The Blue Bird factory in Fort Valley, Georgia, has been something of a winner in the state’s race to build itself into a production hub for electric vehicles. Flush with federal funds to build electric-powered school buses, the company has been a cheerleader for the Biden administration’s drive to reduce emissions on the road.
But the company, the largest employer in Peach County, was dealt a defeat when its workers voted to unionize after years of complaints about unsafe working conditions and stagnant wages, said Maria Somma, the director of organizing at the United Steelworkers union.
“This is a company that hasn’t invested in its workforce, and it has a very high turnover rate, I believe, because of this,” said Somma.
This episode at Fort Valley represents hope for the Biden administration, which wants to see its large investment plans translate into raising EV production and, at the same time, creating good-paying jobs. But most of the EV plants announced so far are emerging in right-to-work states like Georgia and elsewhere in the South, where winning union elections is extraordinarily hard.
Even before Congress passed the Inflation Reduction Act (IRA) and CHIPS Act last year, opening the door to federal funds for new EV investments, the South was already winning over the auto-sector. With a boom in manufacturing jobs related to the industry popping up in the South, it has gradually begun to displace even the Rust Belt as a central node for automakers, according to a 2019 study by the Federal Reserve Bank of New York.
Right-to-work laws argue that they create jobs by attracting firms with a lower cost of labor that comes with a reduced union presence.
States with right-to-work laws have attracted the lion’s share of EV investments in the last year, which seems to prove them right. According to an analysis of investments made to states since the IRA was passed, nine of the top ten recipients are right-to-work states, with Georgia taking in the most with nearly $13 billion. Among the ten states with the most investments from the CHIPS Act, seven are right-to-work states.
Union representation is low in most of these states. For example, only about 5.4% of Georgia’s workers were represented by a union in 2022, according to the Bureau of Labor Statistics. This proportion is even lower in North Carolina, a state that has won investments under both bills, at 3.9%.
Despite the Biden administration’s hopes to boost union jobs, there have been numerous high-profile attempts to organize at manufacturing plants in the South that have failed. In 2017, workers at a Boeing plant in South Carolina rejected a move to form a union there. More recently, in March, workers at a Nissan factory in Tennessee also failed to unionize after two-years of legal wrangling.
Somma said that she is eager to see more manufacturing jobs created in the U.S., but said it would be hard to see them translate into union ones because of the South’s growing predominance in the sector.
“We know why employers are locating to the South” as opposed to union-friendly states, said Somma. “The problem is that they are the only ones that can make some of these products.”
Opponents of right-to-work policies, including unions and progressives, argue that there is no clear evidence that they support job growth. Instead, they say that these policies only consistently depress wages and reduce unionization rates.
Scott Lincicome, the vice president of general economics at the libertarian CATO Institute, said that right-to-work policies are just one of a number of reasons that draw EV investments to the South, but that they are an important one.
"You have to disentangle a lot of different factors," said Lincicome. "But it is pretty undeniable that right-to-work is playing a role in the long-term trend for American manufacturing."
It is difficult for the federal government to shift this course, despite the administration’s support for unionization drives like the one at Fort Valley. Jennifer Sherer, a senior policy coordinator at the liberal Economic Analysis and Research Network (EARN) Worker Power Project in Washington, D.C., said that the lack of enforcement methods in these bills forces the administration to rely on the “bully pulpit” of the federal government to achieve their policy goals.
“That's the overarching constraint that the Biden administration is operating within here," said Sherer. "The state laws that are either in place or not in place are really going to hamstring some states from getting the most bang for their buck from these investments."
One way that has kept unions at the table has been the provisions of the IRA and CHIPS Act that incentivize the hiring of apprentice workers through tax credits for compliant companies.
Apprenticeships are training programs designed to develop workers’ skills in a trade without a four-year university degree, and they are regulated by the U.S. Department of Labor. Under the IRA and CHIPS Acts, companies are encouraged to make efforts to hire a percentage of these workers to become eligible for tax credits or to demonstrate at least a “good-faith effort” to do so.
Companies working on EV manufacturing already operate their own apprenticeship programs, including Tesla and Toyota, both union critics, but many others also operate with their involvement. According to Labor Department data, 56% of all active registered apprentices are in unions. Even in the right-to-work states receiving the most EV investments, including Georgia, Tennessee, and Texas, more than 50% of active apprentices were unionized.
Apprenticeships can work as a compromise between unions and companies, said Paul Puente, the executive secretary for the Houston Gulf Coast Building and Construction Trades Council in Harris County, Texas, which counts more than 10,000 members locally and works with 23 local construction unions.
His program trains workers to meet the needs of employers, who, he said, agree to hire union members. In return, the unions sign contracts that forbid actions like work stoppages or pickets as a concession. However, Puente said it can be difficult to operate in a right-to-work state like Texas because of a “negative stigma in the South” about unions.
"We're not our grandfather's unions," said Puente. "We want to see people benefit, and we want employers to benefit too."
