As Congress continues to debate the yet-to-be-finalized budget reconciliation legislation, one provision tucked in the bill at the behest of union lobbyists is a union tax credit that would provide companies that use unionized employees an unfair advantage at taxpayers’ expense in the erupting electric vehicle market. This short-term gain for unions will undermine the goal of a robust electric vehicle market that pays long-term benefits to workers, consumers, and climate change advocates.
Taxpayers can currently claim a tax credit of up to $7,500 if they purchase a qualifying electric vehicle. The reconciliation legislation includes a provision that would provide consumers with an extra $4,500 if the electric vehicle purchased is assembled by a unionized company — a blatant attempt to leverage taxpayer dollars to boost union membership while penalizing workers who have chosen to work for a nonunionized automaker or not join a union. This is contrary to 70 years of established labor law and the tenet of employee free choice, which protects a worker’s right to both join a union and refrain from doing so.
But perhaps even more stunning is the fact that the provision also flies in the face of President Joe Biden’s climate goals. The proposal would stunt a burgeoning market that has the potential to make electric vehicles more accessible to everyone — a fundamental objective in the administration’s plan to reduce emissions and secure a greener future.
Just as it is wrong for the government to arbitrarily punish the hundreds of thousands of workers who choose not to work for a unionized electric vehicle manufacturer, it is wrong to use taxpayer dollars to give unionized electric vehicle manufacturers a leg up in this nascent industry. The market currently includes many nonunion, new market entrants, as well as established nonunion companies, both of which are building cars and providing good jobs in the United States.
By handing a select few unionized automotive manufacturers an advantage early in the race for market share of electric vehicles, the government may prevent the industry, and particularly new market entrants, from reaching full potential. This type of government intervention at any point in a market’s lifespan, much less at such an early stage, sends a bad signal for investment and stunts growth. While nonunionized automakers will be negatively affected, consumers and workers are the real losers in this scenario.
Climate change advocates should also be disappointed by this proposal. Federal budgets reflect the priorities of the government because they show what the government is willing to support with taxpayer dollars. The inclusion of these tax credits for union-made electric vehicles signals to the people that the government cares more about acquiescing to union demands than it does about creating a fair and equitable electric vehicle market that makes strides in fighting climate change and pursuing a greener future.
If the White House and Congress really wanted more people to buy electric vehicles to address climate change and grow the green infrastructure workforce, they would provide equal incentives for electric vehicles built in the U.S. and support workers regardless of union affiliation. If the U.S. is truly to lead in the fight against climate change and the transition to electric vehicles, members of Congress and the Biden administration should reject this proposal.
Kristen Swearingen is the chairwoman of the Coalition for a Democratic Workplace.
