Hysteria about government budget shortfalls continues to sweep the nation. As with Wisconsin Gov. Scott Walker’s proposals to destroy public workers’ unions and collective bargaining, this hysteria provides cover for radical anti-government, anti-public interest and anti-worker actions, as well as slashing public spending.
But anybody worried about deficits—both the deficit of jobs and the red ink on government balance sheets—should be calling for new public investment in “green jobs,” not cutting public spending willy-nilly. That’s the message of a new study—“Rebuilding Green: The American Recovery and Reinvestment Act and the Green Economy” (PDF link)—from the BlueGreen Alliance (10 unions and 4 environmental organizations) and the Economic Policy Institute, a progressive think tank.
The new report assembles evidence from varied sources to demonstrate that the American Recovery and Reinvestment Act (ARRA)—the $780 billion stimulus bill—created or saved as many as 3.4 million jobs, lifted economic output by $520 billion and reduced unemployment by 1.8 percentage points from what it would have otherwise been.
The Recovery Act “was good for jobs, good for the economy, good for the climate and certainly good for the next generation of our children and grandchildren,” says United Steelworkers president Leo Gerard, labor co-chair of the BlueGreen Alliance. Acutely aware of the loss of 56,000 factories in the U.S. under Bush, Gerard champions ARRA’s green economy investments, which are creating new manufacturing jobs in industries both new, such as solar power, and old, such as hundreds of new jobs in a pair of unionized steel plate mills.
The $93 billion in green investments that were part of ARRA—such as money directed to energy efficiency and alternative energy, like wind power—were among the most effective programs in the package, delivering far more bang for the buck than tax breaks for corporations and rich people. And they generate three to four times more jobs per dollar than similar investments in the fossil fuel industries (and certainly more than the abundant tax breaks for the oil industry, which Obama proposes reducing).
“Rebuilding Green” calculates that the green investments are producing nearly 1 million (997,000) jobs, both directly and indirectly (including suppliers and secondary jobs generated by workers’ spending). That’s about 30 percent of all ARRA jobs from just 12 percent of the budget. And because it’s hard to track green economy investments made as a result of aid to states, Build America Bonds, and the Advanced Manufacturing Tax Credit, the study undercounts the jobs that green funding creates.
The green public investments also yield lots of well-paid jobs—construction, equipment maintenance, professional occupation, and manufacturing, for example—that disproportionately help non-college educated workers (disproportionately white and Latino men) heavily battered by recent economic restructuring.
Overall, “Rebuilding Green” concludes that the ARRA green economy investment is increasing the U.S. gross domestic product by $145 billion. Although the report does not attempt to calculate how quickly taxes on that increased economic activity will pay back the $93 billion investment, Sierra Club president Carl Pope, environmental co-chair of the BlueGreen Alliance, argues that getting $1 in new economic activity for every dollar invested in just the first eight months represents a fast payback.
The big payback
But there’s long-term payback that is equally important.
For example, even Obama is proposing budget savings by cutting the Low Income Home Energy Assistance Program (LIHEAP). But investing in weatherization of low-income families’ housing would not only provide the immediate jobs and support for a fragile recovery, Pope says.
It would also reduce the need for LIHEAP funding in the future and increase disposable income for low-income families rather than balance federal budgets by increasing their misery and reducing their income. (It’s a good example, as well, of why much of the progressive economic program deserves to be called public investment, by contrast with even justifiable “spending,” such as LIHEAP.)
“Rebuilding Green” contends that in the medium term, green public investments like those in ARRA contribute to wage growth that will make the U.S. economy stronger and more equitable, with lower trade deficits (for example, as energy import needs decline) and a stronger position in key future industries where other countries, like China, are pulling ahead with government support.
In the longer run, even when the economy recovers more fully, such green investments in the nation’s capital stock will continue to stimulate new private investment. Rather than “crowding out” private investment by competing for capital, the report says, “the Recovery Act’s green investments are ‘crowding in’ private sector investment,” often by requiring private co-investment.
Together, these public and private investments help the U.S. make a transition from a carbon-based economy, and solve the problem of climate change.