Green Watch

Green Jobs: How unions and environmentalists came together to damage the U.S. economy

From the November 2012 issue of the Capital Research Center’s Green Watch:

(PDF here)

The definition of “Green Jobs” is very slippery, especially in the hands of activists and politicians. And while they inflate the number of possible green jobs, they almost entirely ignore all the costs of their top-down efforts at “greening” the economy. But the green jobs crusade has had one success: bringing together radical activists and unions in an alliance to consume tax dollars.

The date was June 6, 2012, the setting, an ornate hearing room in the Rayburn House Office Building, where the full House Government Reform and Oversight Committee was investigating definitions of green jobs. The committee chairman, Rep. Darrell Issa (R-Calif.), was questioning John Galvin, acting commissioner of the Bureau of Labor Statistics (BLS), on the meaning of the “3.1 million green jobs” figure that his agency had recorded in data released in March.

“If you sweep the floor in a solar-powered facility, is that a green job?” Issa asked. The answer was yes. How about hybrid bus drivers and all the other bus drivers and workers who put gas in buses? Yes, they have green jobs. Employees at bicycle shops have green jobs. So do workers at antique dealers, at the Salvation Army used clothing recycling centers, and at used record stores, because used items count as recycled goods.

College professors who teach environmental courses? Green jobs. Oil company lobbyists? Green jobs.

As a witness at the hearing, I explained that, because the white paper cup placed before me on the table had a “Power to Save Energy” logo, employees who produced it had green jobs. The product met the BLS definition of “environmental compliance, education, training and public awareness.” If the paper cup had been pure white, without the logo, its producers would not have had green jobs.

When the Bureau of Labor Statistics can define producers of cups with environmental logos (but not without environmental logos) as having green jobs, along with oil lobbyists and all the others, the definition is meaningless. The “3.1 million green jobs” figure is a matter of relabeling, not of creating new opportunities for Americans to work or new opportunities to move up the career ladder. And with slow economic growth and job creation, and unemployment rates above 8 percent for over 43 consecutive months, Americans need more jobs, not reclassification of old jobs.

The administration may tout 3.1 million green jobs as a large number, but 3.1 million shows a lack of imagination and ambition. If BLS can “create” green jobs by simply relabeling existing jobs as green, why stop at 3.1 million? If oil lobbyists can bask in the social approbation of a job labeled “green,” why shouldn’t every American enjoy the same approval? Saying that everyone has a green job would be less arbitrary than picking 3.1 million Americans almost at random and labeling their jobs as green.
In contrast to the fuzzy “3.1 million green jobs” number, some numbers in the economy are treated with utmost precision. Based on a survey of 400,000 businesses, the BLS issues a monthly estimate of jobs created in the economy, and each estimate is revised for two consecutive months. Finally, about a year later, the figure is benchmarked against an aggregate count of jobs for accuracy.

Another example of BLS precision is tax return data. Both companies and households face severe penalties for cheating on tax returns. The number has to be absolutely correct. Corporations that report financial information to the Securities and Exchange Commission must meet exacting standards and sometimes undergo multiple audits. If mistakes are found in an Internal Revenue Service audit, people can go to jail.

Given the government’s ability to closely monitor numbers, it is shocking that the BLS publishes such a baseless 3.1 million green jobs number. It’s a sign that the issue is not taken seriously, that the search for green jobs is just window-dressing to appeal to some environmental constituency. When the government plays around with numbers to this extent, it is a recipe for disaster. Someone is trying to trick the voters.

The birth of “green”
An attempt to understand the concept of green jobs must begin with an understanding of the concept’s origin. Some trace the current idea of “green” to the 1970 book The Greening of America by Charles Reich, a Yale law professor who taught both Bill and Hillary Clinton. But Reich’s book was about the student revolutions of the 1960s. It was a tribute to the counterculture—to hippies, blue jeans, rock music, and marijuana—and an attack on what Reich saw as the American Corporate State. It has little or nothing to do with the current idea of green jobs.

Reich criticized jobs not for destroying the environment, but for rigidity: “Jobs and occupations in the society are rigidly defined and controlled, and arranged in a hierarchy of rewards, status and authority. An individual can move from one position to another, but he gains little freedom thereby, for in each position he is subject to conditions imposed upon it….” Students protesting in the 1960s cared about self-fulfillment, not green jobs.

