The elusive green collar job

Someone help me puzzle this out:

Proposition 1: a shift to renewable energy and energy efficiency will result in a boom in green collar jobs, good service-industry work that can’t be outsourced. This proposition is attractive because it holds forth the promise of a grand alliance between greens and the labor movement. See, e.g., Tom Friedman and everyone who posts on Grist.

Proposition 2: the optimism over green-collar jobs is a classic example of the make-work bias, a widespread economic fallacy that mistakes amount of work for wealth creation. The actual effect of greenhouse gas reductions on labor markets is unclear, so environmentalists should stick to environmental policy. See, e.g., various environmental economists.

I don’t have a clever opinion here, although I will say that the case for a positive labor impact from energy efficiency measures seems decently solid. Efficiency is, after all, an unambiguously good thing for the economy as a whole. If it costs us less to get the same amount of stuff, we’re all richer. Certainly this is a nice thing for consumers, and because energy industries tend not to be labor-intensive, we can expect that wealth creation at the expense of energy producers will be a net benefit for employment as well. I think.

The impact of renewable energy, on the other hand, is more difficult to suss out. More to the point, it’s not clear that anyone has sussed it out. Discuss.

Photo available under Creative Commons license from Flickr user billjacobus1.

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  1. disdaniel - January 22, 2008

    Proposition 1 would be much stronger if we (as a country) make a real commitment to promoting green energy sources. I would argue that many EU countries (especially Germany) and to an extent Japan (with solar) have made a real commitment–and it shows. A real commitment includes a limited duration national incentive (an investment not a subsidy!) and rules that put green energy on an equal footing with traditional energy (establishing a carbon price and national net metering).
    At that point we would attract the necessary investment to not only transform our energy infrastructure (which will create numerous installation and maintenence type jobs), but also to export green technologies around the globe (the real prize imho).
    Proposition 2. Green power industries have not achieved significant scale (with the possible exception of wind) so you should expect that the actual number of jobs created to both fall well short of a linear extrapolation based on today, and also to create many more jobs in ancilliary industries than we currently associate with green tech.
    My 2 centavos.

  2. flashdaddy - January 23, 2008

    Converting to green energy will not create a significant number of new jobs. Sure it will have a positive effect on manufatcturing of wind turbines and PV panels, etc. But the existing infrastructure (coal, gas, nuke plants) is very labor intensive, lots of moving parts, harsh environments, etc., while wind farms and solar power plants have shown to have low maintainence costs. Construction of the new green energy plants and manufacturing of the hardware will create a short term boost in jobs, but long term I think it will be a wash at best.
    As for the impact of green on the economy, it will likely have many good and bad short term impacts, but long term, people will figure out how to work within the new constraints and profit. Greed is a great motivator that way.

  3. Kevin Geery - January 23, 2008

    Read Natural Capitalism by Paul Hawken, Amory Lovins and L. Hunter Lovins. This is a must-read book for anybody thinking about the transformation of the present situation to a brighter future for us all. Things change. It is up to us to make sure things change in a positive way. To paraphrase Einstein, a better way of thinking is needed.

  4. Chad - January 23, 2008

    You are right flashdaddy. A transition from fossil fuel energy to green energy will not create many more jobs than it eliminates. It might even result in a net reduction of jobs.
    And critically, THAT IS A GOOD THING. I really hope everyone reads the article linked in the blog. Job creation is a BAD thing. We do not want jobs. We want the products of a job. They are not the same thing.
    It is critical that everyone understand the difference.
    I could throw a rock through your car window tonight. It would create lots of jobs (for police, lawyers, judges, insurance agents, auto repairmen, etc). Yet is an undeniably bad thing.
    Every time you here a politican blathering about “creating jobs” they are full of it. Ignore them.

  5. G-man - January 23, 2008

    One thing being missed here is the lowest hanging fruit for “green collar” jobs: energy efficiency. The greatest energy and carbon reductions per dollar spent are found by doing simple, blue/green-collar things like putting in more insulation, sealing cracks, and installing better windows on the millions of existing homes.
    I bet converting the USA’s existing inventory of inefficient homes would be a multi-decade job for a veritable army of relatively easily-trained home technicians. We’ve got a LOT of old homes out there (and don’t get me started on throwaway apartment building construction).
    These would not be “created” jobs for the sake of creating jobs: they would add real value by making our entire living system more economically efficient.
    Why are we not doing this? Too blue collar? Not as glitzy as solar panels? Love to hear your thoughts, folks.

  6. Rob - January 28, 2008

    People who say that creating jobs is a bad thing are unduly simplifying.
    The reason people like jobs, and indeed that macro-economists like low unemployment rates are two-fold: people sitting idle are a “waste” from an economic point of view, and fewer jobs implies higher concentrations of wealth, all else equal.
    If I write software that does the jobs of 10 people, I might get paid as much as two or three of them, so I make more money, they lose their jobs, and my employer makes more profits. That’s economically “good”, since we’ve raised efficiency, but unless that’s corrected for after-market (through progressive taxation and a social safety network) then it’s not actually that good. The other way to fix it is..wait for it..more jobs.
    Creating work is bad. Reducing efficiency is bad. But helping people who want to work get jobs is good. Economic policies *do* cause expansion and contraction in the job market, so politicians do have influence on it (though the central banks probably have more.) However, generally you’re right; politicians — especially American — seem to speak of creating jobs in a micromanagement kind of way, and that’s bad.
    This helps answer part of the conundrum, Adam — IMO the make-work bias (and others in the Reason article) are not completely bogus; they’re rooted in intuitions people have about the world around them. A lot of those intuitions are themselves fairly bogus, but some have correct translations into economic reality.