Authored by Vince Bielski via RealClearInvestigations (emphasis ours)
The construction workers who traveled to central Kansas to erect a wind farm for utility giant American Electric Power thought it would be a good job. Then they fell victim to the troubling side of the renewable power industry.
The nomadic band of workers had come to the Flat Ridge III project from Texas, Michigan and other states to install 62 turbines with towers as tall as 300 feet using cranes and heavy machinery. But after a few months the project broke down. Subcontractor C2 Logistics Solutions stopped paying the crew, causing workers to protest and walk off the job. Some quit in disgust.
At least 60 employees and possibly dozens more are owed hundreds of thousands of dollars in wages, overtime and travel expenses, according to workers and a lawsuit against the company. “We still haven’t been paid, from the supervisors on down to the hands,” says David Saucedo, the former C2 general foreman who say he’s owed about $10,000. “You have to understand, I went late on my rent and car payments because I didn’t get paid.”
Flat Ridge III is a cautionary tale as renewable power balloons into a big industry that may eventually employ a few million mostly blue-collar workers. The Biden administration stresses the good-paying jobs that await Americans in selling its plans for a fast expansion of clean power to curb climate change. Marketers burnish this upbeat image, with photos on company websites of men and women smiling under hardhats amid sunshine and blue skies.
But that’s not the on-the-ground reality in many states today. Sure, skilled workers who hook up with established wind and solar contractors can make a solid middle-class living, particularly in a handful of states with strong labor practices like California, Minnesota and New York. Elsewhere, the influx of smaller operators and a lack of labor standards are spurring complaints about wage theft, starting pay as low as $10 an hour, scant training and safety lapses causing injuries and death, according to interviews with workers, union organizers, developers and state regulators.
“Every little construction company wants to get into wind, but they don’t know what they are doing and sometimes they don’t have the money,” says Saucedo, who has built wind farms for big and small firms for eight years. “I hear lots of complaints about small companies that don't pay, or pay late, and treat workers like dogs.”
A Prevailing (i.e., Union-Scale) Wage
Trade union leaders have taken the battle to Washington, pressing President Biden to keep his green-jobs promise. Their top priority in America’s clean energy transition is a set of labor standards – particularly a guarantee of a prevailing wage, says Yvette Pena-O’Sullivan, executive director of the 500,000-member Laborers’ International Union of North America (LiUNA).
A prevailing wage, which typically equals union rates and benefits, is about more than paychecks. It could transform the growing renewable industry by triggering the use of apprenticeship programs and attracting more skilled workers and reliable companies that invest in training, says Carol Zabin, an economist at UC Berkeley who researches low-wage labor markets and green energy.
Climate politics come into play too. If Biden can deliver a win for construction workers, he may get something in return – less resistance from trade and utilities unions to his anticipated push to slash carbon emissions. Good union jobs in hundreds of uneconomical coal power plants and mines would be first in line to go.
But a prevailing wage for clean energy, which could be part of the upcoming infrastructure package, is certain to face strong opposition in a divided Senate. Republicans and business groups have long denounced the country’s most prominent prevailing wage law, a Great Depression relic called Davis-Bacon. It applies only to federal public work projects such as highways but is touted as a model to use in the private renewable energy industry.
Critics say Davis-Bacon distorts the market by boosting labor costs, which in turn can reduce the number of workers a company hires in order to control expenses. Budget hawks point out that repealing Davis-Bacon would save the government about 1% of what it spends on construction, or $12 billion in the decade ending in 2028, according to the Congressional Budget Office.
Green energy workers make more money than Walmart clerks but less than union members doing similar tasks. A report commissioned by Environmental Entrepreneurs and other business groups found that in 2019 wind technicians made a median hourly wage of about $25 and solar installers somewhat less along with some health care and retirement benefits. The wages are above the national median average but not enough to support a small family in many states, according to the Living Wage Calculator created by a professor at the Massachusetts Institute of Technology.
“The vast majority of our jobs are high-paying, secure jobs,” says Erin Duncan, vice president of congressional affairs for the Solar Energy Industries Association. “Over the next decade, the solar industry will be creating hundreds of thousands of careers.”
The Labor Brakes on Breakneck Growth
The industry posted another year of record growth in 2020, thanks to a combination of federal tax credits, state requirements for supplying clean energy and rapidly declining costs. It has installed 4,900 wind and solar farms in the U.S., at times working closely with unions, particularly when developers need a large skilled workforce for difficult projects. The 2020 deal between Denmark’s Orsted and North America’s Building Trades Unions to erect offshore wind farms in the Atlantic Ocean was heralded by both sides as a breakthrough for labor-industry collaboration on clean energy.
