Employer practices

Employers and Policymakers Can Help Build a Greener Workforce

Joe Peck March 19, 2024

The Inflation Reduction Act, enacted in August 2022, is set to provide around $1 trillion worth of funding for green industries across the United States. Estimates predict that these federal investments will create nine million jobs; however, this presupposes that workers can be retrained and reskilled to meet the demands of green occupations.

Businesses, policymakers, unions, and workforce development practitioners each have roles to play in ensuring that new green jobs are created with this funding. As the US labor market begins to cool, it is important that the new work opportunities created by the Inflation Reduction Act are protected and expanded. Market forces alone will not be sufficient to ensure federal investments lead to good outcomes for US workers.


Tax credits included in the Inflations Reduction Act reduce the cost of investment, enabling US businesses to more easily expand their workforces. First, by engaging with existing workforce training programs, employers can reduce the costs associated with hiring new employees. These programs not only help companies to train new workers but also find existing workers with a particular set of skills.

Second, in addition to this kind of cross-sector workforce initiative, businesses can provide their workforces with new skills by participating in apprenticeship programs. These programs allow trainees to work while they learn, offsetting many of the costs of educational initiatives for employees, while lowering other recruitment and training expenses for businesses. They also allow firms to ensure their workers have a common set of skills and strong wage growth. Evidence suggests that shorter, pre-apprenticeship programs serve to further grow the talent pool for businesses.

The incentives flowing from the Inflation Reduction Act include additional tax credits for employers providing registered apprenticeship programs, giving companies financial incentive in the short term and an avenue to build their future workforces in the long term. Apprenticeship program resources exist for businesses interested in jumpstarting these kinds of training opportunities and growing diverse talent from within their organizations.

Third, companies could subsidize other formal educational opportunities for their employees. Training assistance can raise employee engagement at work and encourage new employees to join these firms. Currently, many green occupations require formal education. Educational assistance programs of this kind therefore offer companies the chance to reskill their workers and expand their hiring pools. Given that many of these green jobs lie in growing occupations, such as environmental engineers and wind turbine service technicians, businesses engaged in these industries can upskill workers without risking an insufficient payoff to training costs.


Workforce training programs can be expensive for employers to operate independently. That’s why policymakers have a role to play in establishing better avenues for workers to be trained to enter green industries. Beyond its incentives for registered apprenticeships, the Inflation Reduction Act does not provide money for comprehensive workforce training. The limited funding opportunities are restricted to the maintenance and operation of electric vehicles, reduction of polluting gases, and energy efficiency training for contractors.

However, other federal programs offer a precedent into how policymakers might comprehensively improve workforce development across targeted industries. The bipartisan Infrastruct­ure Investment and Jobs Act, enacted in 2022, gives states an avenue to fund workforce development for transportation projects in addition to a whole raft of workforce programs administered by other federal government departments.

So, too, can these programs provide support to underrepresented workers. The US Department of Labor’s Employment and Training Administration administers a number of worker programs through the Workforce Innovation and Opportunity Act of 1998. Some of these are aimed at increasing employment of marginalized populations. For example, the Women in Apprenticeship and Nontraditional Occupations grant program helps community organizations move women into apprenticeships.

Nonfederal efforts also show how marginalized workers can be better supported. The Wisconsin Regional Training Partnership, for example, facilitates a construction apprenticeship program aimed at women and Black workers. Federal policymakers could apply lessons from these programs to a green jobs initiative.

Local policymakers in particular have an important role in improving workforce training in their areas. Local workforce systems help coordinate employers, employees, government agencies, and nongovernmental organizations to match workers to training and job opportunities. Local officials can help facilitate this process by understanding their local workforce systems, championing workforce development initiatives, and coordinating with stakeholders such as federal and state economic development agencies to bring funding, jobs, and training opportunities to their regions.

Policymakers can establish quasi-governmental organizations to this end. The Philadelphia Energy Authority—established by the city council in 2010 but retaining operational independence—helps individuals upgrade their homes to meet energy efficiency standards. While doing this work, they offer training programs to help workers gain the skills needed to move into new industries. Other policymakers could follow the example of these dynamic cross-sector initiatives while ensuring that career pathways are available for those who complete them. 