It was not until 1999 that the term “green collar” was popularized by Alan Durning, a former researcher at the Worldwatch Institute, a research organization in Washington, D.C. In 1993, Durning founded Northwest Environment Watch (now Sightline Institute) in Seattle. In 1999, he wrote a book entitled Green Collar Jobs—”green collar” as an extension of the terms “blue collar” for manual labor and “white collar” for office work. The book was a response to changes in the economic base in towns of the American Northwest. Initially, the terms “green collar jobs” and “green jobs” referred to jobs that were seen as friendly to the environment, such as tourism and sustainable forestry, as opposed to job in extraction industries such as coal, oil, gas, and, in its traditional form, the timber industry.

Durning, who believed that traditional forestry work in the Northwest was disappearing and would be replaced by more high-tech jobs, asked whether job growth and the environment could become complementary. He associated the advent of the Information Age with “industries that spin wealth not by moving more timber or steel…but by moving electrons, or stimulating neurons, in more profitable ways.” He worried that job losses that had occurred in traditional blue collar sectors had had negative consequences for the poor and created wider income disparities than ever before.

Durning’s book Green Collar Jobs did not lead directly to the modern green jobs movement, which is rooted in political and social agendas unrelated to the book, but the environmental movement did take notice of Durning’s effort to tie environmental protection to jobs. The movement soon incorporated a version of the “green collar jobs” concept into its message.

The term “green collar” was catchy and came at just the right time for environmentalists—when they were seeking to make common cause with labor unions, which had sometimes fought green extremists over the destruction of jobs by overregulation. If green policies were seen as creating rather than destroying jobs, then environmentalists and unions—two of the most well-organized and well-funded forces in U.S. politics—could unite behind a single flag.

Apollo launches
At that point, Bracken Hendricks, an environmentalist who served as a special assistant to Vice President Al Gore, was laying the foundation for the green jobs movement. In a speech at the left-wing Take Back America conference, he proclaimed the creation of the Apollo Alliance for Energy Independence. (See “The Apollo Alliance: Unifying Activists on the Left,” in the October 2009 Foundation Watch.)

The “Apollo” reference was to the Apollo program, announced by President John F. Kennedy in May 1961, with “the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth.” The Apollo Alliance would support a similar crash effort, this time to create an economy based largely on green jobs.
The organization officially launched the following year, with help from the Tides Center, the Center for American Progress, and the Center on Wisconsin Strategy (CWS), housed at the University of Wisconsin-Madison. Key backers of the new group included Professor Joel Rogers of the CWS, former Democratic National Committee research director (and future Obama 2008 staffer) Dan Carol, former Sierra Club executive director Carl Pope, Robert Borosage from the Institute for America’s Future, United Steelworkers president Leo Gerard, and the Service Employees International Union’s vice president Gerald Hudson and president Andy Stern. Supporters included Sen. Maria Cantwell (D-Wash.) and Rep. Jesse Jackson Jr. (D-Ill.).

The new organization offered a ten-year plan, “a bold vision to catalyze the transition to a clean energy economy.” Soon, with Hendricks as executive director, the Alliance had the endorsement of more than 200 organizations. He pledged that the organization would end the dichotomy on the Left between activists focused on the environment and those focused on the economy. This vision included, in Hendricks’ words, “a meaningful role for government acting in the public interest.” That meant that the green jobs movement would pursue government subsidies and government mandates that would benefit unions while promoting environmental causes.

Hendricks proposed spending $300 billion over ten years in order to create 3 million “good” jobs. The stated goals were to increase the country’s national energy diversity, promote “high performance building,” promote investment in domestic manufacturing, and rebuild public infrastructure.

In 2007, Hendricks and Rep. Jay Inslee (D-Wash.) authored Apollo’s Fire: Igniting America’s Clean Energy Economy, which was presented as the Alliance’s manifesto. They proposed a set of federal policies which, they claimed, would prevent both unemployment and global warming. But they did not take note of the risks involved in spending billions of taxpayers’ dollars on green companies, and many of the companies they endorsed, such as SkyPower, EarthFirst, VeraSun Energy, Aventine Renewables, and Pacific Ethanol, have gone bankrupt.

Apollo made little effort to hide its ties to extremists. One of its consultants and the director of its New York affiliate was Jeff Jones, a founder with Bill Ayers of the Weather Underground terrorist organization, and Apollo’s steering committee included Van Jones (see nearby sidebar).

