The Problem With “Green” Jobs
Say it with me:
You can’t get something for nothing.
It doesn’t matter what that something is - you can’t get it without some effort, without some cost. It’s impossible. This brings me to the fiction that government can “create jobs”, especially “green” jobs.
News organizations have been hyping the possibility that Nevada can “create green jobs” for months now. The Las Vegas Sun had an article in September that said:
A new report from the Center for American Progress says $100 billion in green investment could create 2 million jobs in the U.S., including 15,000 in Nevada.
“In a time when people are hurting, 15,000 jobs seems like a good idea,” said Scot Rutledge of the Nevada Conservation League.
The $100 billion “green economic recovery program” [Remember when that was a lot of money? - DC]- about the size of the recent federal stimulus package - could be paid for by auctioning the right to emit the greenhouse gas carbon dioxide, according to the center.
The report says $865 million of that $100 billion would be invested in Nevada. That figure is based on contribution to gross domestic product and population. When natural renewable energy resources and existing favorable state policy toward renewables are factored in, environmentalist said, the investment here is likely to be much higher.
Meanwhile, our legislators talk of using our share of the “bailout money” to create “green jobs”:
Saying the future of Nevada’s economy depends on building a thriving renewable energy industry, Senate Majority Leader Steven Horsford, D-Las Vegas, introduced legislation to use Nevada’s share of the economic stimulus package to create a “green jobs” training program.
Horsford’s bill, SB 152, would fund both the programs to train the workers and the weatherization projects to put them to work making schools and other government buildings more energy efficient.
Naturally, some business leaders are for it, too:
Business leaders involved in green energy projects met in Reno Thursday to express their happiness with the new stimulus law.
If you’re tired of hearing about green energy and not seeing much of it, they’re right there with you. “We’re trying to push things forward; we’re trying to make things actually happen in a very rapid fashion to build a green economy here in Nevada.”
Rich Hamilton and his company, Great Basin Wind are the ones behind the planned Virginia City wind farm. The much talked-about project is slated to be finished late next year with up to 71 turbines cranking out 200-megawatts enough to power about 60,000 homes.
His company can afford to invest in the project thanks in part to tax incentives offered by the federal government. The stimulus extends those: “We are providing many tax incentives for the private sector to build renewable energy projects.”
It all sounds so good, doesn’t it? It sounds so pretty - we give some companies some money, they build some windmills, and we all go home happy, with new jobs in construction and maintenance of this stuff carrying us through an otherwise turbulent and messy economy.
There’s just one problem, though, isn’t there? Where is the money coming from?
That question is at the very core of why government “created” jobs are a myth. Government creates very little of actual value, meaning that there is very little that government creates that people happily and gladly fork over money for. By and large, government is funded by taxes, which is the act taking money from someone now, or loans, which is simply promising to take money from someone else later. Of course, in order to take money from someone, there has to be money to take to begin with. The way government creates jobs, meanwhile, is by taking the money that it took from someone in the form of taxes or loans and redistributing it to someone else that it thinks will spend the money more wisely. Again, though, in order for the government to have any money to take to begin with, there has to be some money to take - consequently, the government will either be taking money from someone that’s already providing jobs (businesses and/or their owners) or from someone that already has a job (everyone else). So, at best, one of two things is happening:
- The government is transferring money from one business that’s successfully creating jobs, hindering their ability to provide jobs themselves, or…
- The government is transferring money from you, making your wages worth just a little bit less, with the hope that there are enough people like you to take money from and give to someone else so they can be put to work.
Let’s play with the first option since it’s the simplest to grasp, and fold the second option into it. Under the absolute best of circumstances, assuming various physical rules don’t apply, since it’s physically impossible for government to create anything of value or wealth, the best that can be hoped for is that government will transfer jobs from one business to another, “better” business, at a 1-to-1 ratio, total wages-wise. In other words, we hope that, if the government takes $100,000 from one business, it’s able to create $100,000 worth of jobs in another business. There’s no way for government to add to that $100,000 without taking it from someone else, so there’s no way to multiply this.
Trouble is, this fictional fantasy land doesn’t exist.