To better meet the retraining needs of workers than current policy solutions allow, policymakers could further establish local industry partnerships. This kind of workforce intermediary benefits from consistent government funding and a relatively high share of representation from labor groups. Programs that take a sectoral approach raise the wages of low-paid and disadvantaged workers and increase the chances of participants earning a credential.

Crucially, sector-wide programs—such as one potentially covering the green energy sector—could be particularly effective at improving employment opportunities. Project QUEST in San Antonio, for example, was founded in 1992 to help workers train for growing employment opportunities. Even though the program ended a decade ago, those who participated continue to earn significantly more than those who did not. A green sector program that mirrors the success of Project Quest could be a similarly effective and efficient program.

Workforce practitioners

Organizations separate from—but often in tandem with—employers can train workers for new opportunities. New nonprofit programs modeled on the Annie E. Casey Foundation’s Jobs Initiative could help workforce development. So, too, could third-party apprenticeship training providers, who help create apprenticeship programs where businesses alone might not. Unions similarly work in tandem with employers to offer training and workforce advancement and apprenticeships to prepare workers for new industries, just as colleges including Arizona State University are tailoring their curricula to train students according to industry demand.

Nonprofit organizations can have a convening role and connect workers to better jobs. Across cities including Milwaukee and Cleveland, for example, the Water Equity Task Force aims to improve the management of water resources and connect workers to jobs. While not directly drawing from funding provided by the Inflation Reduction Act, this practitioner provides a blueprint for how other groups could direct federal funding into job creation. Often, smaller contractors might struggle to know about or seek grants, so institutional support can help bring funding to new areas and allow workers to be hired. These nonprofit organizations can help coordinate community voices, employers, and government support to move workers into good jobs for a specific goal.

Workforce intermediaries of all stripes should consider including strong parent-friendly components in their training models to maximize their impact on economic mobility while supporting families. By law, the US Department of Labor’s American Job Centers (which offer a range of employment services such as work readiness training) must have partnerships with agencies in charge of administering the provision of Temporary Assistance for Needy Families to eligible low-income workers and their families. These kinds of family-centered programs offering tuition assistance, care services, and workforce training are particularly important avenues to economic mobility for many parents. It is important that as the green economy grows, its economic benefits are made accessible to all.

Building a more equitable green workforce

Employers, policymakers, and workforce development practitioners working in tandem can further business goals, climate goals, and economic equity goals simultaneously if they successfully leverage Inflation Reduction Act funds. Workforce systems might orient reemployment and training programs to populations that have historically been disadvantaged in employment opportunities, such as Black and Hispanic Americans, and work with organizations concerned with helping those underrepresented in green industries, principally female workers. New Jersey’s Career Pathway Partnership for Employment Accessibility, for example, works with employers and practitioners to facilitate career progression for those with disabilities.

Research suggests that by leading jobseekers to well-paying, high-benefit jobs, states can increase economic mobility. California’s High Road Training Partnerships gives precedence to employers that center equity, and Pennsylvania prioritizes high-wage occupations when funding training opportunities. The central problem for these programs’ efforts to boost economic equity is that high-wage jobs are often out of reach for the most disadvantaged workers because they may not meet basic skill requirements.

A career pathway approach to workforce development has struggled to bridge this gap. At the same time, existing development programs in the United States have not remedied the occupational segregation of Black workers into lower-wage industries, which reinforces racial economic disparities. Programs of this kind are not flawless, but there is room for improvement. It is important that these issues are addressed so that businesses can maximize the opportunities to build a more equitable workforce. In response, workforce agencies could use job quality data that are disaggregated by race, for example, to engineer more equitable work outcomes for employees by identifying precisely where racial employment differences exist.

It is important that organizations meaningfully communicate with affected communities when designing employment programs, as this often serves to advance equity. Workforce nonprofits could further engage in advocacy with policymakers and businesses, drawing attention to discrimination in hiring and burdensome work requirements for those in receipt of public assistance. Measures such as these could help ensure that the energy transition is a just one.

The ongoing energy transition and the funds available today have created new opportunities to further decarbonize the US economy while providing economic mobility for workers. Businesses and climate advocates could simultaneously achieve their goals if policymakers and practitioners work together to effectively train workers for the jobs of tomorrow. Not only could they train a better workforce, but they could also create a more prosperous and greener one.

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