Move to All-electric Buildings will Trigger Significant Demand for Skilled Workers

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Move to all-electric buildings will trigger significant demand for skilled workers in construction, manufacturing, and energy; slowly reduce gas system employment

First study to estimate employment needs, impacts of building electrification in California tracks shifts across sectors; finds planning and engagement can ensure high-road jobs, minimize losses

Los Angeles—California’s transition to all-electric homes and buildings could support more than 100,000 construction jobs and 4,900 manufacturing jobs annually for 25 years, according to the first comprehensive study on the employment impacts of building decarbonization. Upon 100 percent electrification – employment in the electricity industry will have increased by up to 12,400 workers while decreasing gas extraction and utility employment by a maximum of 14,400 workers.

The report, California’s Building Decarbonization Workforce Needs and Recommendations, illustrates how building electrification – the process of improving the efficiency of buildings while replacing fossil fuels with clean electricity – will cause employment shifts across sectors. Electrification policies are being pursued by dozens of California cities and state agencies to ensure the state can fully take advantage of its abundant and cheap renewable electricity while reducing dependence on imported gas and the aging and increasingly expensive system of pipelines that carry gas to homes and businesses.

“In total, building electrification in California could support between 64,200 – 104,100 jobs annually, after accounting for losses in the fossil fuel industry,” said Betony Jones, principal at Inclusive Economics and lead author of the report. “To retain skilled workers and support those who may be displaced, we must plan for this transition. Ultimately, the greatest threat to the workforce would be industry destabilization due to a lack of planning.”

Researchers at the UCLA Luskin Center for Innovation and Inclusive Economics suggest that effective workforce engagement and planning between local and state policymakers, unions, training programs, and energy agencies can ensure this transition supports and engages California’s skilled and trained workforce.

In July, Berkeley, California became the first city in the nation to pass a local policy to phase gas out of new low-rise buildings and homes. Thirteen other cities and counties have since passed local measures to encourage all-electric new construction.

“For the construction of new, all-electric buildings, we’re projecting a small dip in demand for construction workers, particularly for those who install new gas hookups, because we expect that gas-free homes will be less costly to build.” said Jason Karpman, staff researcher at the UCLA Luskin Center for Innovation and co-author of the report. “This dip in the new construction sector, however, will likely be offset by a much larger increase in demand for workers to retrofit existing buildings.”

Electrification is widely regarded as an effective way to cut climate pollution from homes and buildings, which are responsible for more than a quarter of the California’s greenhouse gas emissions.

“Modern electric induction stoves, water heaters, and HVAC systems powered by clean electricity are more safe, efficient, reliable, and higher-performing than gas,” said Rachel Golden, deputy director of clean buildings at the Sierra Club, which commissioned the research. “But residents and businesses will not see these benefits unless California’s skilled construction workforce is prepared for and engaged in this work over the next 25 years. This report provides the framework to ensure that happens.”

Study focal points

The study used IMPLAN, the industry standard economic modeling tool, to estimate the employment impacts of electrifying and retrofitting California’s 14 million homes and over 8 billion square feet of commercial buildings.

Researchers found employment impacts in three key sectors: construction, manufacturing, and energy production and distribution.

Topline findings include:

  • Electrification will support more than 100,000 annual construction jobs related to efficiency improvements, building modifications, equipment installations, and renewable energy construction – and 12,400 more in electricity generation and distribution to ensure that the state’s electricity system can support new demand loads by 2045.
  • Additionally, if in-state manufacturers are able to provide some of the new equipment, California could add close to 5,000 manufacturing jobs annually.
  • By the time the state has reached full electrification of its buildings, employment related to gas extraction and distribution could shrink by 14,400 jobs, but these impacts can be minimized through workforce planning.
    • These include 5,400 – 6,800 fewer jobs in the gas distribution system and up to 6,200 jobs in gas distribution system and up to 6,200 jobs in gas extraction. 
    • The state could avoid losses in the extraction industry altogether by reducing gas imports. California imports 90 percent of the gas it uses and full building electrification would result in a 30 percent reduction in statewide gas use.
  • Up to 7,900 of the projected job losses in extraction and distribution will be white collar workers who have skills that are transferable to other industries.
  • Because around 55 percent of the existing gas workforce is above the age of 45 and will reach or pass retirement within the next 25 years – transition planning can ensure that workforce contraction aligns with retirement.

“Transitioning the building sector to clean electricity will certainly be a gradual transition, so we don’t expect oil and gas jobs in California to disappear overnight,” noted Karpman. “This gives the state time to engage in a thoughtful planning process that minimizes shocks to California’s workforce.”

What about job quality?

The report also looks at the quality of jobs that will be created through increasing building electrification in California through 2045.

“Three out of every five of the jobs would be in ‘high-road’ sectors – where firms compete on the basis of skill, experience and qualifications, and worker pay tends to be higher,” according to Jones. “The other two building electrification jobs would be in traditionally ‘low-road’ sectors, with low barriers to entry and high turnover of workers. It’s important that California expand ‘high-road’ opportunities by ensuring that residential customers have the same access to skilled and trained workers as large commercial customers do.”

The report authors point out that climate and energy agencies, utilities, and local governments play a large role in influencing job quality and engaging a highly skilled workforce. They set the bar for the level of skill and training required of workers, especially in emerging areas like building electrification.

The report includes recommendations for key agencies and policy makers including:

  • Work with the impacted unions to grow good jobs and minimize job loss. This includes ensuring labor conditions to attract a skilled workforce, collaborative, long-term planning for the transition from gas.
  • Prioritize policy interventions that support high-road employment and establish strong workforce standards or risk inadvertently creating and supporting a low-road employment environment.
  • Invest in targeted worker training. This includes offering specialized training in building electrification to licensed workers in trades that will be most in demand (electricians, sheet metal and HVAC workers, and plumbers and pipefitters) and ensuring access to high road career opportunities in construction and manufacturing for disadvantaged workers.

“The whole world is watching as California acts to meet urgent climate and clean air targets,” added Golden. “By pursuing a ‘high-road’ path to building electrification, California can further demonstrate its commitment to broadly shared prosperity in a zero-emission future.”

About UCLA Luskin Center for Innovation

The Luskin Center for Innovation is a policy-oriented research center uniting UCLA scholars with civic leaders to solve environmental challenges confronting our community, nation, and world.

About Inclusive Economics

Inclusive Economics conducts research and analysis to answer questions about the employment, economic, equity impacts of energy transitions and advises on policies to improve worker outcomes from climate change policies and programs.

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