The electric power sector supports about 5% of U.S. jobs, directly and indirectly, and is responsible for about the same percentage of national GDP, according to an industry-backed study released Aug. 2.
Consulting firm M.J. Bradley & Associates conducted the analysis on behalf of the Edison Electric Institute, the American Public Power Association and the National Rural Electric Cooperative Association. The firm said the study illustrates the power sector's significant role in the U.S. economy and that understanding the industry's value is crucial for policy decisions related to employment and economic growth.
The 32-page report said the electric power industry directly provides almost 2.7 million jobs nationwide, including supply chain employment in the natural gas and coal sectors, and more than 4.4 million indirect jobs, together representing about 5% of all jobs in the U.S. The median salary for the industry is $73,000 per year, twice the national median wage. In addition, the power sector contributes a combined $880 billion annually to U.S. GDP, also about 5% of the national total. That figure is made up of $274 billion in direct industry contributions, about 1.6% of the nation's total GDP, and $606 billion in spending by the more than 7 million-job workforce directly and indirectly generated by the power sector.
The study also pointed out that the power industry is "the most capital-intensive" in the U.S., investing more than $135 billion in capital projects in 2016, more than twice the level a decade ago. "These investments benefit customers and support jobs dedicated to building smarter energy infrastructure and to creating a cleaner generation fleet," the report said.
The power industry is undergoing a major transformation as older coal-fired plants retire and are replaced with new natural gas-fired generation and, to a smaller extent, new renewable facilities running on wind and solar energy. Emerging technologies such as demand response, energy storage and distributed generation from rooftop solar and other resources are also on the rise. The study from M.J. Bradley & Associates did not, however, break out employment or other economic contributions by energy source or technology.