Getting Real About ?Green? Jobs

Over the past year, Economic Modeling Specialists, Inc. (EMSI) has been fielding questions from local planners (workforce boards, community colleges, and economic developers) on how to look at green jobs, particularly at the regional level. Perhaps nothing has been more hyped, or misunderstood, than the potential impact of this sector on local economies.

In order to wade through the rhetoric and often overblown expectations, we?ve been doing our best to link labor market data to potential green sectors so people can gain an understanding of trends, earnings, education levels, and skills associated with ?green occupation clusters?. So far, we have made three general observations:

Many of these jobs are going to fall within the construction and manufacturing sectors (e.g., welders, roofers, HVAC installers, etc.),
Based on a lack of understanding, concrete information, and large scale demand, green jobs pose a very difficult development mission for local planners, and
It is vital to speak ?from the data? as much as possible.

Such realism is necessary. Given the recession, job loss, and our nation?s otherwise dismal financial condition, many are now questioning the continued emphasis on green jobs, climate change, and cap-and-trade legislation. In recent months we have seen a sizable pushback against some of this policy from groups ranging from the American Farm bureau and even the educational community. Recently, for example, Inside Higher Ed wrote about how ?some leaders in workforce development are concerned that more traditional skill trades within the manufacturing and construction fields are being deemphasized by community colleges looking for federal dollars to support newfangled programs.?

The public is also getting skeptical. A Gallup poll indicated that the recession has dried up some of the support for increased environmental regulation. Similar surveys by Rasmussen and Pew suggest a similar trend in popular opinion.

None of this suggests that most Americans, or most business, oppose environmental protection. It?s just that that economic growth and environmental protection should not be mutually exclusive.

Increasingly we find ourselves at a crossroads between two competing points of view ? one that thinks that we need to restore economic stability before we deal with environmental issues, and one that believes that if we fail to address environmental concerns aggressively right now, we are forfeiting our future.

Chasing Trends vs. Being Demand Driven

The promise of ?green jobs? has the allure to square this circle, and reconcile the needs of the economy and the environment. This causes a kind of thinking reminiscent of that associated with the ?90s dot-com boom. In that era, software and information was the next big thing. Many regional developers tried to get into the game, and some failed miserably. When the bubble burst, many were left empty-handed and embarrassed that they had essentially just wasted a lot of the public?s time, energy, and money on something that they frankly didn?t understand or have any real reason (in a regional context) to be pursuing.

Given this experience, it?s not surprising that green is being met with skepticism by some local planners, who can and should be rigorously dedicated to spending their dollars wisely and only on things that will advance their region?s businesses and people. This seems to come from an understandable concern that economic development should essentially be ?demand-driven? and in touch with needs of the local community.

At the same time, regional development can be traced back to the needs of local industry. The activities, interests, and employment of local industries directly and indirectly drive much of the employment and earnings in an area (the concept of an economic base). This leads some loath to invest resources into an emerging sector or a new policy, such as green, where there is little demand, enough jobs, or the background to justify the efforts.

?Policy? vs. ?Environment?

Right now, the primary struggles with green development come from: (1) actually understanding what ?green? is and (2) knowing which industries people need to be prepared/trained for. Some of the problem stems from the fact that green is happening according to a top-down, policy driven approach rather than an industry driven one.

In the U.S. we often see industry development happening from the ground up (e.g., from the local level and up to the national level). Industries develop hubs of production (e.g., Silicon Valley, the Research Triangle, and Hollywood). Regions benefit from this and become specialized and competitive at producing and exporting something that is demanded by the larger economy. This gives rise to specific skill and knowledge sets which further enhance the development of a region. Green jobs don?t really work this way. The ?greening? of our economy has sprouted from a particular ideological point of view (global warming, overpopulation, etc.), that drive the initiatives, many of them associated with the stimulus.

As is often the case, it is not particularly easy to translate the broad rhetoric, concepts, and policy (things like ?clean tech?) into local industries, impacts, skills, training programs, and demand. At the local level, it is also incredibly difficult to project future trends of what jobs and industries will begin to thrive or fail. Those who try to use only national predictions to implement new regional training programs or to develop local policies could find their new programs may not result in tangible benefits to the region. In a recession folks need and want jobs (in some cases, any job will do), and discussions about how something like clean tech is going to be the next big thing can be really frustrating (think ?dot-com? bubble).

Finally, a big part of the frustration around green jobs actually comes down to semantics. Politicians and news anchors often refer to green jobs as some sort of new ?industry.? Yet in reality green is much less about ?what? is being produced than ?how? things are produced.

In this sense, in order to have ?green? industry, you first need to have an industry that can be, if you will, ?greened?. Here is an illustration that points out the nuance: let?s imagine you have two tire manufacturers. One produces tires using traditional ?non-green? methods and the other uses recycled materials and can be classified as ?green.? At the end of the day are they both manufacturing tires? Well, yes of course. Are they part of different industries? No. Both companies also likely employ the same sort of people, use the same sort of equipment, and have similar sales and supply chains. Also, from a training/workforce development perspective these industries are going to look pretty identical ? with maybe a few minor skills differences.

Seen from this angle, green is not actually about creating a new industry sector in either a general or specific sense. Rather, it?s more about changing and retooling all existing industry sectors to make them operate differently.

It Needs to Be Data-Driven

In the United States, we have a huge amount of data at our disposal for development decisions. Our nation has over 1,800 (and counting) well-established industry codes (NAICS codes) that are standardized for the entire country. The 20 big industry sectors that compose our economy exist because of broad, long-lasting, nationwide demand. But right now, local developers cannot take such a well-researched, data-driven approach to green. There are a lot of people who are highly in favor of green, but in many ways, they don?t bring the sort of objectivity needed to hash things out for the sake of the local workforce. What if green actually isn?t a good idea for a specific community? Something like Biotech is great if you can have it, but if it?s not the right fit for the community, forcing it can be a bad thing.

Final Remark

For green to work at the local level, it needs to be demand-driven. It needs to be harmonized with local development efforts, and it must complement and not fight against regional economies. This means helping and not hurting local industries with too much regulation, and allowing regional developers to stay focused on longer-term efforts as opposed to short-term trends.

Do we want green to succeed? Well, sure. However, as the polls show, we will not have these things at the expense of economic growth. All this is to say that people are going to be more supportive of the green movement if it embraces another aspect of sustainability ? economic sustainability. The green movement and economic considerations are not mutually exclusive. If the economy continues to suffer, the green movement will suffer as there will be no money or opportunities to invest in green technologies. Only a broad based economic recovery ? based in the revival of productive industry ? can make green industry not only desirable, but practicable.

Rob Sentz is the marketing director at EMSI, an Idaho-based economics firm that provides data and analysis to workforce boards, economic development agencies, higher education institutions and the private sector. He is the author of a series of green jobs white papers.

Illustration by Mark Beauchamp