Economists sceptical about Obama's way to rejuvenate middle class
Bhagyashree Garekar, Straits Times 5 Mar 09;
In a choppy economy shedding jobs by the thousands, the Obama administration's push to create 'green jobs' that pay better, cannot be outsourced and help save the environment - all at the same time - has generated much excitement.
Some colleges have begun lining up new courses, anticipating a surge in the demand for a green workforce, and students are showing greater enthusiasm for careers as wind turbine technicians, solar panel installers, fuel cell engineers or energy efficiency experts.
United States President Barack Obama sparked the excitement when he announced last month that more than US$20 billion (S$31 billion) would be invested in a cleaner, greener economy. He also set up a task force, led by Vice-President Joe Biden, which placed green jobs at the centre of its plan to rejuvenate the middle class.
Green jobs - broadly defined - are those which provide products and services that use renewable energy resources, reduce pollution, and conserve energy and natural resources.
Electricians who install solar panels, plumbers who install solar water heaters, farmers engaged in biofuel production and construction workers who build energy-efficient green buildings, wind power farms, solar and wave energy farms qualify as green jobs, the White House said.
Such jobs, according to Mr Obama's Council of Economic Advisers, pay 10 per cent to 20 per cent more than similar work outside the field and cannot be outsourced.
Moreover, investment in creating a green job apparently gives more bang for the buck. A joint study by an influential Washington-based think-tank, the Centre for American Progress (CAP), and the University of Massachusetts found that an investment of US$100 billion in energy efficiency and renewable technology could create two million jobs - nearly four times as many jobs as spending the same amount within the oil industry.
Mr Bracken Hendricks, an analyst at the CAP, justified the expenditure.
'Making buildings more energy efficient, constructing mass transit lines, installing solar panels, growing biofuels - all this work must take place right here, in both urban and rural areas. These jobs are impossible to outsource,' he said.
Many economists, however, remain unconvinced that the green jobs will measure up to the hype.
'There is great scepticism on several counts among economists about the very nebulous idea of green jobs,' said Mr Ken Green, an economist at the American Enterprise Institute.
Investing money in green jobs means diverting money from elsewhere. The rosy scenarios on green jobs fail to account for job losses in mining, oil, transportation and other sectors through such policies that tax these sectors, he said.
Second, the claim that green jobs involve no outsourcing is a myth, say experts. The concrete, steel and silica needed for installing an insulated roof or constructing a windmill can be outsourced, said Ms Sophia Koropeckyj, a senior labour economist at Moody's economy.com.
To acquire all the materials from within the country would contravene trade laws and lead to protectionism from US trading partners at their end.
Conversely, all the jobs in the oil industry from the point gas is shipped in cannot be outsourced either, said Mr Green.
'It is also unclear how employing more people at higher wages that green jobs supposedly fetch is efficient or beneficent for the economy or the consumers,' he said.
Third, spending by the government is wasteful. The billions invested to create these jobs will be routed via the federal and state governments and some studies show that just about 18 per cent of such money typically goes into the projects, the rest being used to meet administrative costs.
Fourth, the time span to create green jobs is longer than envisaged by the Obama administration.
For instance, the planned 14,480km of new power lines to carry electricity generated in remote
areas will have to pass through private property, national parks and state parks, and obtaining consent for putting up the lines will not be easy.
That is a 10-year project, not one for creating jobs in two years, said Mr Green.
Ms Koropeckyj was doubtful that job losses could be stanched this year. Her research outfit, after taking stimulus spending into account, was projecting a net job loss this year and a recovery next year.
'The green part of the industry is a very small part. And the idea that the government can create green jobs to neutralise those that are being lost would be more palatable if it were over a longer time period,' she said.
bhagya@sph.com.sg
Examples of green jobs
BROADLY defined, they are jobs which provide products and services that use renewable energy resources, reduce pollution and conserve energy and natural resources. Electricians who install solar panels, plumbers who install solar water heaters, farmers engaged in biofuel production and construction workers who build energy-efficient green buildings, wind power farms, solar and wave energy farms qualify as green jobs.
According to Mr Obama's Council of Economic Advisers, such jobs pay 10 per cent to 20 per cent more than similar work outside the field and cannot be outsourced.
