Energy jobs are key to economic recovery from the pandemic

Energy jobs are key to economic recovery from the pandemic

Energy workers are paid more, their jobs came back more quickly, and they have greater growth opportunities than almost any other sector, new report finds.

Putting people to work in the energy industry will reap more benefits for the U.S. economy than putting people to work in almost any other sector. That’s just one of a multitude of findings in a new report released this week from the National Association of State Energy Officials (NASEO), the Energy Futures Initiative, and BW Research.

The report, Wages, Benefits, and Change, a supplement to the annual U.S. Energy and Employment Report, reviews job growth over the past 5 years taking COVID-19 into account. At 132 pages, the comprehensive report covers all sectors of the energy industry from exploration, fuels, generation, transmission and distribution, efficiency and vehicles.  

First, the report shows that energy sector jobs are on the rise. In the five years preceding the COVID-19 pandemic, the U.S. energy sector grew by 12 percent, adding almost one million jobs (915,000 said the report), which was double the growth of the overall U.S. labor market. Indeed, new energy jobs from 2015 through 2019 accounted for almost 11 percent of total job growth in the nation, according to the report.

Digging a bit into those numbers, coal jobs declined 18% and that number was offset by the increase in employment in petroleum and natural gas (up 9%) as well as the job growth in wind and solar electricity generation (up 22%).

Energy jobs rebounded more quickly than other sectors. Once the pandemic hit, energy workers did take a hit, with more than one million jobs lost from March 2020-May 2020, however almost one third of those jobs came back between June and December of 2020. Further at peak job losses during April of 2020, 12% of the energy sector was impacted compared to 20% of the overall U.S. economy.

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Energy jobs pay more. The report shows that on average, energy wages are 34% higher at an average of $25.60 per hour than the median hourly wage for U.S. workers, which is $19.14.  Looking deeper, the median hourly wage for a nuclear energy worker (the highest paid energy sector job) is roughly $39 and for energy storage (the lowest paid energy sector job according to the report) is about $24. (See chart). What’s key about this finding is if workers from the sectors of the US economy that have yet to rebound (travel, tourism, hospitality) were to move into an energy career, they could end up significantly increasing their wages if the right training were in place.

Interestingly, Philip Jordan, VP at BW Research said in a briefing about the report, that they were able to find an energy efficiency job in all 3000+ counties of the United States except for six. The energy efficiency sector is the largest employer in the entire energy sector, with 2.3 million people employed in some form of energy efficiency as of 2019.

Overall Industry Crosscut Wages, 2019. Credit: Wages, Benefits, and Change Report

Finally, the report notes that the energy sector is experiencing tremendous change, undergoing a transition from fossil-fuel based energy to carbon-free energy and with that change comes an enormous opportunity for growth. If policymakers are smart about workforce development, they could create pathways and frameworks that support workers who may lose their jobs in the future as a result of the global transition to clean energy.

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Philip Jordan used the example of a natural gas pipeline worker who could be negatively impacted by a phase-down of natural gas at some point in the future. He said you can see how the Biden American Jobs Plan lays out a path for that worker.

“So, in the short term, part of the answer is ‘we’re going to replace all the lead pipes and we’re going to modernize our existing infrastructure.’ That’s the work that needs to happen tomorrow,” he said. “But then also looking out further in the plan you start to see things like hydrogen and energy storage…those are longer term strategies,” he added, explaining that pipeline construction skills could be transferable to the build-out of hydrogen infrastructure.  It’s this kind of thinking that he hopes state policymakers will undertake when thinking about supporting today’s workers but also thinking about how they will apply the same skills over a longer time horizon.

The report is comprehensive and Jordan pointed out that different parts of the country will approach job growth in the energy sector differently. For example, offshore wind could be an industry to boost on the east coast whereas other regions may wish to focus on T&D or energy efficiency. He encourages state policymakers and other leaders to read it carefully and completely.

“We don’t want people to be sort of cherry picking data for what they think makes the most sense for them,” he said.

You can download the entire report here.

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