Regulating hiring in order to promote green jobs
As the Apollo Alliance was achieving fame, Raquel Pinderhughes, an urban studies professor at San Francisco State University, documented the growth of green collar jobs in the San Francisco area. She found more than 100 firms and institutions, covering 22 sectors, including hazardous materials clean-up, solar panel installation, home performance (including insulation and weatherization), public transit, landscaping, and bicycle repair.

Pinderhughes had her own definition of green collar jobs: “blue collar work force opportunities created by firms and organizations whose mission is to improve environmental quality.” She analyzed the trend in San Francisco Bay Area laws and programs designed for that purpose. These include policies “related to zero waste, energy and water conservation, residential solar energy, whole home performance, local procurement, open space, and strengthening local food systems.” At the same time, she observed an increase in the number of Bay Area residents who chose to spend money on goods and services that are beneficial for the environment.

“Wall Street [has] overwhelmed the political process,” Pinderhughes declared, and the “free market solutions that rule our economy today” have proven to be insufficient to solve the nation’s labor and environmental problems. She said the government should offer rewards to firms that improve environmental quality; it should subsidize green collar jobs and make sure those jobs provide secure wages and benefits; it should make unions the main suppliers of workers for those jobs; and it should require that some of those jobs go to workers with limited education and skills. (All these elements were included in the Energy Independence and Security Act of 2007.)

Pinderhughes, in her comprehensive study Green Collar Jobs, analyzed the capacity of green businesses to provide high-quality jobs for workers who find it difficult to find jobs. Based on data provided largely by the Apollo Alliance, she concluded that green collar jobs are good jobs, providing workers with “living wages,” many benefits, and opportunities for career advancement. The jobs, she claimed, have low barriers to entry and provide training for workers with limited skills.

Regarding green collar jobs in Bay Area cities, she wrote: “Providing low-income residents with access to living wage jobs is a critical step towards alleviating poverty, unemployment, and racial inequality. In this context, the deliberate cultivation of green collar jobs for men and women with barriers to employment provides city staff, staff in jobs training programs, and green business employers with a unique opportunity to work together to bring the benefits of green economic development to low-income residents and communities.”

All this seems too good to be true, and it is. Like every other author of green literature, Pinderhughes neglected an essential factor related to the change she was advocating: the cost to the economy. How are such programs to be paid for, and what sacrifices must be made to support this new, hypothetical, unproven sector of the economy?

The AFL-CIO: better to switch than fight
In the middle of the first decade of the twenty-first century, America was hemorrhaging jobs. Then came the movement for green jobs. Would the AFL-CIO, America’s largest labor union group, fight against green jobs to protect traditional unionized jobs in the manufacturing sector—a sector often attacked by environmentalists—or join forces with the politically powerful green jobs movement?

Well, if you can’t beat ‘em, join ‘em.

By 2007, labor unions, which had traditionally been opposed to global warming legislation, came on board the global warming bandwagon. Leo Gerard, president of the United Steelworkers and vice president of the AFL-CIO, became “outraged by melting ice caps, rising sea levels, and killer hurricanes” and committed his forces to fighting for “corporate accountability” for the mess that had supposedly been made by the belching of greenhouse gases. The steel industry had been depopulated, shrinking from 850,000 jobs to 57,000, but Gerard saw a golden opportunity with the Apollo Alliance’s ten-year, $300 billion program. He won the support of the AFL-CIO leaders and other union officials. Apollo, the argument went, would ensure that American workers would benefit from, rather than be adversely affected by, efforts to reduce greenhouse gas emissions.

This alliance was not inevitable. Efforts by global warming activists have had potentially negative consequences for organized labor, whose members face the prospect of job losses. One would think some opposition to Apollo would continue from at least some unions, particularly in the coal and auto industries. (In 2012, the Laborers International Union of North America criticized President Obama’s decision not to approve the Keystone XL pipeline, but other unions such as the SEIU and the United Autoworkers fell in line behind the President.)

Until 2006, the AFL-CIO avoided the global warming issue, but by early 2008, with the Apollo Alliance promising millions of green jobs—and billions of government subsidies—the union group joined the environmentalists’ fight and called for “a new industrial policy, an environmental economic development policy.” That same year, the United Steelworkers and the Sierra Club launched the BlueGreen Alliance with the slogan “Good Jobs, a Clean Environment, and a Safer World.”

