Good Green Jobs First!
One of the few bright spots in today's U.S. economy is the prospect of growing numbers of “green jobs,“ or those that create renewable energy, improve energy efficiency, and reduce greenhouse gas emissions and other forms of global warming air pollution.
Good Jobs First agrees with the nation's leading green jobs advocacy organizations, such as the Apollo Alliance, Green for All, and the Blue-Green Alliance, that the promise of millions of new jobs and a healthier planet deserves broad public support and smart taxpayer investments.
But we must also apply the lessons from the economic development accountability movement to ensure that those taxpayer investments create good jobs (not to mention transparency and clawbacks). If we simply “throw money at the problem” without proven safeguards, taxpayer support for green jobs will suffer the same fate as so many other programs enacted with good intentions (but weak rules).
As we lay out in other web pages in this section, that means using the leverage of taxpayer subsidies to ensure green jobs pay well, using Job Quality Standards and other proven policies.
Making Green Jobs Good Jobs
Our 2009 report High Road or Low Road: Job Quality in the New Green Economy examines the quality of jobs in green-building construction, waste recycling and the manufacture of renewable energy systems (wind and solar). Comparing high-road to low-road firms in each sector, we found that green jobs are not necessarily good jobs.
In fact, there are only two predictors of a good green job: if the job is unionized or if it is covered by a Job Quality Standard (that is, a state rule attached to an economic development subsidy; as a quid pro quo for the subsidy, the company must pay a certain wage—and sometimes benefit—level).
Teamsters recycling waste in San Francisco make a fair living, unlike their non-union counterparts in Sun Valley, California, who toil near minimum wage with no health insurance. Although few factories making windmills or solar panels have yet experienced union organizing drives, 80 percent of them are covered by state-mandated Job Quality Standards, requiring modest wage floors as high as $22 an hour.
One exemplary company, Gamesa, agreed to card-check neutrality with the United Steelworkers. However, other manufacturers have tapped low-wage offshore platforms for some production.
Federal, state and local governments all have proven policy levers to ensure green jobs really strengthen the economy, and the study lays out a policy menu that includes Project Labor Agreements, Buy American requirements, Job Quality Standards, and Community Benefits Agreements.
Green-Product Manufacturing Jobs: Promises and Perils
Green jobs hold the promise of revitalizing America's manufacturing base. The cases of renewable energy (wind and solar equipment) and transit equipment (buses and rail vehicles) illustrate both the potential and the pitfalls of hoped-for reindustrialization.
Because the United States does not have a national industrial policy, it lags behind other industrialized nations in the development of new green technologies such as renewable energy. It also has a transit-vehicle manufacturing sector heavily affected by imports and foreign direct investment because it has not sustained strong investments in public transportation
Solar and Wind Energy Equipment: Countries like Germany, Denmark, and Spain began investing in renewable energy much earlier than the U.S., and China, India and Brazil are aggressively catching up. As a result, wind and solar component manufacturing are very globalized industries and few of the biggest producers are U.S.-based.
The 2009 Recovery Act had several provisions that acted as “down payments” for U.S. jobs in renewables, however green jobs advocates say that the lack of comprehensive climate change legislation with long-term funding streams is deterring investment in wind and solar.
The Apollo Alliance and Good Jobs First examined 90 companies that received tax credits under one Recovery Act program to manufacture renewable equipment. We found a very mixed bag: some of the companies appear likely to grow in the U.S., but others may only create a small production presence here while mostly importing from offshore platforms.
Buses and Rail Transit Vehicles: The Apollo Alliance's Transportation Manufacturing Action Project (T-MAP) seeks to revitalize America's manufacturing heartland by strengthening and increasing domestic production of buses and rail vehicles to serve public transportation systems. In Make It In America, the Alliance lays out policy priorities to support domestic manufacturers.
In related studies, the Duke University Center on Globalization, Governance and Competitiveness traces and maps the U.S. supply chains for the production of buses and six different kinds of rail transit vehicles. It finds that some key components are only made offshore, suggesting opportunities to gain jobs by import substitution.
Surveying the industries of other nations, the Worldwatch Institute finds much stronger investments in public transportation driving job-rich manufacturing sectors. The Institute, together with Northeastern University and the Economic Policy Institute, project large gains in factory jobs if the United States substantially grew transit investments and ridership while supporting domestic manufacturing to capture the work.
(The plight of rail manufacturing jobs is hardly new; the last American-owned passenger railcar manufacturer, Pullman-Standard, closed its Illinois and Indiana factories in 1982, as documented in The Last Pullman Car.)
