In Michigan, we innovate. From cars to medical equipment, aerospace manufacturing to defense vehicles, and even energy production, Michigan remains one of the top states in America for high-paying manufacturing jobs. In fact, nearly 20% of Michigan’s economy is based in manufacturing. That’s nearly $100 billion of economic output and over half a million jobs for our state.
Our economy is as strong as it is because we don’t just look to the jobs of yesterday, we are retooling to compete in this global economy for the high-paying jobs of today and tomorrow. The pandemic hit everyone hard, but one major bright spot was our clean energy and transportation industry.
While overall job recovery from the pandemic was slow, Michigan’s clean energy sector grew by over 20% in the latter half of 2020, leading our state’s economic recovery. Additionally, the shift to hybrid and electric vehicles brought over 24,000 new jobs back to our state. In total, clean energy in Michigan accounts for over 100,000 jobs, with nearly 20% of those jobs being in rural communities, and that number is growing fast. In other words, if we hadn’t started transitioning to a greener economy when we did, many people who are working now and taking home a check would not be.
That brings us to the transformative climate, healthcare and economic investments made in the bipartisan Inflation Reduction Act (IRA), which President Biden signed into law last month. The IRA will hasten the transition to a cleaner economy, creating scores of high-paying jobs across Michigan and helping households save on their energy bills, all while reducing toxic greenhouse gas emissions. The benefits to our state will be tremendous, as highlighted by the members of our statewide congressional delegation who lent their support to this landmark piece of legislation.
A study commissioned by the BlueGreen Alliance estimates that the investments included in the IRA will create as many as 9 million jobs nationwide over the coming decade — all supported by strong labor and prevailing wage standards codified in the bill. Through record investments in green power sources such as wind and solar, the bill is projected to create 5 million jobs in the clean energy sector. The legislation is a particular boon to the manufacturing industry — a critical component of Michigan’s economy — as tax credits for the production of critical technologies like solar panels and battery cells prompt innovation and hiring.
Clean energy jobs already pay 25% more than the national median, putting more money into people’s pockets, and these jobs are far more likely to include health care and retirement benefits. Once more, the median wages in solar, wind and grid modernization are higher than jobs in coal, natural gas and petroleum fuels. All people — even those who do not work in the clean energy economy — will benefit greatly from this investment. More higher-paying jobs mean other companies wanting to compete and hire workers will need to pay more, raising wages across the board.
But perhaps even more importantly, the transition to electric vehicles (EVs) that the IRA has encouraged will lead to huge savings on a family’s daily commute. EVs cost less to power than those powered by internal combustion engines, helping keep the price to power a vehicle low. It’s why I championed bipartisan legislation to enhance EV charging infrastructure in our state. The energy equivalent right now to fully power an EV is the equivalent of paying $1.40 for a gallon of gas. And that’s with today’s rampant price gouging, with gas prices remaining stubbornly high. With advanced battery technology and wider EV adoption, that cost will only go down. The IRA, with rebates up to $7,500 toward the purchase of a new electric vehicle or up to $4,000 toward the purchase of a used electric vehicle for low and moderate-income families, helps to put the cost of an EV within reach for all Americans.
Much of the commentary around the Inflation Reduction Act has focused on the significant impact that the legislation will have on our climate, and rightfully so. Predicted to help lower greenhouse gas emissions by as much as 40% by 2030 — and 50% when coupled with the bipartisan Infrastructure Investment and Jobs Act of last year — it makes significant strides to curb the climate crisis. But let’s not forget about the economic benefits as well. At a time when many are feeling the pinch of inflation and rising gas prices, this legislation will bring welcome respite in the form of good jobs and savings on energy costs.
The Inflation Reduction Act is a big win for the state of Michigan — a win that is only possible because of bold leadership and a strong call for change from millions of residents across our state.
State Rep. Padma Kuppa, a mechanical engineer and former member of the Michigan House Energy Committee, represents Troy and Clawson in the Michigan Legislature.