Where are All the Green Jobs?

By Matt Baker

In the last decade, green jobs have been viewed as a panacea for this country’s ails. They have the power not only to curb climate change and shrink the amount of foreign fuel imported into the United States, but to create jobs that might not otherwise exist. And of course, all of these benefits are also the first lines of defense for national security.

Ever since the 2008 recession, the clamor for green jobs has grown to a cacophony from some corners. Republicans and Democrats can continue to debate the merits of using public funds to jumpstart this sector; but both sides agree that the birth of a new industry to replace the jobs we are currently hemorrhaging would be a very good thing.

Yet, the green collar industry remains an enigma. Jobs related to environmental aims already pervade every sector of the economy. “Green jobs” remain tricky to isolate, define and count. The clean economy has remained elusive in part because, in the absence of standard definitions and data, strikingly little is known about its nature, size and growth at regional and national levels.

Seeking to address these problems, the Brookings Institution, a think tank headquartered in Washington, D.C., collaborated with Columbus, OH-based research and development firm Battelle to develop and analyze a database of clean economy employment statistics for the United States and its metropolitan areas.

The data in the report shows statistics for green jobs in 2009 and 2010. While this is a small sample size, it is a snapshot of the U.S. economy at one of its most tumultuous times, and reveals much about the standing of green jobs in the aggregate job market. Just as importantly, however, it provides a baseline from which the shrinkage or, hopefully, growth, of green jobs can be measured going forward.

So how do you define the clean economy? One cannot pour all the nation’s jobs into a sieve and pick out the green ones. The Brookings report sought to identify companies and establishments—and the jobs associated with them—that produce goods and services with an environmental benefit or that add environmental value to products. The report specifically did not attempt to measure jobs conducted in an environmentally-friendly manner, however valuable these activities are.

But even this could be too muddled. Consider a company that constructs wind turbines; unambiguously part of the clean economy, right? But what of supporting organizations that supply parts or services to those clean producers? In this study, if a supplier provides products that are used across industries and purposes (e.g. screws, computer equipment or accounting), that company’s jobs are not considered part of the clean economy.

The report concluded that the clean economy last year accounted for 2.7 million jobs nationwide, or 2% of the U.S. economy as a whole. While this is by no means a substantial share of the workforce (contrast with healthcare, the nation’s largest source of employment, which employs 13.8 million jobs and comprises more than 10% of the economy), green jobs surprisingly surpass other industries, such as fossil fuel production’s 2.4 million jobs.

Overall, more than half a million green jobs were created between 2003 and 2010, expanding at an annual rate of 3.4%, which lagged behind the national economy, growing at 4.2% annually over the same period. However, at the height of the recession—from 2008 to 2009—green jobs grew faster than the rest of the economy, expanding at a rate of 8.3%. The American Recovery and Reinvestment Act (ARRA), which funneled public funds toward clean energy projects, is likely the primary reason for that surge.

Illinois ranked fifth overall of the states and the District of Columbia in terms of the size of its clean economy with over 106,000 jobs. Only Pennsylvania, Texas, New York and California outperformed, with the latter totaling more than 318,000 jobs in 2010, far ahead of the next state.

The fastest-growing segments of Illinois’ green economy between 2003 and 2010 were solar thermal and wind technology, both of which nearly doubled in size. The state’s green jobs also pay better, with an average annual wage of $41,357 compared to the $40,057 average salary that a traditional job will demand in Illinois.

Chicago shined a little brighter among the nation’s 100 largest metropolitan areas. Chicago’s 79,000+ green jobs represent three quarters of the green jobs in Illinois and propelled the region to third overall behind Los Angeles and New York.

Mass transit and waste management, with 28,000 and 16,000 jobs respectively, represented the largest industries in Chicago’s clean economy. However, manufacturing and innovation certainly play significant roles. The Brookings report highlighted Invenergy, Siemens and U.S. Gypsum as some of the large employers in the regional green market.

In the national economy, only 9% of all jobs are manufacturing, indicative of the decades-long process of outsourcing jobs to cheap labor markets across the globe. Approximately 26% of clean economy jobs, by contrast, are engaged in manufacturing everything from house paint to wind turbine blades. If clean manufacturing jobs continue to grow in the U.S., they will supply opportunities for millions of out-of-work blue collar workers who continue to lose jobs to foreign markets even in excellent economic times.

So how can we encourage the future growth of the green economy? The report points to several paths for success.

From 2003 to 2010, the study found, companies located in regions containing a significant number of jobs in the same industry grew more quickly than more isolated firms. Companies in these “clusters” created jobs 1.4% faster each year than more isolated establishments. Examples include the solar photovoltaic industry in Los Angeles, fuel cells in Boston and wind technology in Chicago.

But how do we use this information? How can the U.S. expand its clean economy, and thereby the national economy as a whole? The answer—financing—is both obvious and troublesome. A nation crawling out of a debilitating recession and that recently found itself on the cusp of default would hardly seem robust enough to pour money into this problem.

But that doesn’t mean the stakes aren’t already too high. Market volatility is weakening demand for sustainable goods and services, scaring away financiers and calling into question the nation’s standing as a producer and innovator of green technologies. This leads to a situation where other nations—notably China—can step in and take that leadership away from the U.S. As the clean economy is poised to explode, this isn’t an opportunity that the nation can ignore.

“While private enterprise ultimately will deliver a robust clean economy,” the authors of the report declare, “federal, state and local governments all have roles to play in co-producing a clear, supportive and stable growth environment for it.” The key term here is “co-producing.” Congress has been debating the merits of using public funds or market pressure to fix the ailing economy as if the two were mutually exclusive. We must traverse both paths.

For example, the Brookings report suggests that Congress create an entity to fund emerging technologies to bridge the valley between research and commercialization. States can supplement private lending with participating loans or capital for revolving loan funds that target clean economy projects. These actions would supply private industry the fortitude necessary to engage in cleaner projects. Smaller municipalities can also help reduce uncertainty with programs such as Chicago’s Green Permit Program which expedite or even pre-approve sustainable projects.

The report suggests that state and regional policymakers continue or intensify green procurement efforts. This is money that governments would be spending regardless, so why not simultaneously invest in cleaner programs? Contrary to common belief, “greener” does not always mean “more expensive.” Even when upfront prices are higher, green products often have cost benefits built into their life spans. More than perhaps any other entity, governments have the staying power to realize those benefits multiple times over.

As the nation treats its wounds from the 2008 recession, the search continues for new sources of growth. As this report shows, the diverse green industry not only grew in the last few years, it is entrenched in key private-sector areas such as manufacturing, finance and information technology that are essential in any national market rebound. Only with smart policy support, however, can the U.S. revamp its economy and put its people back to work.

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