Clean Energy Spurs Job Growth, Researcher Says

By Toni Vranjes

March 26, 2012

The transition to clean power could broadly expand job opportunities, according to a researcher.

A study shows that clean-energy investments create more jobs than spending on fossil fuels, said Jeannette Wicks-Lim of the University of Massachusetts Amherst. In addition, clean-energy spending generates more jobs for people of all education levels. This could be particularly significant to people with a high-school diploma or less — a group that was hard hit by the recession.

She discussed the research earlier this month at the Good Jobs, Green Jobs conference in Los Angeles, which was presented by the BlueGreen Alliance Foundation.

Clean-energy investments create more than three times the number of jobs, per dollar of spending, than the same level of spending on fossil fuels. The findings come from a 2009 study, conducted by the university’s Political Economy Research Institute along with the liberal think tank Center for American Progress.

The study showed that a $1 million investment in clean energy would create 16.7 jobs. In comparison, 5.3 jobs would result from the same level of spending in the oil, natural gas, and coal industries.

According to the study, $150 billion in annual spending on clean energy would produce about 2.5 million new jobs. That includes investments from both the government and private businesses. (The $150 billion figure is the amount that the researchers estimated would be generated annually by the American Recovery and Reinvestment Act, which ultimately became law, and the American Clean Energy and Security Act, which ultimately died in the Senate.)

Assuming that the $150 billion spent on clean power would come out of spending on fossil fuels, then the shift in spending would lead to 800,000 jobs lost in the fossil-fuel sector, the study found.

Overall, though, there would be a net employment gain of 1.7 million new jobs.

“This is really important in dispelling the myth that transforming the U.S. economy to a clean-energy economy would be a job killer,” she said. “Instead, we can expect clean-energy investments to serve as a powerful engine for job growth.”

The researchers wanted to gain a full picture of job opportunities, she says. So they examined jobs created directly by clean-energy spending, as well as those created indirectly and through “induced” effects.

  • The jobs that are directly produced include “green” work, such as insulating homes, installing solar panels, and building wind turbines. This category also includes a variety of support jobs, such as secretaries and bookkeepers.
  • The spending also creates employment indirectly. This includes jobs at companies that provide steel or other supplies.
  • The “induced employment effects” arise from spending by workers in the first two categories. When they spend their earnings on groceries, clothes and other areas of the economy, that in turn creates more jobs.

Why does clean-energy spending produce more jobs? There are three major reasons, according to Wicks-Lim.

  • Clean-energy activities typically are more labor intensive, relative to the fossil-fuel sector. More of the investment dollars are spent on hiring people than on buying machines.
  • Clean-power activities have a higher domestic content. More money is spent on goods and services produced in the United States.
  • The average pay levels of clean-energy jobs are lower. Therefore, the same level of spending can support more jobs.

Clean-energy investments produce more jobs across all education levels, and at all pay levels, a study found. Source: Political Economy Research Institute

However, she emphasizes that clean-energy investments produce far more jobs at all pay levels, relative to fossil-fuel spending. So there would be employment growth across the board.

“You’ll actually have more high-paying jobs, more middle-paying jobs, and more lower-paying jobs,” she said.

And for those clean-energy jobs without decent earnings potential, other forces could help improve pay, according to Wicks-Lim. Those forces include stronger unions, higher minimum wages, and a lower unemployment rate. When the jobless rate is relatively low, employers vigorously compete for workers – and that may lead to higher wages.

“Clean-energy investments have the potential to substantially lower the unemployment rate,” she said. “And lowering the unemployment rate will in turn support workers’ efforts to improve the pay of their jobs.”

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