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Moving Toward a Green Economy

On January 5, NPR’s "Morning Edition" did a feature about a once-defunct Polaroid film factory in New Bedford, Massachusetts, that has reopened to manufacture solar panels. (I thank my friend Jeff Doshna for calling this story to my attention via Facebook.)

These panels are of a new type that you may not be familiar with. They are lightweight and flexible, so they can be attached to objects such as a briefcase to provide power that charges up a mobile phone inside. They can be fabricated in transparent form so they can be built into windowpanes.

The manufacturing company, Konarka, turn out sheets of this photovoltaic film by using the same machines that used to churn out big sheets of Polaroid film. About 20 of the workers who lost their jobs when Polaroid shut down this factory are now back at work in it.

The NPR story shifts from this particular factory to the larger issue of green jobs, mentioning that President Obama has set the goal of creating 5 million new green jobs over this decade. I was interested to read this discussion because I have written quite a lot about green jobs recently—for example, in 200 Best Jobs for Renewing America.

The NPR story gives considerable coverage to the opinions of Michael Levi, a senior fellow with the Council on Foreign Relations who is skeptical about the role that green jobs can play. I want to use today’s blog to rebut some of Mr. Levi’s points.

Mr. Levi observes that even if 5 million green jobs are created, "that can only be a very limited piece of the puzzle in a country of several hundred million people." I’d like to start by setting aside the children and retirees in the U.S. population and focusing on the actual wage-and-salary workforce, which numbered around 151 million in 2008 and is projected to grow to 166 million in 2018. The 5 million green jobs would represent close to 3 percent of the latter figure. That's a decent-sized industry, a bit smaller than all hospitals and a bit larger than all full-service restaurants. Another figure to consider is the 15 million who were unemployed in November 2009. If only half of the 5 million green jobs soaked up these unemployed people, the reduction in unemployment would be considerable.

Levi also notes when the government takes measures to create jobs in one part of the economy, this can result in job losses elsewhere. For example, when more electricity is generated from sun and wind, less will be generated from coal, meaning coal miners will be losing their jobs.

The main weakness of this argument is that labor economics has never been a zero-sum game. Job creation has multiplier effects that are difficult to predict and that can be very dramatic when new industries emerge. The outstanding example is the Internet, which started as a Department of Defense project and now has created thousands of jobs. Yes, the Internet has also eliminated some jobs at newspapers and record shops, but the balance tilts very heavily toward the number of jobs created. And the multiplier effect of job creation means that people in these new jobs can create, through their spending, jobs in many other industries. A communications technology such as the Internet also can create or preserve jobs in locations that used to be out of the economic mainstream.

Levi also points to the mushiness involved in defining green jobs. If an electrician who is already employed starts installing solar panels, does that count as a new green job? I don’t deny the mushiness of the definition, but the tally of green jobs—five million, three million, or seven million—doesn't really matter. In our present economy, job creation of any kind is what matters. The electricians who will vacate their existing jobs for solar installation work may not count toward the five million, but they will leave vacancies in other industries (such as construction) that new hires can fill. Government encouragement of green energy will create many job openings that are not considered green, but who has a problem with that?

And I haven’t even mentioned the benefits of a greener economy for our environment, for our balance of trade, and for safer workplaces. Yes, you can fall off a rooftop while installing a solar panel, but coal mining is a much riskier job.

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