Inflation-reduction bill creates thousands of union jobs in Minnesota – and other labor news • Minnesota Reformer

Take a seat in the Break Room, our weekly roundup of jobs news from Minnesota and beyond. This week: the Inflation Reduction Act's two-year impact on employment; what to make of the employment revision; Minnesota is the state with the most nurses; Kim's will close shortly after the union election; and Canadian railroad workers return to their jobs.

Two years of inflation reduction law

The Inflation Reduction Act, passed two years ago, delivers on its promise to accelerate the country's transition to renewable energy while creating well-paying, union jobs.

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

This includes 105 clean energy projects in Minnesota – solar, wind, hydro and battery storage – that will create an estimated 10,382 jobs.

“Solar energy is booming,” said Jason George, executive director of the International Union of Operating Engineers Local 49, which represents workers in Minnesota and the Dakotas. “It has spurred the development of much-needed energy and infrastructure projects.”

The IRA is also in the process of transforming the workforce that builds those thousands of solar farms from low-wage migrant workers to union workers. To qualify for the 30% tax credit, project developers must pay a local wage, usually closely aligned with the local union wage, and they must hire a minimum number of apprentices. Projects that don't meet labor standards may only qualify for a 6% credit.

The higher wages for construction workers have little impact on the overall cost of projects, especially compared to the high costs of lawyers and consultants required to comply with regulations, Heat map'S reporting. Still, developers say the higher tax credit is “worth it.”

George said he's seeing the biggest change in the Dakotas, where utilities don't reliably use unions for solar and wind projects like they do in Minnesota. He's hearing project owners tell developers that new projects must be unionized to receive the tax credits.

“We're like a guarantee,” George said. “You can try to collude with a non-union contractor who might want to offer a training program, but we've been doing this for 100 years.”

Many states are struggling to expand their apprenticeship programs. George says the labor shortage is a real challenge for the construction industry, but not for his union. In IUOE Local 49, 300 Minnesota public high school students are working on apprenticeships, and another 500 have met eligibility requirements.

George said Minnesota is also investing billions of dollars in transmission lines to help the power grid meet growing electricity demand.

Minnesota isn't seeing the same growth as comparable states like Wisconsin, which is expected to add 42,366 new jobs, or Colorado, which is expected to add 78,759 new jobs. The biggest increases are in Sun Belt states like California, Texas, Arizona and Nevada. That's partly because of their climate, but George says Minnesota also needs to compete more with tax incentives if it wants to attract big projects.

However, the report contains some reservations. For example, not all planned projects may actually be completed. In addition, determining eligibility for funding is a complicated process that ultimately lies with the federal government.

There is, however, an important caveat to labour standards: they apply only to the construction of renewable energy projects, not to their operation after they are completed. Moreover, the number of people needed to maintain a solar farm or wind turbine is far fewer than the number needed to build them.

Employment figures are revised significantly downwards

The US Department of Labor published a comprehensive revision of its employment figures on Wednesday. According to the figures, 818,000 fewer jobs were created in the twelve months to March than originally expected. The downward revision of around 28 percent follows a poor labor market report from last month, which increased fears of a possible recession and calls for an interest rate cut by the US Federal Reserve.

The downward revision, made as part of an annual reconciliation of wage and salary survey data with state unemployment insurance figures, is larger than normal but not a cause for panic, according to many experts. (Nor was it a “huge scandal,” as former President Donald Trump said.)

Dean Baker of the Center for Economic and Policy Research points out that the new figures show average monthly job growth of 172,000, only slightly below the 179,000 jobs in the three years before the pandemic.

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

The Minnesota Department of Employment and Economic Development updates its employment figures monthly. The statewide downward revision does not change the fact that new jobs were created in the state in eight of the past twelve months.

Minnesota is the No. 1 state for nurses

According to a HealthJob analysis of state data, nurses in Minnesota are the highest paid in the country when taking into account the local cost of living.

In Minnesota, a registered nurse earns an average of $94,830 per year—the 12th highest average annual salary in the country. However, the significantly higher salaries in states like California ($139,770) and Hawaii ($120,110) don't stretch that far. In fact, nurses in Hawaii are the lowest earners when you factor in the cost of living.

Minnesota's higher wages are due in part to higher levels of unionization (though Hawaii and California both have higher levels of unionization). About 38% of Minnesota's nurses are union members, and thousands of them won an 18% raise in 2022. Mayo Clinic, the state's largest employer, also pays its nurses salaries that are consistent with what the nurses union negotiates at other health systems, even though the vast majority of its nurses are nonunion.

Kim's closes shortly after union election

Minneapolis restaurant Kim's announced its closure in late August, less than two months after employees voted in a contentious and highly publicized election to unionize with Unite Here Local 17. In an Instagram post Thursday, the restaurant cited “ongoing financial losses” as the reason for the closure.

James Beard Award-winning restaurant owner Ann Kim urged the restaurant's 60 or so workers to vote against unionization, telling them in a leaked message: “If the promises of a union sound too good to be true, that's because they are.”

Kim's is the only one of Kim's four restaurants that is unionized, and the only one she plans to close. Kim and the union had not yet negotiated an initial contract, meaning her labor costs have not yet increased due to the union election.

The restaurant appears to be facing more difficulties than Kim's other restaurants, including ongoing road construction along Hennepin Avenue and vandalism. The restaurant announced last month that it would reduce its hours, a decision the union sharply criticized for being made without their consultation.

A Unite Here spokeswoman issued 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, relocation and removal rights we deserve.”

Emails seeking comment from Kim were not answered.

Canada's labour minister intervenes in rail lockout

Canada's two largest railroads locked out more than 9,000 union members on Thursday after negotiations with the Teamsters failed, forcing the Canadian government to step in immediately to avert the threat to supply chains across North America.

Canada's labour minister has ordered rail operators Canadian National and Canadian Pacific Kansas City to submit to binding arbitration by an independent party and called on union members to return to work. Workers at Canadian National returned to their jobs on Friday, while the lockout at Canadian Pacific Kansas City is still ongoing.

The move was welcomed by the railroads, which had pushed for binding arbitration, while the Teamsters said they would challenge the constitutionality of the order. The two sides, which have been negotiating for a year, continue to disagree on provisions regarding working conditions such as shift scheduling.