U.S. auto plants producing battery electric vehicles have required a larger workforce than traditional internal combustion engine plants—a finding that runs counter to early predictions about how EVs would impact the industry.

Researchers at the University of Michigan have shown that plants in the ramp-up stages of transitioning to full-scale EV production saw assembly jobs increase as much as 10 times. At one plant studied, now with over a decade of EV production, the number of workers needed to make each vehicle has remained three times higher.

“There is a shortage of information out there about how the transition is shaping up,” said Anna Stefanopoulou, the William Clay Ford Professor of Technology and senior author of the study published in Nature Communications. “What we’re seeing, with the data that’s available, is that the loss of employment predicted for EVs is not happening.”

Previous estimates of what EV manufacturing would mean for autoworkers depicted a 30% to 40% reduction—a loss of 200,000 jobs or more. Much of that stems from the basic difference between electric and gas-powered cars.

EVs require roughly 100 fewer parts than their ICE counterparts, and their powertrain designs are far simpler. Transmissions, exhaust and cooling systems are not part of the EV equation, so the expectation has been that assembly jobs would be lost. But the findings show the opposite.

U-M’s research team offered several factors likely contributing to higher numbers of assembly workers at EV plants, including:

• Investment in the development of new manufacturing technologies, which often requires more labor to improve.
• Higher vehicle complexity. Companies beginning to manufacture EVs usually start out making premium vehicles with the most advanced features and technologies.
• Some manufacturers have consolidated workers in a single, central location to lower costs from outsourcing, a practice known as vertical integration.

The 30% job loss number is often attributed to James Hackett, Ford’s former president and CEO, from a forecast in 2017.

“It’s a number that has been repeated by a lot of big names in the auto industry,” said Omar Ahmed, a U-M graduate student research assistant and a co-first author of the study. “But if you look closely, no one’s really done the work to look at real plants that have transitioned from building ICE vehicles to building EVs.”

U-M researchers identified three plants that have transitioned from building all ICEs at one time, to manufacturing all EVs. Those are Tesla’s factory in Fremont, California (previously owned by General Motors and Toyota); Rivian’s factory in Normal, Illinois (previously operated by Mitsubishi) and the General Motors plant in Orion Township, Michigan (currently not operating).

The team compiled two decades of data on the number of assembly workers at the three plants using public census data in the U.S., as well as production data from the Automotive News Research & Data Center.

“Our work shows clearly that the number of assembly workers in the plants has increased in many cases,” said Andrew Weng, a U-M research fellow in mechanical engineering and co-first author of the study. “However, the jury is still out in terms of parts manufacturing jobs, which will largely depend on where battery cell manufacturing takes place.”

Tesla’s Fremont plant offers the longest stretch of EV production to study. Gabriel Ehrlich, an associate research scientist and director of U-M’s Research Seminar in Quantitative Economics, said there are lessons to be gleaned from that auto plant’s data.

“The plant has been operating for ten years now, and they’ve obviously been able to improve labor efficiency,” he said. “But the pace of improvement indicates that it can take up to 15 years for a plant to reach parity with its ICE predecessor.

“It’s going to be a slow process, one that gives communities, companies and workers time to adjust.”

The burden of supporting asylum-seekers with food and housing often falls to cities, creating severe budget crunches. But Denver is piloting a new approach designed to integrate immigrants into the workforce faster.

The Denver Asylum Seekers Program offers six months of rent-free housing along with legal assistance, food aid and workforce training. The program started on April 10, 2024, with spots for up to 1,000 participants.

Only asylum-seekers who were already living in Denver when the program launched are eligible—a provision designed to control costs and discourage hopeful participants from coming to Denver. This is an important detail in a city that—like others—has groaned under the financial strain of an influx of migrants since December 2022.

Upfront financial costs of the new program include expenditures on housing, food and training, which is predicted to cost around US$1,700 per migrant.

So is this expenditure worth it? One way to assess that is to look at an economist’s tool set called a cost-benefit analysis. I teach this tool set as a professor of economics at Colorado State University. Such an analysis considers the broad benefits and costs of a program like Denver’s compared with maintaining the status quo or “doing nothing.”

A system under strain

Migrant flows in Denver reached a peak in early 2024, when 5,213 people arrived in just one day, leading the city to cut hours at recreation centers and the Division of Motor Vehicles to help free up funds to provide food and housing.

Many of the migrants arrived from the Mexico border, put on buses paid for by the Texas governor because of Denver’s status as a sanctuary city. Denver has seen 42,817 migrants arrive since the end of 2022, more than any other U.S. city its size, but the numbers have fallen significantly in recent weeks.

The new Denver Asylum Seekers Program was designed to control costs by serving a limited number of asylum-seekers while assisting others with “securing onward travel,” as the city describes it, after staying just 72 hours in temporary housing. Previously, the city had offered 14 days of shelter for adults and 42 days for families.

The program allowed Denver to trim $15 million per quarter from its previously projected budget, but the city will still spend $90 million on migrant services in 2024, including the costs of the Denver Asylum Seekers Program.

Costs of ‘doing nothing’

Denver currently has more than 10,000 people experiencing homelessness, so one motivation for the new program is to keep these migrants off the streets.

Denver’s homeless population grew 32% in 2023 to about 10,000 people, even when migrants are not included in the totals. More people on the streets leads to higher care costs in emergency rooms and for policing.

If the program means that some of the costs associated with “doing nothing” are avoided, then those avoided costs could go to other income support and preventive programs. This idea was illustrated in 2023 when Denver faced extra expenditures on migrant services and around $2 million was paid from Department of Human Services accounts, shortchanging other programs.

How Denver’s program addresses issues

The Denver program is a direct response to work authorization processing times for newly arrived asylum-seekers, which—in recent months—have taken as long as a year. Under federal law, asylum-seekers must wait 150 days before even applying to legally work in this country.

The Denver program is designed to put that waiting period to good use via workforce training, which increases the odds that migrants will quickly secure employment as soon as they’re allowed to work.

Workforce training will benefit not only the migrants themselves, but also their dependent family members and local economies. Recently published statistics show that, so getting migrant parents to work will minimize costs to programs that support children like public welfare services.

Other benefits of migrant services

Research suggests that supporting migrants will also promote local economic development.

An economics professor at Montana State University found that a 100-dollar increase in monthly assistance received by refugees through the federal Temporary Assistance for Needy Families program was associated with 5% to 8% higher wages for these migrants once they started working. The research concluded that refugee assistance was cost-effective to bridge refugees into well-matched jobs. Those jobs, in turn, contribute to the long-run economy that benefits everyone.

Refugee integration has also been shown to be valuable for Colorado specifically. Professors from the Colorado School of Public Health and the University of Colorado Anschutz documented links between economic sufficiency and community integration of 467 Colorado refugees over three years. They measured integration based on understanding American culture, knowing legal rights, and other aspects of social and economic stability.

Investment returns of migrant employment

A common counterargument to investments in new migrants is the possibility of labor-market displacement of native-born workers. However, in a paper circulated by the U.S. Department of State, refugee admissions were shown to have not affected wages or employment for natives over a 30-year study period.

In 2018, the Colorado Department of Human Services generated $611 million in new economic activity in the state. The rate of return was $1.23 in new state and local tax revenue for each $1 invested in refugee services.

If this first-of-its-kind program achieves this same return on investment, it can be expanded or replicated in other cities to decrease migrant expenditure and promote local economic sustainability.

This article is republished from The Conversation under a Creative Commons license. Read the original article.