Can green jobs save the day?
David Frum asks: “What exactly is a ‘green’ job?” His confusion arises from the fact that a number of disparate claims and arguments all get loosely joined under the rubric of green jobs. I want, in this post, to try to pick apart a few of those claims so we can discuss them with more precision and maybe get past the sloganeering that’s surrounded the subject lately.
First, though, I want to endorse what Matt Yglesias says here:
[W]hen politicians want to talk about economic growth, they tend to talk about “jobs.” Absolutely all politicians do this. When governors want to brag about how lots of people have moved to their state, they say they “created jobs.” When critics of carbon pricing say that cap-and-trade will “destroy jobs,” what they mean is that it will slow economic growth. When Newt Gingrich says we can “create jobs” by drilling for oil everywhere, he’s saying that he thinks the optimal long-term growth strategy for the United States is to try become more of a natural resource extraction economy. It is true that when Barack Obama touts “green jobs” as the future of the American economy, he’s saying something that doesn’t literally stand up to scrutiny. What he means is that he wants a higher productivity economy that also has less pollution. But the only analytic error he’s making here is the exact same analytic error that all politicians are making when they talk about “job creation.” Over the long-term, the quality of economic policy determines productivity and wages, not the quantity of jobs.
Right. At the most general level, “green jobs” is just a kind of signifier, meant to gesture at a cleaner, prosperous economy. Yet for some reason, unlike with other “jobs” rhetoric, the minute it comes up everyone becomes a literalist and a beancounter. If Matt’s frustrated by that, well, welcome to my world, where hippie efforts to make the world a better place are subjected to a degree of skepticism and hostility wildly out of proportion to what faces regular, daily efforts to make the world more polluted and unpleasant. Ahem.
Anyway, as I said, there have always been several different sub-pitches involved in the green-jobs pitch. The “green” part is for environmentalists. For minorities and social-justice groups, there was Van Jones’ “pathway out of poverty” part, the notion that these new jobs could be channeled to the most needy. For unions, there was the “new source of high-skill, high-wage manufacturing jobs” part. And for the country at large, suffering from crippling unemployment, there was the “lots of jobs” part.
This was not some sort of mistake or sloppiness on the part of leftie strategists. It was on purpose, and by necessity. The whole idea was to come up with a pitch that could unify a broad political coalition behind it.
The problem is that the kind of policies that would lower carbon emissions are different from the policies that would help disadvantaged populations are different from the policies that would create domestic manufacturing jobs are different from the policies that would meaningfully reduce unemployment. So while the upside is a potentially broad coalition pushing the same policies, the downside is that any individual policy is going to disappoint a big chunk of the coalition!
Some thoughts on each of the threads:
1. When it comes to meaningfully affecting national unemployment, most of what passes for green policy isn’t going to show up on the radar. The U.S. has an almost $15 trillion economy. It’s really big! Most analyses (that aren’t done by industry groups) tend to show that even the brass ring of green policy — a cap-and-trade program or carbon tax — wouldn’t affect GDP 20 years out by more than a point or two. If you want to move the dial on unemployment, you need big guns: looser monetary policy or substantial public investment.
The U.S. economy desperately needs new sources of economic growth that aren’t based on asset bubbles or debt. I do believe that efforts to lighten our resource footprint and shift to sustainable sources of energy could provide that source of growth. But if we’re being honest, nobody really knows exactly why the economy has stagnated for decades or how it could be kick-started again. Promising that the “green economy” will rescue the U.S. economy is extreme overreach.
2. Then there’s the claim that green policy — carbon tax, renewable energy standards, pollution standards, whatever — will specifically create high-wage, high-skill manufacturing jobs. This is the claim that Frum is skeptical about. He points out that fossil-fuel extraction and processing create tons of domestic jobs, but there’s no reason renewable-energy equipment like solar panels can’t be made elsewhere and imported. In fact, he says, they probably will be.
A comprehensive recent Brookings study might reassure Frum. It finds that, relative to average jobs in the U.S., a higher percentage of green jobs are in manufacturing: “About 26 percent of clean economy jobs are in manufacturing, and the value of exports, on a per-job basis, is twice that of a typical American job.”
Does this matter? Folks like Ryan Avent think the whole manufacturing fetish is silly and oppose targeted manufacturing policy — trade tariffs, “made in the U.S.” provisions, subsidizing domestic investments, and the like. Then again, it’s pretty damn important for getting powerful unions on board with your political coalition.
Anyway, I’m ambivalent on the manufacturing question, but we should be able to see it as a separate issue from green policy.
3. The story on “jobs for poor people” is roughly the same. Brookings did find some evidence that wages in the clean economy are slightly higher than average and that it includes more than an average number of people with no higher education. But the numbers there are small enough that I think we can conclude that a clean economy, in and of itself, is not going to be an anti-poverty program.
And that’s OK. There’s green policy, and there’s policy designed to prepare poor and disadvantaged populations for work and find them jobs, but they are not intrinsically connected. It’s politically powerful when they overlap — it might be a political sweet spot for some politicians targeting some demographics — but I worry that it confuses things to act as though “green jobs” are inherently helpful to the poor.
4. And finally, there’s the green part of green jobs. I take this to be the claim that a massive, society-wide effort to reduce our carbon footprint will create a lot of jobs. And that seems, to me, obviously true. There’s a lot of work to do! A lot of new infrastructure to build, new mechanisms for financing to develop, new technologies to innovate, new industries to build.
In addition to that obvious intuitive point, there’s the somewhat more sophisticated point that any country’s productivity is a recipe involving capital, labor, and energy. Moving aggressively into energy efficiency reduces energy and capital and increases labor — same productivity, more jobs!
The story with renewables is somewhat more nuanced. Dan Kammen and his colleagues rounded up 13 independent analyses [PDF] and con
cluded that renewables create more jobs than coal or natural gas per megawatt generated and per dollar invested. Of course, economists will tell you that means they’re less efficient — you’re “spending” more labor to get the same product. But that’s nothing to apologize for: We are now, and probably will be for years, in a demand-driven recession, so a little labor-intensive inefficiency is just what the doctor ordered.
Anyway! As I said, for the most part “green jobs” is just an innocuous political slogan and shouldn’t be forced to bear all the weight analysts are trying to put on it. But insofar as we want to dig in, we need to keep all the disparate claims about green jobs distinct. Because you know how important facts and clarity are in politics these days. Ahem.