Attaching “Green Strings” to Job Subsidies
When we think “green” at Good Jobs First, we also think about money, i.e., the economic development subsidies that cost states and cities an estimated $70 billion a year. We urge states and cities to attach “green strings” to that money, to exercise their dormant power and leverage it for green jobs.
Put another way: let's not confine our thinking about green jobs to a few industries, and let's not limit public sector involvement to procurement and public buildings. Let's use economic development policy to green every workplace.
It's a logical extension of the “strings attached” frame that has so broadly influenced the economic development profession. As we've documented in several studies, accountability arguments are winning: more states and cities are disclosing company-specific deals online; more are attaching Job Quality Standards to subsidies; and more are attaching money-back guarantee Clawbacks.
Call this next frontier “Climate Quality Standards”—using the leverage of economic development subsidies to encourage companies to build and operate green, and to locate green (along public transportation corridors).
This is not an issue just for states and cities. In Uncle Sam's Rusty Toolkit, we document that five major federal economic development programs do nothing to make jobs accessible via public transit and almost nothing to promote green construction.
Locating Green: As Good Jobs First has documented in numerous studies, state rules that govern economic development subsidies are tragically disconnected from state transportation planning. As a result, only a handful of the 1,500+ state-enabled subsidy programs do anything intentional to create jobs at locations that are accessible by public transportation.
Instead, when we map subsidy deals, we find that they grossly favor sprawl: they are moving jobs away from people of color, concentrations of poverty, neighborhoods most affected by plant closings, areas with the poorest tax base—and away from public transit access.
This tragic disconnect means many workers who do not own cars are denied the chance to compete for jobs. Those low-income workers are disproportionately from communities of color. It also means many commuters of all income levels are denied a choice about how to get to work: they must drive.
Our solution: amend subsidy program rules to say: if a project is located in a metro area with public transportation, it must be located within a quarter-mile of a regularly served transit stop, and preferably closer. Otherwise, no subsidy. See the Policy Conclusion of our study The Geography of Incentives for a discussion of promising mini-developments in California, Illinois and Maryland.
Building and Operating Green: Good Jobs First recommends that states and cities amend their rules for commonly granted subsidies such as property tax abatements to say: to qualify for an abatement, the owner must build to the U.S. Green Building Council's Leadership in Environmental and Energy Design (LEED) standards, or rehabilitate it to LEED-EB (Existing Buildings) standards.
Similarly, states and cities could say: Any factory or warehouse owner seeking a tax credit must adopt best practices on reducing emissions and ensuring workplace safety.
Such rules would represent no corporate burden at all. In fact, they would save the companies money by reducing energy costs. For example, Harvard University set up a revolving loan to retrofit its campus buildings—and it returned 28 percent, far more than the University's famously successful endowment!
If rules such as these were phased in for existing subsidy recipients and required of new ones, most companies would respond positively, creating millions of new green jobs in construction, maintenance and operation. Less pollution plus more jobs—that's why even corporate groups such as CERES are publishing guides for corporate investors on how to actively encourage real estate companies to go green.
Using tax breaks as green leverage is a proven winner. In the late 1980s, Louisiana's visionary Department of Environmental Quality commissioner Dr. Paul Templet created an “environmental scorecard.” It said to the state's highly polluting petrochemical and paper industries: reduce your toxic emissions, use recycled materials, and resolve your disputes with the DEQ—or lose as much as half of your lucrative property tax abatement, a big hit for such capital-intensive facilities. The result: thousands of new construction jobs as the companies scrambled to install pollution-abatement equipment, plus a reduction in toxic emissions—a real boon for the state's notorious “Cancer Alley.”
For more on our Climate Quality Standards idea, see our article in Grist magazine.
Promoting Rehabilitation of Buildings: It is well established that the rehabilitation of older buildings not only saves a lot of energy, it's also labor-intensive. Some studies have also found that it produces strong local economic “ripple effects” by favoring more locally-sourced materials and local sub-contractors.
However, some states' building codes discourage rehab by mandating modern building standards—even for older buildings. In Breaking the Codes, Good Jobs First describes how a few states such as Massachusetts, New Jersey, North Carolina, Rhode Island and Maryland have amended their codes to encourage rehab.
Learn more about subsidy practices and controversial deals in this resource covering each of the 50 states and Washington, DC.
The first national compilation of company-specific information on economic development subsidy awards from around the country. Search the database here.