Nimble government, job creating machine

by Russ Roberts on August 21, 2011

in Environment, Stimulus, Subsidies

The New York Times reports that green technology might not be the job creation engine some have claimed it to be:

In the Bay Area as in much of the country, the green economy is not proving to be the job-creation engine that many politicians envisioned. President Obama once pledged to create five million green jobs over 10 years. Gov. Jerry Brown promised 500,000 clean-technology jobs statewide by the end of the decade. But the results so far suggest such numbers are a pipe dream.

“I won’t say I’m not frustrated,” said Van Jones, an Oakland activist who served briefly as Mr. Obama’s green-jobs czar before resigning under fire after conservative critics said he had signed a petition accusing the Bush administration of deliberately allowing the Sept. 11 terrorist attacks, a claim Mr. Jones denies.

A study released in July by the non-partisan Brookings Institution found clean-technology jobs accounted for just 2 percent of employment nationwide and only slightly more — 2.2 percent — in Silicon Valley. Rather than adding jobs, the study found, the sector actually lost 492 positions from 2003 to 2010 in the South Bay, where the unemployment rate in June was 10.5 percent.

Federal and state efforts to stimulate creation of green jobs have largely failed, government records show. Two years after it was awarded $186 million in federal stimulus money to weatherize drafty homes, California has spent only a little over half that sum and has so far created the equivalent of just 538 full-time jobs in the last quarter, according to the State Department of Community Services and Development.

The weatherization program was initially delayed for seven months while the federal Department of Labor determined prevailing wage standards for the industry. Even after that issue was resolved, the program never really caught on as homeowners balked at the upfront costs.

“Companies and public policy officials really overestimated how much consumers care about energy efficiency,” said Sheeraz Haji, chief executive of the Cleantech Group, a market research firm. “People care about their wallet and the comfort of their home, but it’s not a sexy thing.”

Ah, seven (!) months to determine “prevailing wage standards” in the industry. No hurry. And even then they couldn’t spend the money because consumers, even at subsidized prices, didn’t like the program.

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{ 17 comments }

Sam Grove August 21, 2011 at 3:07 pm

Care to edit the first sentence?

The New York Times reports that green technology might be the job creation engine some have claimed it to be:

Russ Roberts August 21, 2011 at 4:02 pm

Fixed it. Thanks.

Thomas A. Coss August 21, 2011 at 3:57 pm

Unicorns and Green Jobs,
I don’t doubt for a minute that Unicorns posses amazing magical powers and I’m not especially discomforted by those who believe in them, still no one has ever seen one. The vision of plenty of green jobs fits nicely right next to luscious green pastures of Unicorns, awaited for by the same people. I wish them well.

Ike August 22, 2011 at 12:22 pm

Unicorns flatulence is our best hope for 100-percent green energy, because unicorns toot rainbows.

Greg Webb August 21, 2011 at 4:29 pm

I wonder if the political elite will learn from their recent mistakes and will quit pretending at knowledge so they won’t waste future taxpayer money on things that consumers do not want. Not a chance! Next time, they will be just as certain that they are right as they were the last time..

SweetLiberty August 21, 2011 at 5:06 pm

Clearly, the solution is the government just hasn’t spent enough money yet on these green programs! If something doesn’t work, throw more money at it. Basic political economics 101! (And you call yourself an economics professor).

Chucklehead August 21, 2011 at 8:03 pm

“I have never yet known anybody trying to defend a government program who didn’t say that all it’s evils came from the fact that it wasn’t big enough.” Milton Friedman

robert_o August 21, 2011 at 5:11 pm

The problem is that the “green” technologies that were funded weren’t green enough. If the various governments had simply funded greener tech, we’d see the expected jobs come about.

Warren Bonesteel August 21, 2011 at 5:18 pm

The program in question involved asking the consumer to take on more debt.

It’s pretty hard to borrow aganst the equity in your home when you’re underwater to begin with, if you were fool enough to try..

kyle8 August 21, 2011 at 5:34 pm

No, clearly it was the fault of the greedy Banks and the fatcats that got all their taxes given back to them by the Bush tax cuts that Obama continued, Oh ! Wait ! I was suppose to forget that last part.

Harold Cockerill August 22, 2011 at 7:24 pm

“got all their taxes given back to them”. Care to venture a guess at the percentage of income taxes paid by the top five percent of taxpayers? For some reason I don’t think you care how much they actually pay. You want all their money and you would probably be happy to see them marched into the street and shot.

Craig August 21, 2011 at 8:35 pm

Even if you’re a nasty Keynesian, you’d have to admit that government-sponsored weatherization programs of this sort will do nothing but take work away from all the unemployed carpenters who already know how to do it.

John Papola August 21, 2011 at 10:25 pm

“prevailing wage standards”? How can anyone capable of using a calculator possibly believe that such an organization is capable of creating sustainable, productive job opportunities. The best wage is the lowest wage you can get someone to take that makes them happy to have the job and willing to do their best. Period.

The government should be forbidden from working with any private contractors of any kind or providing subsidies to any firm. Let the people see just how full pathetic this brutish beast of an organization really is when it can’t lean on the crunch of firms who may have the chance to practice being competent for voluntary customers.

Chucklehead August 22, 2011 at 12:19 pm

“Let the people see just how full pathetic this brutish beast of an organization really is when it can’t lean on the crunch of firms who may have the chance to practice being competent for voluntary customers.”
Interesting back door approach to limited government.

Rich Berger August 22, 2011 at 7:22 am

“Van Jones, an Oakland activist who served briefly as Mr. Obama’s green-jobs czar before resigning under fire after conservative critics said he had signed a petition accusing the Bush administration of deliberately allowing the Sept. 11 terrorist attacks, a claim Mr. Jones denies.”

Note that the fact that he signed the petition is not in doubt. He eventually admitted it, but claimed he did not agree with the ideas expressed in it. I guess the Times’ readers are too sensitive about such things to be told the truth.

paulroscelli August 22, 2011 at 7:26 pm

From the article: Two years after it was awarded $186 million in federal stimulus money to weatherize drafty homes, California has spent only a little over half that sum and has so far created the equivalent of just 538 –

That’s what? About 350K per job?! Oh wait, since they’ve only spent half it’s more like $175K–oh that’s better.

Harold Cockerill August 22, 2011 at 7:31 pm

So they created 538 full time jobs at a cost per job of over $172,000. That’s $172K that was borrowed and will have to be paid back. For EACH job!

The real green jobs being created are positions for thieves to take our money.

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