The feds step in
In 2007, President Bush signed into law the Energy Independence and Security Act, which included as Title X the Green Jobs Act, sponsored by then-Representative Hilda Solis, a California Democrat. (Solis because Secretary of Labor in 2009 and took charge of implementing her own legislation.)

The Green Jobs Act authorized funding for green collar job training in the areas of retrofitting buildings, installing solar panels, setting up wind farms, and building energy efficient buildings, among others. The bill authorized funds for states to offer grants for labor management training programs and apprenticeships, in order to coordinate green jobs programs with union officials. Other sections contained incentives for construction of green buildings, with particular reference to federal buildings.

The green jobs movement also began to boom among international organizations in Europe and Asia. In 2007, the Green Jobs Initiative (GJI) was launched jointly by the United Nations Environment Programme, the International Labour Organization, and the International Trade Union Confederation. The International Employers Organization joined in 2008. Through conferences and recommendations, the GJI “supports a concerted effort by governments, employers and trade unions to promote environmentally sustainable jobs and development in a climate-challenged world.”

In 2008, during the presidential primaries, the BlueGreen Alliance called on candidates to commit to reducing carbon emissions by two% every year, increasing green manufacturing jobs by two%, and re-writing American trade laws to advance standards favored by unions and environmentalists. Toward that end, BlueGreen supported tariffs on imports. (The group would merge with Apollo in 2011.)

The 2008 campaign was a turning point, as the concept of green jobs etched its way into the platforms and promises of presidential candidates. Among Democrats: Then-Senator Barack Obama said green jobs were “central” to his energy plan and called for a $150 billion green jobs “investment” (by which he meant, commitment to spend taxpayers’ money). Then-Senator Hillary Rodham Clinton declared her intent to “put money into clean-energy jobs, green collar jobs” in order to “jump-start” jobs in America, and she called “renewable” energy jobs “the jobs of the future.” Former Senator John Edwards promised, if elected, to “create 150,000 green collar jobs a year.”
On the Republican side, Senator John McCain called for research and development of green technology, which would provide the “path to restore the strength of America’s economy.”

Barack Obama’s victory brought green jobs to the fore. In February 2009, the President signed the American Recovery and Reinvestment Act, the so-called stimulus bill, which provided $500 million in direct green jobs grants, with provisions to create jobs in the industries of “energy, utilities, construction, and manufacturing as well as job training,” as one government publication put it.

Senate Majority Leader Harry Reid (D-Nev.) gave Apollo its share of the credit, saying, “This legislation is the first step in building a clean energy economy that creates jobs and moves us closer to solving our enormous energy and environmental challenges. We’ve talked about moving forward on these ideas for decades. The Apollo Alliance has been an important factor in helping us develop and execute a strategy that makes great progress on these goals and in motivating the public to support them.”

To serve as coordinator of the green jobs initiative, President Obama in March 2009 selected lawyer-activist Van Jones, a leader of the Apollo Alliance. Six months into his tenure as Special Advisor for Green Jobs, Enterprise, and Innovation at the White House Council on Environmental Quality—aka, “Green Jobs Czar”—Jones resigned. His resignation came after the revelation of his claim to have become a communist, after he was exposed as a supporter of “9/11 conspiracy theory” (in which the September 11 attacks are believed to have been a U.S. government plot), and after he was caught calling Republican congressional leaders an insulting term that begins with “a.”

While Jones was Green Czar, the White House pressured the Department of Energy to approve a half-billion-dollar loan guarantee to solar cell maker Solyndra, which went bankrupt. In his book The Green Collar Economy, Jones had called for the institution of a federal revolving loan fund to issue low-interest or long-term loans to risky green start-up companies. The government, he wrote, should proclaim (in the style of late night TV ads), “no credit, no problem” to any green company.

Bad for the economy, bad for taxpayers, bad for the poor
Green jobs are the most recent re-appearance of a perennial idea—industrial policy to promote certain industries. Industrial policy has failed in the past, in America, Japan, Russia, and numerous other countries across the globe and across the centuries. Today, green jobs initiatives result in a higher cost of energy to businesses, driving them to locate in other countries, and to households, who can afford fewer goods.

In his 2012 State of the Union address, President Obama declared, “Some technologies don’t pan out; some companies fail. But I will not walk away from the promise of clean energy…. I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here.”

