Defining Green (and Meaningful Net) Jobs
Thursday, 05/21/2009

The rush to save the American economy through the creation of so-called “green jobs” has started to spur research into whether the silver (or shall we say ‘green’) bullet really exists according to its promoters.
 
Recently, long-time Member of the U.S. Senate Environment and Public Works Committee, Kit Bond (R-MO), issued a report detailing aspects of green jobs creation that are getting increasing scrutiny: 1) Inescapable and expensive taxpayer subsidy requirements; 2) Documented low wages, and 3) Tradeoffs in the form of lost jobs to pay for creating green jobs. Click here to see the report.
 
The Bond report is sobering to say the least. Two high profile environmental group programs, the New Apollo Program, promoted by the Apollo Alliance, and the Green Recovery Program, by the Center for American Progress, would, at a cost of $500 billion and $100 billion respectively, create 5 million and 2 million jobs. That works out to a program (read taxpayer) cost of $100,000 and $50,000 per job, respectively.
 
But what kind of jobs do Americans get with highly subsidized “green jobs?” Some of the richest incentives documented resulted in lower wage jobs than the green marketing campaigns would suggest. For instance, the Bond report outlines three troubling examples:

Solaicx, Portland, Oregon – manufactures silicon ingots and wafers for photovoltaic applications and, after receiving $21.5 million in state and local subsidies to expand its plant and create 66 new jobs ($325,758 per job subsidy), workers are paid only $13.00 per hour.
 
United Solar Ovonic, Battle Creek, Michigan – makes thin film flexible photovoltaic laminates used in the solar industry. According to the report, the company got $96.9 million in subsidies (the company press release said $120 million) at a subsidy of $276,857 per job. Worker pay: $14.00 per hour.
 
Suniva, Norcross, Georgia – a manufacturer of crystalline silicon photovoltaic cells for the solar industry garnered $10 million in incentives to create an estimated 100 jobs when fully operational. That’s $100,000 per job. No word about worker pay rates at Sunvia, but you get the picture.
The same experience has been true in Europe where studies in Spain and Germany have shown the these type of huge taxpayer subsidies are needed to produce “green jobs.” Bond points out that “A study of heavy German subsidies for the solar industry revealed that ‘it is quite doubtful whether [the solar subsidies] net employment effects are positive at all.’” German taxpayers sunk 7.2 billion euros (or $281,000) per job subsidy to create 35,000 jobs. In Spain, taxpayers paid $37 billion to sustain 50,200 jobs in wind, mini-hydro and solar programs at a cost of over $700,000 per job. Whew!
 
Now the federal poverty wage for a family of four is $10.19 per hour. The Bond report looks at various green sector jobs such as carpenters, roofers, painters and laborers where it appears that a majority of these workers make less than $12.50 per hour and a third make less than the federal poverty wage. Bond compares this to figures from the Bureau of Labor Statistics pointing to the average hourly earnings of a manufacturing worker being $18.00 per hour.
 
Lastly, the Bond report looks at the emerging data that the creation of green jobs is being increasingly seen as a big contributor to lost jobs due to higher energy costs and lost investment.
 
The report indicates that, “Comparisons of wind, solar, nuclear natural gas and coal sources of power coming on line by 2015 show that solar power will be 173% more expensive per unit of energy delivered than traditional coal power, 140% more than nuclear and natural gas and 92% more expensive than wind power. Wind power is 42% more expensive than nuclear and natural gas power.”
 
Recent proposals before Congress and potentially driven by EPA regulatory activity directed at the U.S. power industry could dramatically drive up the cost of energy resulting in lost jobs. The Bond report highlights include:
 
Selected Estimated State Job Losses Under Proposed Climate Change Legislation

STATE
JOB LOSS
STATE
JOB LOSS
Ohio
143,000Michigan121,800
Pennsylvania139,000
Illinois156,900
Indiana78,600
Louisiana61,100
Missouri76,100
Arkansas39,600
Tennessee80,400Kentucky54,700
Nebraska25,100West Virginia
27,200

The report continues, “With just about every consumer product requiring energy at some point in its production, the U.S. Environmental Protection Agency (EPA) estimated that the legislation the Senate debated (last year) would by 2050 annually cost the average U.S. household $4,377 and raise gasoline prices by $1.40 per gallon. EPA projected that electricity prices would increase 44% by 2030.” While the debate rages over how to (or whether we can) meaningfully address changes in the earth’s climate, most would agree that this year’s draft legislation, originally introduced by Congressmen Waxman and Markey, is more costly as introduced than last year’s Lieberman-Warner proposal. The latest House draft that came out this week still may be more costly than anything that could survive in the Senate.
 
One should reflect on all of this in light of a recently-released internal OMB memo that questions the scientific objectivity of the recent EPA CO2 Endangerment Finding. The OMB memo points out that the decision to regulate carbon dioxide as a pollutant under the Clean Air Act “is likely to have serious consequences for regulated entities throughout the U.S. economy, including small businesses and small communities.” Further, the document states, “The finding rests heavily on the precautionary principle, but the amount of acknowledged lack of understanding about basic facts surrounding GHGs seem to stretch the precautionary principle to providing for regulation in the face of unprecedented uncertainty.” Ouch! The rest of the memo gets better – no wonder the Administration is spending lots of time tearing this one down.
 
OMB is the watchdog of the federal agencies. Before Congress and its leaders lead the American taxpayer headlong into an unsustainable spending spree to shore up the dubious economics of the renewable programs they are promoting, it needs to pay attention to the details of such far reaching government actions that can have a real and devastating impact on the economic circumstances of the American public.