Jobs, Jobs, Jobs, and Blather

We are hot and heavy into election season, and there is a lot of buzz about “jobs.” We hear about job-killing regulations (mostly from Republicans) and the wonders of green jobs (mostly from Democrats). All this, of course, is aimed at tying favored policy options to something the average voter can understand, the need for gainful employment.

What are we to take from all of this? Is it more than predictable blather? The answers are probably “not much” and “no.” Despite all the tugging at the heartstrings, “job killing regulations” and “green jobs” appear to be propaganda terms, not anything anyone can chew upon for sustenance. It’s mostly just predictable political noise.

Let’s start with those job killers who write the regs in Washington. As noted in the New York Times in April when the Environmental Protection Agency issued its mercury rule for power plants last year, industry claimed it would cost 1.4 million jobs. Environmentalists backing the rule said it would create 1.4 million jobs. Neither figure has much basis in reality.

The Institute for Policy Integrity at New York University in the spring issued a report, “The Regulatory Red Herring, The Role of Job Impact Analyses in Environmental Policy Debates,” looking specifically at environmental rules and job creation, including the mercury rule. The analysis notes that neither the EPA nor the White House—specifically, the Office of Management and Budget’s Office of Information and Regulatory Affairs—ever makes claims about job benefits in calculations of the costs and benefits of new rules. 

Why not? Because there is simply no accepted methodology for making such estimates. When it comes to the impact of mercury control on the overall labor market, the coal industry’s guess is as good as that of the Natural Resources Defense Council. Or as bad.

The methods that various special interest groups use to come up with their job figures, says NYU’s Michael Livermore, principal author of the study, “do not lend themselves to the kinds of sweeping rhetorical statements you often hear in the political arena. Many times, claims about jobs and regulation find their way into a faulty conventional wisdom far removed from the evidence these analyses provide.” Part of the problem with job claims, says Livermore, is that the models used for the forecasts have unrevealed, and probably biased, assumptions. They are designed to produce pre-ordained outcomes. No peer review mechanism exists to scrub the models for bias and veracity, he told a telephonic press conference.

The U.S. economy and its labor markets are dynamic; defining a job lost versus a job gained is difficult. The NYU report notes, “In a dynamic economy, workers flow into and out of the stock of unemployed individuals…. Even during economic booms, unemployment exists. The unemployment rate during economic expansions is typically between five and six percent in the United States. Indeed, some temporary unemployment is part of a healthy economy, as new entrants join the workforce, individuals choose to exit current positions to seek different or better-paying work, and businesses shift their labor needs in response to market demands—all causing individuals to join the stock of unemployed people for at least short periods of time.”

“How do we think about layoffs and hiring?” asks Livermore. “If we have to hire a bunch of people to comply with a regulation, that’s a cost, not a benefit.” Social benefits for a regulation—the EPA’s claim for the Hg rule is $90 billion—if accurate, can swamp the costs, including job losses. So for those claims about “job-killing regulations,” disregard the noise.

As for regulations actually creating jobs—the environmentalists’ claim—NYU’s Livermore is also dismissive. The purpose of the rules, he says, is “saving lives and improving health.” It is not to create jobs; claims to that effect are also without much foundation.

And that brings us to “green jobs.” The popular media is full of the warm, fuzzy phrase. Forbes: “The Top 10 Cities for Green Jobs,” NPR: “Green Jobs Guru Back To Energize Progressive Base?” New York Times: “Number of Green Jobs Fails to Live Up to Promises.” In that context, a tweet recently passed across my computer screen, bragging that while solar power in Arizona still only provides a tiny amount of electricity for consumers in the state, it has added some 3,000 jobs to the economy. That strikes me as very inefficient, not a bragging point.

But what is a “green job”? The U.S. Department of Labor has a formal definition, which it came up with after Congress gave the DOL fiscal 2010 money to collect data on green jobs, without quite saying what constitutes one. The Bureau of Labor Statistics has concluded that green jobs are: “Jobs in businesses that produce goods or provide services that benefit the environment or conserve natural resources.” Or: “Jobs in which workers’ duties involve making their establishment’s production processes more environmentally friendly or use fewer natural resources.”

Does this definition really help you or me decide whether any particular job is green or, heaven forbid, not green? Not really. The BLS definition is so elastic—and in fairness, it’s hard to imagine that it could be otherwise—that definitional decisions could best be made by a coin flip. Coal truck driver? Not green? What if the coal truck is fueled by natural gas or runs on batteries?

Then there is the question of whether a green job is somehow better than a job that isn’t green but some other, less favored, color. The clear subtext of most of the coverage I’ve seen is that folks who hold down green jobs are somehow better or more worthy of respect than their peers with jobs of another sort. Try telling that to a coal miner.

On the New York Times “Bloggingheads” video discussion recently, Katherine Mangu-Ward of Reason magazine and Erica Grieder of The Economist discussed “whether green jobs are a scam.” Mangu-Ward noted, “Green jobs are more expensive, in part because green technologies are more expensive.” She said that the concept that it is useful “to spend more money per job and more money per light bulb is a little bit unclear to me. There might be better ways to spend that money.” 

Grieder concurred, noting that with “green” and “jobs,” one is presented with “two words, two goals, and they are not necessarily compatible.”  She said that the danger in framing investments in renewable technologies as “this is the solution to our jobs problem and our climate change problem and our broad energy problem is that you’re not really going to get that effect.” Green jobs? Scam, the two women concluded.

So when you hear partisans proclaim that their policies are creating, or will create jobs, and their opponents have killed, or will kill jobs, ignore the blather. Go about your job, whatever the color.

—Kennedy Maize is MANAGING POWER’s executive editor.