The dangers of promising a green jobs boom

Hello Swampians, I’m Sarah O’Connor, filling in for Rana Foroohar for the next few weeks from my outpost in London. 

My exchange with Gideon Rachman about climate change last week got me thinking about the problem facing democratically elected politicians everywhere: how to sell some of the painful measures that will be necessary to avert environmental catastrophe.

In the UK, Boris Johnson (who even his admirers wouldn’t call a conviction politician) is already backtracking on plans to ban the sale of new gas boilers from the mid-2030s because the move would be costly for consumers.

In the US, President Joe Biden usually stresses the benefits of combating climate change over the costs. Here’s what he said earlier this month, for example, at a White House event on electric cars:

“When I hear ‘climate’, I think ‘jobs’ — good-paying union jobs . . . If we act to save the planet, we can also come out of it better. We can create millions of good-paying jobs that generate significant economic growth and opportunity, to raise the standard of living for people not only here, but around the world.”

I can see why it’s smart politics to promise a green jobs boom. But I wonder if it’s also a risk. If those jobs don’t materialise, or they’re insufficient in quantity or quality to replace the jobs that will be lost in carbon-heavy sectors, the result could be a “betrayal” narrative that turns nasty.

So what are the prospects for green job creation? I was struck by this piece in The New York Times last month which argued the green economy was “shaping up to look less like the industrial workplace that lifted workers into the middle class in the 20th century than something more akin to an Amazon warehouse or a fleet of Uber drivers: gruelling work schedules, few unions, middling wages and limited benefits”.

As a reporter who’s spent a fair bit of time with Amazon warehouse workers and Uber drivers, I think that assessment is a bit harsh. Data from the latest US Energy and Employment Report show median hourly wages in the solar and wind industries are about $24 and $26 respectively, roughly a third higher than the national median wage. That said, they pay substantially less than jobs in fossil fuel sectors, and their unionisation rates are lower too. That should hardly be a surprise. Nascent industries such as solar energy are developing in an era where unions are hugely diminished in scale and influence. But Biden is the most pro-union US president in decades: it will be interesting to see which levers he can pull to fulfil his promise that these will be “good paying union jobs”.

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It’s not just a question for the US, of course. Over here in the UK, the wind industry is developing fast on the north-east coast of England, an area that has struggled since the decline of heavy industry and fishing. Siemens Gamesa has just announced an expansion to its wind turbine manufacturing plant in Hull, while the fishing town of Grimsby plays host to the Danish wind company Orsted’s operations and maintenance centre. The problem is, sectors such as wind just aren’t very labour intensive once up and running compared with extracting and processing fossil fuels. In September last year more than 1,200 people applied for 23 wind turbine technician roles in Grimsby. Even so, I think there’s a wider benefit that comes from feeling that your community has an important role to play in the 21st-century economy.

Ed, you’ve written some of the best journalism I’ve read on the crisis in middle-class America. Do you think green jobs could be part of the solution? Or is Biden promising too much?

Rana Foroohar is on leave and will return in September. 

Recommended reading

• The pandemic has apparently changed the way we want our bodies, our clothes and our homes to smell, according to the FT’s Sam Jones, who has been to visit the “Silicon Valley of smell” in Switzerland. Fruity scents are out, rubbing alcohol is in.

• I’m sceptical that inflation is about to become a problem, but it’s always worth reading smart people who disagree with you, as our economics editor Chris Giles does here.

• I enjoyed this attempt in The Conversation to rehabilitate the Luddites, which argues they weren’t the ignoramuses we now think they were.

Catch up on previous Swamp Notes on FT.com.

Edward Luce responds

Sarah, you pose a great question to which I only have partial answers. My main one is that the value attached to any kind of job — whether it be green collar or blue — is as much about politics as it is about economics. This is something you have written about very persuasively in relation to the gig economy.

There are several things that Biden could do to ensure green energy jobs are more secure and better rewarded. These include making it easier to form a union, passing a $15 federal minimum wage, and investing in the alternative energy networks that would crowd in private investment. Of these, only the latter seems likely to get through Congress. Then there are one or two things he ought to do that he has promised not to do — most importantly to pass a federal carbon tax. Ostensibly a carbon tax, or a decision to lift the long-frozen petrol tax, would break Biden’s pledge not to raise taxes on the middle class. But there are ways around this that Biden has not yet started to explore. 

One such idea, the carbon dividend, would rebate the proceeds of the fossil fuel tax to households. This could be a straight cheque to every citizen, as happens in Alaska with its annual oil check to households. Or the dividend could be targeted at lower tax brackets, which would make it more progressive. Either way, it is an ingenious idea since it would be revenue neutral and based on sound conservative principles. I continue to wait in vain for this kind of innovative thinking from Biden. Once people had become accustomed to direct transfers, they would start to associate green energy with money in their pockets. That would help assuage the other problem you identified, which is the probable lack of mass-scale energy employment. 

I fear there is nothing equivalent on the solar installation horizon, or in wind turbine manufacturing, that could match the waning volume of employment in the traditional industrial economy. The more the US drives towards a green energy future, the more jobs there will be. But they will be discreet, multifarious and mostly skilled. Biden is smart to sell green energy as a middle class employment opportunity. But he needs policies that are equal to the cleverness of his politics. As things stand, it is hard to see the fight against global warming as a magic wand for America’s middle income woes. 

Your feedback

And now a word from our Swampians . . .

In response to ‘Talking about my generation’:
“It’s not about going from growth to no growth or ‘degrowth.’ It is about changing the definition of growth. Because we cannot give up growing, and competing. We will not change human beings. But we can change how they think. Anyone who has been on a diet knows how it works: it is about moving away from the satisfaction of eating to the satisfaction of eating healthily. In both case we are talking about satisfaction maximisation. It is just another way to reach satiation — a healthy way vs. an unhealthy way . . . Any attempt to go against human nature is bound to fail — the idea is to use these instincts to achieve a sustainable outcome.” — Laurent Bouvier, London, England

In response to ‘Which political systems or leaders have best managed the pandemic?’:
“On Covid, I suppose it’s worthwhile to compare and contrast the response of various governments and see what has worked best. Taiwan stands out, but in general I’m slowly coming around to the idea that this was an ‘Act of God’ or biological disaster that would have been beyond the power of any politician or regime to deal with. I get the understandable impulse to ascribe blame (especially with the benefit of hindsight), but maybe there are just limits to what we can do. Nobody comes out looking smart — neither Chinese communists, nor Swedes, nor Australians, nor Californians, nor Texans, nor New Yorkers, nor Floridians. Scoring points might make sense politically, but in reality it seems more like different factions in Florence blaming each other for plague deaths instead of blaming the plague itself.” — Marshall Auerback, New York, New York

Catch up on previous Swamp Notes on FT.com.