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  • Lots of Green Jobs, but No Green in Their Wallets

    Will the Stimulus plan currently proposed by Congress actually create jobs? The short answer is no.

    The longer answer is the government cannot create jobs; the government can only transfer or redistribute jobs. As Heritage Senior Budget Analyst Brian Riedl says, “[B]efore the government can spend $1 billion hiring road builders and purchasing asphalt, it must first tax or borrow $1 billion from other sectors of the economy, which then lose a similar number of jobs.” Maybe if the money came from the Tooth Fairy or Santa, we’d have a viable plan, but it doesn’t. It comes from the taxpayers.

    So, the question now becomes: What kind of jobs does the stimulus “create”? The short answer is not good ones. Especially some of the green ones.

    A new report found that investing billions of dollars into renewable energy would result in green jobs paying below the national average:

    Green jobs are not automatically good jobs. Our survey results suggest that wind and solar manufacturing workers earn more than the typical employee at a Wal-Mart store, but it would be a stretch to say that all of them have good jobs.”

    And from Hill Briefs:

    The report singled out a case of a recycling firm in Los Angeles as an example of a ‘low-road’ workplace. Workers there get $8.25 an hour, say they do not receive pay increases or health insurance coverage, and do not feel comfortable talking to their bosses about their issues.”

    Furthermore, green jobs could also translate to gone jobs:

    The report noted that some U.S. wind and solar manufactures have moved production of components for the U.S. market to low-wage countries like China and Mexico.”

    The bottom line is this: To stimulate our economy, we’re not creating jobs, but instead displacing them with low-paying jobs that have a higher probability of being outsourced. And to make matters worse, powering down conventional sources of energy such as oil and coal to make room for subsidized and mandated renewable sources is a recipe for slower economic growth and ultimately higher unemployment.

    Fortunately, Senator Jim DeMint is offering a plan that will actually create jobs. (Notice the word create does not have scare quotes around it this time.) The two-step plan, adopted from the plan proposed by Heritage economists Bill Beach and J.D. Foster would 1.) Extend the 2001 and 2003 Tax Cuts at Least through 2013 and 2.) Reduce Marginal Tax Rates for Individuals and Businesses. According to Heritage’s Center for Data Analysis:

    Compared to the economy’s trajectory absent a stimulus policy, adopting the Heritage tax proposal would mean that 493,000 more Americans have jobs by the end of 2009, and, by the end of 2010, employment would increase by 1.3 million jobs.”

    More likely than not, these will be a range of high-paying jobs and low paying jobs but the takeaway is that they are legitimately new jobs in the American economy.

    Posted in Ongoing Priorities [slideshow_deploy]

    One Response to Lots of Green Jobs, but No Green in Their Wallets

    1. Tom Nally, New Orlea says:

      My view is that the government spending plan will actually destroy jobs in the net. This is because one dollar in the hands of the federal government has less buying power than the same dollar in the hands of the taxpayer from whom it was extracted.

      Let me try to put it a different way. It takes the federal government $1.25 to purchase the same amount of goods and services that can be purchased in the private sector for $1.00. This is because bureaucratic activity will eat a portion of every dollar without adding a commensurate amount of value. So, when $0.25 is lost billions and billions of times over, that represents hundreds of thousands of jobs that will never come into existence.

      A proper stimulus plan will not increase government spending. Rather, it will allow private entities to keep more of their earnings where it will be spent with greater efficiency.

      And if these private entities save it instead of spend it? That's equally good! Money never stops being productive, even when it is "saved". Dollars that are saved become capital for home loans, car loans, education loans or small business loans. All these activities create jobs, more than the federal government could ever create because of the federal government's capacity to degrade the purchasing power of dollars extracted from you.

      —Tom Nally, New Orleans

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