Do green jobs cannibalize other jobs?

April 7, 2009

President Obama has promised to help create millions of new green jobs, saying that doing so will spur the U.S. economy toward recovery — and has held out Spain as having “surged ahead” of the rest of the world by investing in renewable energy.

But a new study of Spain’s renewable energy initiatives has found that creating green jobs actually destroys jobs in other sectors — and  most of the time doesn’t lead to permanent employment.

The study, which was directed by an economics professor at Juan Carlos University of Madrid, found that every green job created by the Spanish government destroyed an average of 2.2 other jobs, and that only 1 in 10 were permanent.

“Spain’s experience cited by President Obama as a model reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created,”  the professor, Gabriel Calzada, wrote in an introduction to the study.

“The study’s results demonstrate how such ‘green jobs’ policy clearly hinders Spain’s way out of the current economic crisis, even while U.S. politicians insist that rushing into such a scheme will ease their own emergence from the turmoil,” Calzada wrote.

Conservative bloggers have seized on the study to show that Obama’s green energy push will cost the U.S. some 6 million jobs — although others have injected a note of skepticism.

The Wall Street Journal, for example, notes on its Environmental Capital blog that the study is fuzzy on exactly which jobs were destroyed in Spain and suggests that Calzada, as the founder of a libertarian think tank, might not be completely objective.

Photo credit: Reuters/ Regis Duvignau (Wind turbines)

7 comments

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You have mad a compelling argument why capitalism and free market economies are and never will be able to address sustainable use of resources by humans. Without such change the outlook for climate change is dour.

Humans resist change. Agriculture did not replace foraging cultures overnight. Neither slavery or the fuedal system went away willingly. However they were eventually replaced. The same will happen to capitalist societies. A new social system will replace capitalism so that the needs of humanity and a planet can be met. This a lesson of history. Another lesson is sometimes societies don’t change. Then collapse is inevitable.

Posted by Anubis | Report as abusive

[...] has cost 3 other real jobs. The price has been $700K for each. Sounds like we are right on track. Environment

[...] has cost 3 other real jobs. The price has been $700K for each. Sounds like we are right on track. Environment

I think it’s pretty obvious that people will lose jobs over the change in how things used to work. New technologies come out and people lose their jobs. Should we prevent newspapers from providing news on the internet because brick and mortar papers are going bankrupt and will inevitable fire all their staff? Embrace the change. It’s not going to be a smooth ride but we’ll be better for it.

Free market economies are imperfect, but are less imperfect than every other system that has been attempted thus far. One thing that always fails is socialist policy that attempt to override the market through irrational subsidies. Such polices may work in the short run, at least until people open up their electric bill one day and see them double or triple, and then realize that they will pay for these “green jobs” yet again next April 15 through the higher taxes that Obama will impose on them to pay for the subsidies.

Posted by teutonicking | Report as abusive

“The Wall Street Journal, for example, notes on its Environmental Capital blog that the study is fuzzy on exactly which jobs were destroyed in Spain and suggests that Calzada, as the founder of a libertarian think tank, might not be completely objective.”

If the conservative WSJ is skeptical of a ‘conservative’ study… skepticism may very well be warranted.

I also find it interesting that people jump on a single study to back their point, but deny the thousands of studies — the overwhelming majority — that affirm global warming or evolution.

Posted by elchip | Report as abusive

This is something anyone with a brain has been stating ever since Obama came up with the ridiculous job growthstatement.

Nine out of ten of these green jobs are temporary as are the infrastructure jobs he intends to create, bulding roads and bridges.

His plan seems to be a bandaid where a tourniquet is required. With hundreds of billions of dollars being spent on these temporary fixes, the patient will surely bleed to death!

[...] Reuters put it – much more kindly then we would have, by the way – “Calzada, as the founder of a libertarian [...]

There are so many things wrong with the way he reached his conclusions. I will address a few that stand out the most for me.

Spain’s High Unemployment Rate – Spains current unemployment rate is 14.2%. Surprisingly, for Spain, that number is not that high. There are eighteen years when the unemployment unemployment in Spain was between 24% and 15%. In fact, its current high rate is lower than many of the years prior to the launching of the green jobs program. Since the green jobs program was launched, unemployment has been significantly lower in Spain. It is possible that the green jobs program prevented the rate from climbing back up.

Another issue. The bursting of Spain’s real estate bubble. During the height of the bubble, Spain accounted for 1/3 of all Europe’s employment, when interest rates rose and the real estate bubble burst, unemployment soared. Similar bubbles had similar results to some degree in Canada, the UK, the US and a few other places. Economists predicted this outcome a few years ago and did not include in green jobs programs as a major factor. What is interesting is that Calzada does not even mention the real estate boom and bust as even being a factor in the rise in unemployment

There are other issues not taken into consideration. I wrote a very long post with links and numbers to back up my analysis on my blog.

You can read it at:
http://greeneconomypost.com/debunk-spani sh-study-green-jobs-1582.htm

http://www.environmentalcrossing.com is a good source of jobs because it only shows you jobs from employer websites and every other job board out there. It is a good tool to track down jobs because these jobs are often not advertised.

Posted by Tyler | Report as abusive

[...] Another sign that green tech is in trouble is the shift in reasons to support it.  No longer is it about saving Gaia from greenhouse gas, it’s about jobs.  Next time you see this from a politician, remind them how Spain discovered the truth about green energy and jobs. [...]

[...] Spain tried to implement a green jobs program, and it cost them 2.2 jobs in other sectors of the economy for every green job created by their green energy policy. [...]

[...] The next month, Reuters.com ran an article about the study asking, “Do green jobs cannibalize other jobs?” Reuters quoted the author of the study, Gabriel Calzada, who wrote: “Spain’s experience cited by President Obama as a model reveals with high confidence by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 crea… [...]

[...] The next month, Reuters.com ran an article about the study asking, “Do green jobs cannibalize other jobs?” Reuters quoted the author of the study, Gabriel Calzada, who wrote: “Spain’s experience cited by President Obama as a model reveals with high confidence by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 crea…“ [...]