Gov. Walz vs. the data — Do ‘clean car’ rules harm auto industry employment?

Yesterday, Gov. Tim Walz visited Phillips and Temro Industries — manufacturers of electric vehicle chargers — to sell his ‘clean car’ rules, which take effect in 2024 for the 2025 model year. As KEYC reports:

Fourteen other states already have adopted similar standards, which require manufacturers and dealers to supply more electric vehicles. The states’ rules are all based on California’s tough standards, and that’s been a major sore point for Minnesota auto dealers and other critics.

“In the 14 other states, the sky did not fall,” Walz told reporters after his tour. “The car industry did not collapse. Jobs were not lost. In fact, just the opposite happened in all 14 other states.”

A look at the data shows that this is not true.

The Bureau of Labor Statistics‘ (BLS) Quarterly Census of Employment and Wages breaks down employment for each state by sector. It allows us to look at employment for each state in ‘Motor vehicles manufacturing (NAICS 3361),’ ‘Motor vehicle and parts wholesalers (NAICS 4231)’ (Wholesale trade), and ‘Motor vehicle and parts dealers (NAICS 441)’ (Retail trade).

In fact, few of the states which have adopted ‘clean car’ rules had much in the way of an auto manufacturing industry in the first place: indeed, in 12 of 13 states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington) the BLS often doesn’t report employment numbers for that sector (Colorado only adopted the rules in 2018 so is excluded from this analysis along with the District of Columbia which has also adopted them). Indeed, Minnesota is in this situation; the BLS hasn’t reported a figure for auto manufacturing employment in Minnesota since 2010.

It is a different story for the other two sectors, wholesale and retail trade. For these sectors, the BLS reports employment numbers going back to 2001 for each state.

The columns under ‘1’ in Figure 1 show the percentage change in employment in both the wholesale and retail auto trade sectors for each state since they adopted their ‘clean car’ rules (the year before adoption being the base). We see that, in fact, jobs were lost in the wholesale sector in 11 out of 13 states and in the retail sector in 12 out of 13 states. When Walz says that “Jobs were not lost. In fact, just the opposite happened in all 14 other states,” he isn’t telling the truth.

Figure 1: Impact of ‘clean car’ rules on auto wholesale and retail employment

Source: Bureau of Labor Statistics

Perhaps he means that jobs were not lost relative to the United States generally? This would be a very charitable interpretation to put it mildly, but even there the data would show him to be spreading untruths.

The columns under ‘2’ in Figure 1 show the percentage change in employment in both the wholesale and retail auto trade sectors for the United States as a whole over each of these periods. So, for example, while Oregon has seen employment fall by 14.8 percent in its wholesale sector and 9.8 percent in its retail sector since it adopted ‘clean car’ rules in 2006, for the United States generally the falls have been 1.5 percent and 1.4 percent respectively over that period.

The columns under ‘3’ in Figure 1 compare the records of the states in each sector since they adopted ‘clean car’ rules with that of the United States over the same period. We see that in almost all cases the states imposing these rules saw their employment in these sectors either grow more slowly or fall by more than the United States at large. In some cases the differences are striking.

As of 2020, 41,442 Minnesotans were employed in the wholesale and retail auto trade sectors. The BLS data show that the imposition of ‘clean car’ rules will, in all likelihood, reduce this number, possibly quite significantly. Gov. Walz might see these lost jobs as a price worth paying for whatever infinitesimal reduction in global temperatures it may produce. But as he sacrifices these people’s livelihoods, he ought, at the very least, to be honest with them about it.