To start with, the laws of time still apply in our world, which means that, if government takes $100,000 from one entity to give to another entity, there will be a period of time during which the government will have that $100,000, during which time that money isn’t being put to productive use by anyone. In short, it’s been effectively removed from the system until the government is ready to hand it out again. This brings us to our next problem - presumably, somebody is getting paid to account for all of this. Somebody is getting paid to collect the $100,000 check from one entity and somebody is getting paid to write a check to the other entity. Suddenly, the government doesn’t have $100,000 to hand out anymore - at best, it might have $90,000, or maybe $95,000. It really doesn’t matter how much money is left, though - the important thing to remember is that some of that money is now gone from either productive enterprise, never to return. In other words, there’s friction in the system, which makes sense since, no matter what you move, whether it’s money or blocks of wood or whatever, there is always going to be friction. Always. We’re talking “laws of physics” here.
So, right off the bat, we took $100,000 that somebody could use to create jobs or, alternatively, use to buy products from companies that create jobs or just build up a nest egg so we don’t need to pay them unemployment when the unfortunate happens and, assuming there’s no graft, no corruption, no cross-purposes - heck, no human vice - we’re going to give less than that to some other company to create jobs that, presumably, it couldn’t afford to create on its own, which is why we have to give them money to begin with. (Phew!) Well, okay - maybe it’s not all bad, right? I mean, government jobs are still jobs, so it’s not like the $100,000 disappeared - some of it just went to government jobs while the rest went to these other kinds of jobs that we want more of. Sounds good… or does it? Keep in mind that, when most people work, they create something of value, meaning they create something that somebody else not only wants but is willing to pay for. If government created anything of real value, we wouldn’t need taxes - we’d just walk down to our government offices and hand them money voluntarily! The reason this is important is because, generally speaking, if you want something, sooner or later you’re going to want more of it, and will happily pay for it. So, if you’re a company producing something that somebody wants, people will voluntarily give you money, which you’ll use to hire more people (creating jobs!) to produce more of that something, whatever that might be. Do this enough times and that $100,000 can become something far more than that. If enough people do this, we all have more stuff that we want - more power, more cars, more amusement parks, whatever. Government, however, doesn’t create anything. Consequently, any money that’s taken out of the system by the government isn’t used to create anything at all, which means that we end up with less stuff that we want, whatever that might be.
So, to recap, instead of enjoying $100,000 worth of jobs, created by someone that clearly is producing something that somebody wants (otherwise they wouldn’t have $100,000 to take), we instead create maybe $90,000 worth of jobs, created by someone that clearly isn’t producing something that somebody wants, or isn’t able to produce it at a price point that people are willing to pay for, along with $10,000 worth of jobs that fails to produce anything. Sounds great so far, doesn’t it?
But wait!, you say, what if that person creating $100,000 worth of jobs creates jobs that we don’t really want long term? I mean, sure, they’re creating $100,000 worth of jobs now, but if they keep doing what they’re doing to create those jobs, we’ll be covered in soot and eaten by the oil grue in no time! To be perfectly honest, there may be some truth to this. The trouble here is that environmentalism and “green jobs”, as countless developing countries have proven time after time after time, is a luxury. Believe it or not, it’s perfectly possible to live without clean air, clean water, or clean food. Just ask anyone living in Southeast Asia right now, or ask someone who lived in back east or in Europe during the early 20th century. It’s not pleasant, it’s not healthy, but it’s definitely survivable, and, for most people, if you give them a choice between having a job that gives them a fighting chance to pay for their own food and lodging and preventing them from having that job by inefficiently redistributing money to industries that make you feel warm and fuzzy, they’re going to go with taking that job, even if it’s in the puppy eating industry. Heck, ask any inner city drug dealer - they already made their choice between “no job” and “job in a morally dubious field that destroys the community”. If you think people don’t care about the environment now, wait until they can’t pay their sewer bill.
Look, there is a time and a place to invest in “green” technology. Doing it under the guise of “creating jobs” when doing so requires taking money from industries that are scrambling to keep the jobs they already have is not it. Tell your legislators to stop trying to “create” anything and just focus on staying out of the way of those that actually are creating goods that people are willing to pay for and creating jobs in the process.






