There are so many delusions running through the Biden administration’s climate agenda that it seems unfair to pick out just one for discussion today, but there will be other opportunities on other days, and so today it’s worth taking a quick look at the idea that this agenda will, as a whole, create jobs on, to use a possibly unfortunate word, any sustainable basis. That’s not to deny that some sectors will benefit. There will, for example, be plenty of openings for bureaucrats and enforcers of many descriptions. Some of those jobs will be well rewarded: command-and-control is like that.
To believe that overturning much of the basis on which our market economy has been run (and doing so in a relatively short period) will lead to an employment bonanza is either delusional or very, very optimistic. The same can be said about those who peddle the idea that this happy outcome lies ahead, although there are plenty of other considerably less polite adjectives that could also be used to describe them.
Those adjectives might be heading climate warriors’ way rather sooner than some might like.
Sarah O’Connor, writing in the Financial Times:
My exchange with Gideon Rachman about climate change last week got me thinking about the problem facing democratically elected politicians everywhere: how to sell some of the painful measures that will be necessary to avert environmental catastrophe.
“Environmental catastrophe”! The FT is going to FT, but that’s another discussion for another time. Meanwhile there are also plenty of measures that can be put in place to reduce climate risks that do not involve following the warped priorities and lunatic timetables now being pushed by so many governments (and those who advise them) — in the West, anyway. That, too, is a discussion for another occasion.
Back to O’Connor:
In the US, President Joe Biden usually stresses the benefits of combating climate change over the costs. Here’s what he said earlier this month, for example, at a White House event on electric cars:
“When I hear ‘climate’, I think ‘jobs’ — good-paying union jobs . . . If we act to save the planet, we can also come out of it better. We can create millions of good-paying jobs that generate significant economic growth and opportunity, to raise the standard of living for people not only here, but around the world.”
I can see why it’s smart politics to promise a green jobs boom. But I wonder if it’s also a risk. If those jobs don’t materialise, or they’re insufficient in quantity or quality to replace the jobs that will be lost in carbon-heavy sectors, the result could be a “betrayal” narrative that turns nasty.
Do you think?
The mismatch between the objectives of those promoting the current climate agenda and what is electorally palatable already explains why so much of this agenda is being pursued via the regulatory or corporatist route rather than through legislatures. That mismatch is going to get a lot worse, something with ominous implications for the proper functioning of Western democracy.
O’Connor refers to an article in the New York Times from July, in which it was “argued [that] the green economy was “’shaping up to look less like the industrial workplace that lifted workers into the middle class in the 20th century than something more akin to an Amazon warehouse or a fleet of Uber drivers: gruelling work schedules, few unions, middling wages and limited benefits.’”
She felt that assessment was “a bit harsh”:
Data from the latest US Energy and Employment Report show median hourly wages in the solar and wind industries are about $24 and $26 respectively, roughly a third higher than the national median wage. That said, they pay substantially less than jobs in fossil fuel sectors, and their unionisation rates are lower too. That should hardly be a surprise. Nascent industries such as solar energy are developing in an era where unions are hugely diminished in scale and influence. But Biden is the most pro-union US president in decades: it will be interesting to see which levers he can pull to fulfil his promise that these will be “good paying union jobs”.
Indeed it will: After a century of central-planning failures, it’s not unfair to observe that good jobs are rarely created by a politician pulling a lever. Maybe the clever and canny architect of our recent triumph in Kabul can beat the odds, but taxpayers shouldn’t have to bet on it — although they will be forced to.
It is well worth reading the New York Times’ article in full, not least the discussion on union issues and the economics of building, say, a wind farm. But securing well-paid jobs is going to involve rather more than higher rates of unionization. (Most) renewables have either been developed (or transformed into their current form) in the age of automation, and it shows:
Many solar farms often make do without a single worker on site.
And it is not enough that the ‘climate economy’ spurs the creation of new (and well-paid) jobs. It must create enough of them to make up for the existing jobs that will inevitably be lost in the transition towards net-zero greenhouse-gas emissions.
From the New York Times article (my emphasis added):
Since 2000, the United States has lost about two million private-sector union jobs, which pay above-average wages. To help revive such “high-quality middle-class” employment, as Mr. Biden refers to it, he has proposed federal subsidies to plug abandoned oil and gas wells, build electric vehicles and charging stations and speed the transition to renewable energy.
Industry studies, including one cited by the White House, suggest that vastly increasing the number of wind and solar farms could produce over half a million jobs a year over the next decade — primarily in construction and manufacturing.
David Popp, an economist at Syracuse University, said those job estimates were roughly in line with his study of the green jobs created by the Recovery Act of 2009, but with two caveats: First, the green jobs created then coincided with a loss of jobs elsewhere, including high-paying, unionized industrial jobs. And the green jobs did not appear to raise the wages of workers who filled them.
The effect of Mr. Biden’s plan, which would go further in displacing well-paid workers in fossil-fuel-related industries, could be similarly disappointing.
Adding the knock-on effects of the administration’s climate agenda on other areas of the economy (spoiler: they won’t be positive), and it’s difficult to feel much confidence in predictions of a positive net effect on jobs or wages.
Then throw in the impact of, say, higher corporate taxation or the continuing automation wave on employment . . .
But those are yet more discussions for another day.