Green Jobs and Market Meddling Will Not Work
Kenneth P. Green
The Obama administration and its congressional allies have been promising to usher in a green economy that will create millions of new green jobs that "can't be outsourced." Many of those jobs, we're told, will come from wind and solar energy development, but other areas are supposed to benefit as well, including the automobile, construction, and ill-defined "green technology" sectors. These claims are nothing new, though they have grown more Orwellian over time. In the 1990s,
There's only one problem with all this feel-good blather: It makes no economic sense whatsoever, and where it has been tried most extensively, evidence shows that it's a job-destroying, economy-weakening fiasco.
First, Economics 101.
What we know, from the fundamentals of economics, is that governments don't "create" jobs; consumer demand for goods and services does that. All the government can do is subsidize some industries while jacking up costs for others. In the green case, it will be destroying jobs in the conventional energy sector, and most likely in other industrial sectors, through taxes and subsidies to new green companies that will use taxpayer dollars to undercut the competition. The subsidized jobs that will be "created" are, by definition, less efficient uses of capital than market-created jobs. That means they are less economically productive than the jobs they displace and contribute less to economic growth. Finally, the good produced by government- favored jobs is inherently a noneconomic good that has to be maintained indefinitely, often without an economic revenue model, as in the case of roads, rail systems, mass transit, and probably windmills, solar power installations, etc.
Now to the empirical evidence.
When talking about our bold green energy future, President Obama held up
Green jobs are costly.
Each job created in
And the goods produced (wind and solar power plants in this case) jack up energy prices dramatically and cause more job losses throughout the economy. Electricity rates in
Finally, the Spanish team found that "the high cost of electricity due to the green job policy tends to drive the relatively most [sic] energy-intensive companies and industries away, seeking areas where costs are lower."
As for the nonexportability of green jobs,
The bottom line:
Government job creation, green or otherwise, is private-sector job destruction. In the end, there are fewer net jobs and less net economic productivity than if the government had not interfered with the market.
Available at Amazon.com:
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- Surviving the American Economic Makeover
- What the Economic Bust Left Behind
- Tough Economic Times Molding Tough Consumers
- Careful Planning and Discipline Can Pull Consumers Out of Debt
- Green Jobs Can Spur Economic Recovery
- Green Jobs and Market Meddling Will Not Work
- Obama's Mixed Economic Signals Won't Create Jobs
Green Jobs and Market Meddling Will Not Work | Kenneth P. Green
(c) 2010 Philip Moeller