But labor issues threatened the industry’s ability to grow at the breakneck pace needed to meet Biden’s ambitious goal of cleaning the power grid of carbon emissions by 2035. The industry suffers from a shortage of managers, engineers, technicians and installers, with 83% of solar firms reporting difficulty in hiring the qualified employees they need, according to a 2019 jobs census from the Solar Foundation. The industry is trying to fill the gap by tapping groups like Hiring Our Heroes for military veterans who want training for solar jobs. “But we certainly don’t have the numbers of people that we need to facilitate the increasing growth of the industry,” Duncan says.
The industry’s poor labor practices are part of the problem in luring blue-collar talent, says UC Berkeley’s Zabin. To keep costs in check, developers often rely on a peripatetic workforce of manual laborers, electricians, ironworkers and heavy-machine operators. They travel almost year-round from state to state and job to job, sleeping in cheap hotels and campgrounds. Many of them report to temporary staffing agencies and brokers, which — across various industries — often tend to depress wages and blur the lines of accountability when labor disputes over pay and unsafe conditions erupt, according to research by the National Employment Law Project.
Job training would help these roving green workers build careers that can support a family. But training is hard to find other than at the biggest firms like GE and Vestas, says a worker who asked to remain anonymous. He dropped out of Southern Texas University for a wind job and was certified as a gearbox technician. But after five years in the business he’s stuck making about $25 an hour. “I love working in wind but I need to get to the right company that will give me the opportunity to learn,” he says.
One major developer can spot a reckless contractor with poorly trained crews by the “crazy low bids” it submits. “There are some contractors with crews that put on Wild West shows,” says an executive at the renewables company who asked to remain anonymous. “Things happen on land where they’re not supposed to, equipment being in places where it’s not supposed to be, and there are safety issues too.”
At least eight workers have died in the dangerous occupation of wind farm construction since 2008, according interviews with employees, filings with the Occupational Health and Safety Administration and media reports. Workers are suspended from towers hundreds of feet in the air as huge cranes swing massive steel parts into place in sometimes windy and mountainous conditions. The deaths include a man in South Dakota who was run over by a semi-trailer truck and a worker in California who fell to the ground through an open hatch on a tower.
Last year, a 24-year-old man suffered what authorities called a preventable death on a wind farm in Washington. He jumped into a deep and unshored-up trench to rescue a trapped co-worker when it collapsed and buried him alive. A group of workers spent hours trying to dig him out of an enormous dirt pile.
Renewable Energy Systems Americas, a major player in clean energy, was among the companies fined a total of more than $500,000 for many safety violations. A state agency found that digging such a deep trench after days of rain without bracing the walls was a “recipe for disaster.”
Most large firms like Mortenson and White Construction are known as safe operators that follow rules. But some companies disregard time-consuming safety procedures in order to meet milestones, such as quickly erecting 10 towers, to get paid.
“In order to get these paychecks, they tell us to do really risky things,” says Grant Schermitzler, who has worked on many wind crews over the years. “In 42-mile-an-hour winds, above the legal limit, they have us lift tower parts with a crane. They don’t understand how dangerous it is. It happens all the time.”
Big Labor Goes to Bat
Unions often intervene to address safety concerns with employers. But they have only a very small presence in wind and solar construction because of the difficulties in organizing workers employed by temp agencies -- workers who don’t stay in one place long enough for a union campaign, says Steve Schwartz, LiUNA’s director of organizing.
So organizers resort to other tactics, such as going directly to developers and urging them to sign project labor agreements on wages, benefits and training in exchange for a skilled workforce. The agreements are widely used in California’s buildout of renewables. When developers in other states reject them, unions make their case to regulators -- with mixed results.
In Minnesota, where unions have long held sway over jobs, a perfect storm was brewing a few years ago. While coal plants in the state were set to be retired, thus eliminating union jobs, wind and solar projects were springing up and being built by traveling workers with out-of-state license plates.
Union leaders complained to the state Public Utilities Commission. Developers had sold these projects to regulators as job creators for Minnesotans, but they weren’t getting the work, says Kevin Pranis, LiUNA’s marketing manager in the state.
The PUC responded by telling developers to begin disclosing the local composition of their workforce, sending a clear signal to hire more Minnesotans without actually requiring it. Renewable goliath NextEra Energy and RES Americas protested.
