Green Jobs Won't Pay

One step foreward, ten steps back...

The Obama administration is putting a lot of stock in the concept of "green jobs." In late February, Vice President Joe Biden threw his weight behind the green movement and the $20 billion in the stimulus package devoted to green investment. Biden claimed that people who earn $20 per hour prior to green job training can make as much as $50 per hour afterward.

Sounds great, right? But that scenario could be way off base. At least that's what a recent report from Good Jobs First says could happen if the creation of green jobs isn't backed by strong government regulation and oversight. GJF's report notes that it's not uncommon for workers in the green field to earn as little as $8.25 an hour. Wages at a number of wind and solar manufacturers are far lower than those at their more traditional counterparts—falling well below the income levels needed to support a single adult with one child.

Those numbers carry particular weight in considering how the green jobs movement is going to spur the U.S. economy, as a job that pays $18 an hour is reported to create twice the economic stimulus of a job that pays $9 an hour. Although Biden is proud to claim that a worker earning 20 bucks an hour can more than double his or her wage with some "green" training, he doesn't take into consideration those making far less.

The U.S. Bureau of Labor Statistics says the average wage rate for production workers on manufacturing payrolls in durable goods industries is $18.88 an hour. But GJF's report shows that a majority of wind and solar companies it surveyed pay far less than that amount. Take United Solar Ovonic as an example. After receiving generous government subsidies amounting to $277,000 for every new job created, the company refused to meet the prevailing wage rule in Battle Creek, Mich., and pay $16 an hour. The company quickly started threatening to move its operations elsewhere. The city eventually backed down and allowed the company to pay its workers $14 an hour—70 percent of what it takes to sustain a family of four. It's also well below the $18.88 an hour average wage for production workers in the durable goods industry.

The green jobs initiative gets even stickier when it comes to unions—a major supporter of the Obama administration and his fellow Democrats. GJF's report noted that very few workers at wind and solar jobs were backed by collective bargaining agreements. And in at least two cases, the company leaders were found to have run aggressive anti-union campaigns, aided by union-busting consultants.

Unions have been in the spotlight recently, most notably for their contribution—as their critics like to point out—to the demise of Detroit's Big Three. As lawmakers and business leaders across the country battle over the Employee Free Choice Act (which would make it easier to unionize workplaces), that fight is likely to get quite heated. But as money from the stimulus plans starts to make its way to the coffers of green companies, the importance of the union in the nation's manufacturing heartland will flare up once again.

Now, if the Obama administration decides to add stipulations to federal money, in effect, forcing green companies to accept unionization or implement wage requirements, then the political battle over the stimulus package will likely reach new levels. Forcing the nation's major companies to accept de facto unionization is not going to sit well with the business elite. But if the administration doesn't ensure that some of the new green manufacturing jobs help boost union membership, it may suffer a serious backlash from one of the biggest supporters of the Democratic Party.

The political battle aside, the economics behind green jobs may not be as enticing as they first appear. Advocates of green jobs often claim that what makes them so important is that they can't (or at least not without extreme difficulty) be outsourced. Unlike traditional manufacturing, many of the jobs in the green economy can't be shipped overseas. One reason is that some of the parts, like windmills, are simply too big and costly to ship. Other jobs, such as green construction and retrofitting, are—for obvious reasons—done by workers in America. Getting our current stock of laborers trained in green techniques will provide them with a different set of skills while creating a new, specialized work force—one that could become a global leader in the emerging green economy.

GJF rightly pointed out that green companies don't just play the free-market game; they often turn to the government for lucrative subsidies and enticing tax breaks. This is exactly why they're so excited about the stimulus plan. But if the government starts handing out money to green companies, should it also attach wage stipulations? That's what GJF recommends. What's funny is that if the government did apply a wage floor to any green subsidies, it would be doing the exact opposite of what it did with a number of the banks it bailed out. Free-market enthusiasts are likely to be up in arms. They'll say the government has no right to redistribute wealth. But when it's the one doling out the cash—maybe it does.

As another writer on Slate rightly pointed out, the government's claim that it will create millions of green jobs in the next two decades is dubious. Worse still is that even if the government did create these millions of jobs, it may inadvertently precipitate the declining stature of the nation's manufacturing and union base. The green companies that come to fill the void left by the departure of the traditional manufacturing heavyweights may be both anti-union and unexpectedly stingy. If the government is going to offer these companies the cash to stay competitive and create jobs, then it might want to first consider how good their jobs are going to be and how much they'll contribute to the American economy. If not, it may bring to life a nasty employment monster that will haunt it for years to come.

http://www.reuters.com/article/joeBiden/idUS384581032920090417?rpc=64