The Pitfalls in Job Counting ("Green" jobs versus economic jobs)
It’s understandable that this happens during a recession, but nonetheless a very bad trend in policy analysis is the narrowminded focus on jobs per se. Thus the ~$800 billion spending package is evaluated according to how many jobs it will create or save, rather than according to its promotion of efficient resource allocation.
This focus on employment for its own sake is most evident in the “green jobs” rhetoric. There are two major problems with the typical claims in this area. First, advocates will offer statistics showing that a tax on fossil fuels coupled with, say, subsidies to wind power will create jobs on net, because it takes more people to produce a given amount of electricity through wind than through coal.
But far from being an advantage, this is prima facie evidence against the use of wind power. (The correct criterion, of course, is total cost, including capital and labor.) We want to get as many kilowatt-hours as possible from a given amount of resources. The goal of the electricity sector isn’t to employ workers, it’s to power homes and businesses. If Martians showed up and offered to beam unlimited amounts of electricity to every building on the planet as a token of goodwill, that would be fantastic. But I suspect some energy “experts” would warn that this would throw the world into a catastrophic depression because of all the unemployed workers.
Besides its misguided elevation of workers over consumers, the typical rhetoric on green jobs often uses very expansive definitions to generate optimistic projections. For example, Roger Pielke links to a Christian Science Monitor analysis of such chicanery:
Earlier this week, Fortune’s eco-blog, Green Wombat, ran a story under the headline, “Wind jobs outstrip the coal industry.”
Blogger Todd Woody cites [a] new report from the American Wind Energy Association that about 85,000 people are now employed by the wind power industry, up from 50,000 a year ago. Mr. Woody then says that “the coal industry employs about 81,000 workers,” citing a 2007 report from the Department of Energy.
…But it’s a bogus comparison. According to the wind energy report, those 85,000 jobs in wind power are as “varied as turbine component manufacturing, construction and installation of wind turbines, wind turbine operations and maintenance, legal and marketing services, and more.” The 81,000 coal jobs counted by the Department of Energy are only miners. Their figure excludes those who haul the coal around the country, as well as those who work in coal power plants.
To be fair, Woody…does say that “[t]he wind industry now employs more people than coal mining in the United States.” But his story then immediately abandons this distinction, and then goes on to characterize those 81,000 jobs as comprising the total employment of the coal industry.
These are just two of the problems with the “green jobs” rhetoric. Another flaw is that such analyses often assume that unemployed workers will stay idle indefinitely, if not for government spending programs. For a full critique of the most popular green jobs studies, see my paper with Robert Michaels.