No matter that Germany has announced an end to its solar subsidies by 2017 or that it imports energy from France and the Czech Republic because its solar panels do not produce electricity in the overcast winter months. Or that China generates less than two% of its electricity from non-hydropower renewables.

The bipartisan support of green jobs has become an excuse for remaking the economy with expensive industrial policies. Spending on green jobs now includes tax subsidies and direct grants for broadband, electric cars, so-called renewable energy (such as wind, solar, and biofuels), mass transit, high-speed rail, and environmental rehabilitation.

But government-subsidized projects often fail. For instance, Chevy’s electric car, the Volt, has caught fire for catching fire. The plug-in hybrid car’s batteries apparently burst into flames after some government crash tests. In March 2012, a five-week suspension of the Volt’s production was announced in reaction to low sales numbers, followed by a second suspension in September 2012. Meanwhile, Chrysler and General Motors have announced plans to produce—without the aid of a government program—pick-up trucks with dual fuel tanks, capable of running on both natural gas and gasoline.

Many new green jobs—manufacturing solar panels, wind turbines, and electric batteries, for instance—are being created in China and South Korea rather than in the United States. But the Chinese do not use the solar panels they produce to make their electricity; they use old-fashioned coal, an inexpensive way to operate their power plants. Instead, the Chinese export the renewable equipment to America, which raises our costs of production and makes it harder for American companies to compete with Chinese rivals.

Studies showing that green jobs policies create jobs and innovation in the economy are fundamentally flawed. Green jobs are not well defined—some are in construction, some exist already but are reclassified, and some are temporary. Studies come up with inconsistent results. One study by the Center for American Progress estimates that an “investment” of $100 billion will result in 2 million new jobs over two years. Another, by the Center for Energy Efficiency and Renewable Technologies, calculates that “investing” $50 billion a year will result in 500,000 new jobs annually.

These studies contain little analysis of jobs destroyed through green industrial policy, such as jobs in coal production, oil exploration and refining, traditional auto production, and incandescent light bulbs.

Nor do the studies consider the disparate geographical effects of green job industrial policies. Although these policies raise energy prices, lower production, and increase unemployment nationally, they have different effects on different states. Regulation of carbon will be especially harmful to the economies of Pennsylvania, Ohio, Kentucky, West Virginia, and Tennessee, which produce coal and rely on it to generate electricity. The failure of the Interior Department to resume permits for drilling in the Gulf of Mexico has slowed business in Gulf States.

Green energy is expensive. In 2015, a megawatt-hour produced from natural gas will cost $49-$79; from onshore wind, $75-$138; and from solar photovoltaic, $242-$455. In other words, compared to power from natural gas, wind power costs roughly 50-75% more, and solar power costs an extra 400-475%.

High energy costs from green energy mandates hurt poor and working-class people most of all. According to the Department of Labor, spending on electricity, natural gas, and gasoline and motor oil consumed 4% of household income for the top one-fifth of income earners in 2011. But the figure was 24% for those in the bottom one-fifth—and that was up from 22% in 2010.

Green energy is also expensive from the perspective of taxpayers. In fiscal 2012, green energy received $6.3 billion in direct federal spending plus $6 billion in federal tax breaks, according to the Joint Taxation Committee. Much of the green energy money is simply wasted. The Solyndra debacle wasn’t unusual; some 79% of the companies receiving Energy Department loan guarantees have gone bankrupt or missed production goals.

We are wasting resources and killing jobs to pursue dreams of green energy at exactly the moment when new technology has made mainstream energy sources more attractive than ever. In recent years, new hydrofracking techniques have resulted in a boom in oil and natural gas development, lowering the price of energy and creating domestic jobs. Lower energy costs are in turn attracting manufacturing back to America from overseas.

In America, policies are not cast in stone. We have reformed welfare programs. We have lowered tax rates from a top rate of 90%. We have abandoned the construction of the sort of large public housing projects that turn into havens for criminals and, over time, become nearly uninhabitable. We can also move away from expensive, inefficient green jobs policies when we find they hurt economic growth and provide little or no benefit to the environment.

Diana Furchtgott-Roth is a senior fellow at the Manhattan Institute. She served as chief economist of the U.S. Department of Labor and as chief of staff of the Council of Economic Advisers under President George W. Bush. This article includes material adapted from her new book, Regulating to Disaster: How Green Jobs Are Damaging America’s Economy (Encounter Books, 2012).