Obama’s green jobs bust
Last week’s underwhelming jobs report prompted the Obama administration to caution that one should “not read too much” into such numbers. One can sympathize with the administration’s statistical agnosticism. After all, with a record that includes 41 straight months of 8 percent or worse unemployment, Obama can’t credibly claim to have done much to spur job growth. Nowhere is that failure more resounding than with his signature job-creation program — so-called “green jobs.”
After touting green jobs as the wave of the future, the president and his Congressional allies made sure that the $800 billion stimulus package set aside $70 billion for green-energy projects. Now the results are in, and Obama’s green jobs bet has been a bust. Estimates from the National Renewable Energy Laboratory, an adjunct of the Department of Energy, show that of the nearly $9 billion that has so far been spent on green jobs, the government created just 910 new, long-term jobs. For those keeping count, that works out to a cost to taxpayers of $9.8 million per job. So dismal is the return on this investment that the Obama administration has taken to reclassifying jobs only tenuously associated with green projects — everything from construction jobs used to install infrastructure for wind and solar operations to janitors who clean those facilities — as “green jobs.”
As if Obama’s record on domestic job creation wasn’t sufficiently damning, much of the funding allocated for green jobs has gone abroad. American University’s Investigative Reporting Workshop points out that of the first $2 billion spent on renewable energy projects like wind energy companies, as much as 80 percent flowed overseas to places like China. By far the largest payment went to a bankrupt Australian company that used Japanese-made turbines to build a wind farm in Texas. The government spent yet another $20 million to “help clean energy projects in Africa get started.” Obama’s campaign likes to mock Mitt Romney as an “outsourcer-in-chief,” but its green jobs scheme seems to be primarily effective in transferring American money into foreign projects. Democratic Senator Chuck Schumer — hardly an anti-Obama partisan — aptly sums up the administration’s dubious achievement: “Very few jobs here, lots of jobs in China.”
Considering the abject and expensive failure of green jobs, one might well wonder how this pet cause of the environmental left became national policy. As we show in our new book, The New Leviathan, it is certainly not because the economic arguments for green jobs are so compelling. Despite the promise attributed to green jobs by Obama, they have a mythic basis, namely that government can “create” jobs using regulatory fiat by subsidizing innovations — in this case non-fossil-fuel energy and energy-efficient technologies — for which there is not yet sufficient demand in the free market. The paucity of demand can be explained by the fact that green energy sources remain far less efficient and far more expensive than fossil fuels.
Green jobs are also economically counterproductive, destroying jobs in the private sector. This is because in order to make the green energy industry competitive, government must subsidize it and tax consumers and businesses to do so — just as it did with the economic stimulus. But in favoring green industries, government diverts labor, capital, and materials from economically efficient and productive industries. The experience of European countries with green jobs is instructive. Spain’s subsidies of renewable energy have led to the destruction of two private-sector jobs for every “green job” the government creates. In Italy, green jobs were so expensive that for every green job created, five to seven were lost in the general economy. America’s experiment with green jobs is turning out to be similarly disappointing.
The government’s support for green jobs thus has less to do with the rationale behind these programs than with the political influence of the groups that support them. As we point out in The New Leviathan, despite being inefficient and economically damaging, the green jobs campaign has found a powerful constituency in the United States: an alliance of environmental groups and government labor unions. While they may not seem like obvious allies, green jobs provide a powerful common cause. Environmental groups hope to win government funding for the green causes they have long championed, while unions know that a massive new government-subsidized green industry would open the door to more government unionization. Allied through mutual convenience, these groups have formed influential coalitions to push green jobs into the political arena.
One such coalition is the Blue Green Alliance. Launched in 2006 by the United Steelworkers and the Sierra Club, the 14 million-member coalition includes leading environmental groups like the Natural Resources Defense Council and the National Wildlife Federation, and 10 of the country’s largest government unions, among them the Service Employees International Union (SEIU), the Communications Workers of America, the American Federation of Teachers, the United Auto Workers, the United Food and Commercial Workers, and the Sheet Metal Workers’ International Association. In 2009 the Blue Green Alliance spent $1.5 million lobbying for agendas like green jobs, a figure that surged to almost $2.5 million in 2010. Thanks to such lobbying efforts, what might have remained a marginal cause was thrust into the mainstream.
The advocacy campaign for green jobs resonated with the Obama administration thanks to another group that linked the green jobs agenda of the environmental movement with the Obama White House. In 2007, environmental activist and self-described communist Anthony “Van” Jones founded the Oakland, California-based Green for All. Supported by mega-rich funders like the Ford Foundation and the Rockefeller Family Fund, and by environmental groups like the Natural Resources Defense Council, the group lobbied to “build an inclusive green economy strong enough to lift people out of poverty” by “creating millions of quality jobs and careers.”
For Democrats at least, that sales pitch proved seductive. Green for All’s lobbying efforts had a decisive impact on environmental policy as soon as the Democratic Party achieved control of the U.S. Senate and House in the elections of 2006. The following year, Green for All helped to pass the Green Jobs Act, which authorized $125 million annually to train workers for employment in a variety of so-called green industries. The group’s next major coup came in March 2009, when President Obama brought Van Jones into the White House and made him his “green jobs czar.”
Because of his extreme views, which he was careful to cloak, Van Jones’s tenure at the White House proved controversial and short-lived. But he left a permanent mark on the U.S. economy when the Obama administration and Congressional Democrats muscled through the stimulus bill, and with it the $70 billion taxpayer subsidies to create the green economy and green jobs whose virtues Van Jones had preached. Unfortunately, as the latest jobs numbers attest, the payoff for that ideology-driven investment remains as elusive as ever.
David Horowitz and Jacob Laksin are the authors of The New Leviathan: How the Left-Wing Money-Machine Shapes American Politics and Threatens America’s Future (Crown Forum).