In the private sector, false advertising can get you into legal trouble. In the public sector, it’s often good politics.
Supporters of renewable energy want you to believe that green jobs at union wages are a benefit of the Climate Leadership and Community Protection Act (CLCPA). For example, NYSERDA CEO Doreen Harris recently boasted that for every job lost because of the green-energy transition, ten will be created. And Governor Hochul pledged last week to prioritize union labor in the green-energy transition, and the CLCPA mandates the application of New York’s prevailing wage law, which essentially requires union-standard wages and benefits be paid to workers on public construction projects, even when they far exceed market rates.
But Harris and Hochul are wrong — these jobs are a cost of the public policy, not a benefit. And expensive prevailing wage jobs only increase the cost.
How are they a cost?
Consider that the Climate Action Council claims that the CLCPA will cost up to $340 billion while providing benefits of at least $420 billion, for a net gain of at least $80 billion. The state’s numbers are probably wrong but set that aside for now. Instead, imagine that the cost was only one-tenth as much, just $34 billion. In that case, the net benefit would increase to $386 billion.
That would be a huge increase in the net value of the policy, but it would mean many fewer green jobs, because there would be less spending to hire people. Can anyone seriously deny the state would be better off if the net benefit of the policy was higher?
In other words, as a policy requires the public to pay for more jobs — or to pay more for those jobs — it becomes more costly to the paying public, not more beneficial.
Either state officials don’t understand this themselves or they hope you don’t. And admittedly, you’ve probably never been told that jobs are a cost. But it’s true.
But what about the jobs that will be lost in the industries negatively affected by the green-energy transition? That labor is freed up to perform other beneficial economic activity. And this always happens when an industry declines.
For example, almost half of the 100 largest industrial firms of the 20th century have disappeared, and yet with the exception of occasional recessions, employment rates have remained strong. Even more dramatically, two centuries ago, 90 percent of the U.S. population lived on farms. Today it’s only about one percent. The descendants of all those farmers are not unemployed today — instead they’re doing all the jobs that didn’t even exist a century ago.
The free market does a great job of creating all the jobs we need to replace those lost. For job creation, we rarely need any government policy except “get out of the way!” Governor Hochul has also pledged to make New York the most business-friendly state in the nation (it now ranks 48th). If she actually accomplished that, the market would take care of providing all the jobs people need.
Oh, yes, a public policy can create jobs in a specific economic sector, but that’s not the same as creating overall economic growth. Only entrepreneurs can do that.
Politicians promote industries that sound good, and which will reward them with votes, but they have no real skin in the game. If the businesses fail, or need to be propped up with taxpayer subsidies, there’s rarely any cost to the politicians who supported them. In fact, spending more taxpayer dollars on money-losing businesses can actually buy them more support. But entrepreneurs have to find opportunities that have real economic value, or they’ll lose their shirts.
This doesn’t mean the transition isn’t sometimes difficult for those who lose jobs in a declining industry (and public policy can help them out). It just means that if we could transition to a green energy future with fewer jobs, we’d have green energy and whatever other goods and services those other workers would be producing as entrepreneurs took advantage of having more available labor. We’d be producing more, and then we really would be better off.
There will, of course, be jobs associated with the transition to green energy. But for the broad public, that is part of the Climate Act’s cost, not its benefit. Government officials telling you differently is false advertising.