“They complained that local hiring is too hard and costs more and will mess everything up,” Commissioner Joe Sullivan says. “But developers came to realize that the commission wants to promote economic development, and they have complied and continue to build projects.”
The number of Minnesotans hired, often from unions, has shot up in a state with 477 wind and solar farms. Locals made up less than a fifth of workers on a project in 2018, just after the reporting requirement began. Two years later, on another wind farm, the number had increased to three-quarters.
In Colorado, unions have watched from the sidelines as traveling workers built most of 125 renewable plants. The Keep Jobs in Colorado Act of 2013 seemed like a win for organized labor in a state where it has a small footprint. It required the utilities commission to consider labor practices such as wages, training and local hiring in approving energy construction and acquisitions.
But commission delays implementing the statute and a loophole for companies to avoid reporting their labor practices undermined it. “There’s a race to the bottom on labor costs, and that hurts the economy in Colorado and nationwide,” says former Commissioner Frances Koncilja, who found the PUC to be unsupportive of unions.
State Democrats recently put teeth into the law to force developers to report labor practices. It gives unions leverage as Xcel Energy, Colorado’s largest utility, prepares to double renewable energy generation by 2030. But unions aren’t celebrating. That’s because the commission is still free to take the low-cost road, says Gary Arnold, business manager of a Denver Pipefitters local.
“We always seek ways to use union labor on projects where it does not put us at a competitive disadvantage and allows us to deliver the lowest cost energy to our customers,” Xcel spokeswoman Julie Borgen says.
Who Foots the Bigger-Paycheck Bill?
Faced with a hodgepodge of state practices, LiUNA and other big unions are now lobbying for a federal prevailing wage law to set a floor on pay across the country. They want the pay requirement to apply to projects that receive federal tax credits and other incentives, arguing that if developers get a government handout, then workers should benefit too.
Will energy consumers foot the bill for green workers’ bigger paychecks? For decades, academic researchers have examined whether prevailing wage laws, which exist in many states, boost labor costs. Their answer is sometimes.
In most of the many peer-reviewed studies since 2000, costs didn’t go up because higher wages attracted more skilled and productive workers and prompted developers to shave other expenses, according to researchers at the Midwest Economic Policy Institute and Colorado State University.
After losing a bid for a prevailing wage mandate in December, unions are banking on support from the labor-friendly Biden administration and Democratic heavyweights in Congress. Rep. Richard Neal, chairman of the House Ways & Means Committee, is an outspoken proponent. And Sen. Joe Manchin, a key swing vote, defended a prevailing wage law in his home state of West Virginia before it was repealed.
The solar trade group, which has joined the discussions in Washington, has a more nuanced position. It might support a pay standard if it’s optional and tied to an additional subsidy for developers, says SEIA’s Duncan.
“It’s a stark choice,” says Zabin at UC Berkeley. “Either we have low-wage, dead-end jobs or we use the tools of government to make companies better employers and create real careers.”
Conclusion of a Cautionary Tale
C2 Logistics, which was building the Kansas wind farm, shut down in December after failing to pay its crew. Owner Jim Clark didn’t have experience in the construction or energy industries before moving into the wind business, according to his LinkedIn page. He ran a trucking company.
Wood, a global engineering and consulting firm that hired C2 to build Flat Ridge III, took over the messy project and hired the workers after Clark left. The crew’s morale and productivity tanked after the paychecks stopped coming, and the wind farm has since missed its deadline for completion, former employees say.
Flat Ridge III is also ensnarled in lawsuits. The workers are suing both Wood and C2 Logistics for backpay and damages. U.K.-based Wood says it won’t pay the employees money that Clark allegedly owes them because that’s his responsibility. Wood is also suing Clark for defaulting on his agreements to the workers and the project. And C2 is suing Wood and a subsidiary, claiming they withheld funds from the small wind company, which is why it didn't pay its workers.
Wind farm owner American Electric Power — which earned $2.2 billion in net profits in 2020 — could easily pay the crew and make this controversy go away. But the utility doesn’t plan to make the workers whole. “We expect our suppliers to fulfill their commitments,” a spokesman says.
Meanwhile, Clark has been plotting his return. He aims to start another wind business and tried to recruit some of his former C2 workers, says crewman Schermitzler, who served on the Kansas project. Over a meal in Texas, he says, Clark asked him not to join the lawsuit and instead come aboard his new venture. Clark denies he is trying to launch a new business.
Schermitzler, who is owed about $6,400, has learned his lesson. He joined the lawsuit.
“I want to get the word out so what happened to me doesn’t happen to anyone else,” he says.