s also an important caveat to the labor standards: They only apply to the construction of renewable energy projects, not the operations once they’re complete. Plus, the number of people needed to maintain a solar farm or wind turbine is far less than the number needed to build them.

Jobs numbers get a big downward revision

The U.S. Department of Labor issued a major revision to its jobs figures Wednesday, saying the economy added 818,000 fewer jobs than they initially thought in the 12 months ending in March. The downward revision of about 28% comes on the heels of a sour jobs report last month, which raised fears of a possible recession and increased calls for the Federal Reserve to lower interest rates.

The downward revision, which was made as part of an annual reconciliation between payroll survey data and state unemployment insurance filings, is larger than normal, but not cause for panic according to many experts. (It also wasn’t a “massive scandal,” as former President Donald Trump said.)

The Center for Economic and Policy Research’s Dean Baker notes that the new figures put monthly average job growth at 172,000 a month, just a tad lower than the 179,000 in the three years prior to the pandemic.

“Even with the downward revision, we were still creating jobs at a very healthy pace,” Baker writes.

The Minnesota Department of Employment and Economic Development revises its jobs numbers monthly, and the national downward revision doesn’t change the fact that the state added jobs in eight of the past 12 months.

Minnesota is No. 1 state for nurses 

Minnesota nurses are the best paid in the country on average when taking the local cost of living into consideration, according to an analysis of government data by HealthJob.

The average registered nurse earns $94,830 per year in Minnesota — the 12th highest annual average salary in the country. But nurses’ significantly higher salaries in states like California ($139,770) and Hawaii ($120,110) don’t stretch as far. In fact, nurses in Hawaii are the lowest earners once the cost of living is taken into account.

The higher wages in Minnesota are driven in part by the higher rate of unionization (although Hawaii and California both have higher rates of unionization). Roughly 38% of nurses in Minnesota are union members, thousands of whom won 18% pay raises in 2022. Mayo Clinic, the largest employer in the state, also pays nurses salaries in line with what the nurses union negotiates at other health systems even though the vast majority of their nurses are not unionized.

Kim’s closes shortly after union vote

Minneapolis restaurant Kim’s announced it will shutter at the end of August, less than two months after workers voted to unionize with Unite Here Local 17 in a contentious and highly publicized election. In an Instagram post on Thursday, the restaurant cited “ongoing financial losses” as the reason for the closure.

Restaurant owner Ann Kim, a James Beard Award winner, urged the roughly 60 workers at the restaurant to vote against unionizing, telling them in one leaked message that “If a union’s promises sound too good to be true, it’s because they are.”

Kim’s is the only restaurant of the four Kim owns to unionize, and the only one she said she will be closing. Kim and the union hadn’t negotiated a first contract yet, meaning her labor costs hadn’t increased yet because of the union vote.

The restaurant has seemed to face more difficulties than Kim’s other restaurants, including on-going road construction along Hennepin Avenue and vandalism. The restaurant announced last month that it would shorten its hours, a decision the union blasted for being made without their consultation.

A Unite Here spokeswoman shared a statement on behalf of Kim’s workers saying, “Because we are organized, this is not the end of the story for us. We will fight for the severance, health care, relocation and recall rights we deserve.”

Emails seeking comment from Kim’s were not returned.

Canada labor minister intervenes in railway lock-out 

The two largest railroads in Canada locked out more than 9,000 unionized workers on Thursday after negotiations with the Teamsters broke down, which prompted the Canadian government to quickly intervene to head off the threat to supply chains across North America.

The Canadian labor minister ordered the railroad operators — Canadian National and Canadian Pacific Kansas City — into binding arbitration mediated by an independent party and ordered the union members to return to work. Workers at Canadian National returned to work on Friday while the lockout continues at Canadian Pacific Kansas City.

The move was applauded by the railroads, which had pushed for binding arbitration, while the Teamsters say they’ll challenge the constitutionality of the order. The two sides, who have been negotiating for a year, remain deadlocked over provisions governing working conditions like shift scheduling.