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Economist: Rivian Production Will Spur 'Ripple Effect,’ Higher Wages In B-N

Rivian Automotive sign
Eric Stock
/
WGLT
This week, Rivian's first electric pickup truck rolled off the assembly line at its plant in Normal.

A research economist says the jobs electric-vehicle maker Rivian has created at its Normal plant will likely create an economic “ripple effect” throughout the community, including higher wages.

Timothy Bartik is an economist at the nonprofit W.E. Upjohn Institute for Employment Research in Michigan. Bartik said the 2,500 jobs at Rivian probably will spur an equal number of additional jobs for parts suppliers and other economic spinoffs. He said that will bring more people back into the workforce and help others find better-paying jobs.

Rivian says it could eventually double its workforce to 5,000 at the Normal plant.

Timothy Bartick
Mark Bugnaski
Timothy Bartik

“I think it would be realistic to assume that if you create 5,000 jobs in Bloomington-Normal, 1,000 of those at least would go to people who are otherwise would not be employed,” Bartik said. “That obviously is a significant change in their earnings and their standard of living.”

Rivian has started to produce electric pickup trucks, making it the first EV company to bring a battery-powered truck to the market.

Bartik said even though Bloomington-Normal's unemployment is consistently among the lowest in the state — it was 4.9% in July — and that workforce heavily consists of a white-collar workforce in insurance, education and health care, there are still plenty of available workers who could benefit from Rivian’s growth.

“I don’t think the employment rate is necessarily as high as it could be,” said Bartik, adding Rivian's higher-paying jobs will likely attract workers from beyond Bloomington-Normal.

“There are a lot of people who are very attracted by manufacturing jobs that typically pay a little bit better than more of the service sector jobs and yet don’t require an advanced degree,” he said.

Bartik said a more accurate measure of an area’s available workforce is its employment-to-population ratio that dropped over the last decade from about 65% to 60%, based on U.S. Census data. He said that data point may capture more people who may not consider themselves actively looking for work, but who could be enticed by a job at an employer like Rivian, such as someone who retired early and wants to start a new career, or older workers who were “squeezed out of the labor market.”

Bartik said it remains to see how whether Rivian and the many other electric-vehicle startups will survive. He said some won’t, but he thinks many green energy companies that can help combat the effects of climate change will have the chance to flourish.

Bartik added that Bloomington-Normal’s investment in the plant and the local labor force could pay dividends long-term regardless of Rivian’s success, citing Illinois State University’s plans for a new engineering college as one example.

“You need to hedge your bets, you need to have a broad economic development strategy. You don’t put all your eggs in one basket,” Bartik said. “Those investments will pay off down the road.”

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