10 :00 p.m. EST
Frank Conte, Communications|
Jobs a Cost, Not Benefit, to the National Economy
Finds Critical Economic Flaws and
MA Recent studies forecasting the potential economic benefits
of government green job programs are critically flawed and erroneously
promote these jobs as a benefit, according to a report released today
by The Beacon Hill Institute (BHI) at Suffolk University.
analysis reviewed the primary claims of three of the most influential
green jobs studies and found serious economic flaws in each.
to the claims made in these studies, we found that the green job initiatives
reviewed in each actually causes greater harm than good to the American
economy and will cause growth to slow, reported Paul Bachman,
Director of Research at the Beacon Hill Institute, one of the reports
reviewed by BHI include:
United Nations Environment Programme, International Labor Organization,
International Trade Union Confederations Green Jobs Initiative,
Green Jobs: Towards Sustainable Work in a Low-Carbon World.
Center for American Progress, Green Recovery: A Program to Create
Good Jobs and Start Building a Low-Carbon Economy.
U.S. Conference of Mayors, U.S. Metro Economics: Current and
Potential Green Jobs in the U.S. Economy prepared by Global
of the BHI critique identified a fundamental error in each of these
studies, specifically "counting the creation of a green job as
a benefit and rationale for its proposed program in and of itself.
study also stresses that Jobs ? green or otherwise ? are not benefits
but are instead costs. If the green job is a net benefit it has to be
because the value the job produces for consumers is greater than the
cost of performing the job. This argument is never made in any of these
three green jobs studies.
director of the Beacon Hill Institute and co-author, David G. Tuerck,
went further, noting that these studies are based on arbitrary
assumptions and use faulty methodologies to create an unreliable forecast
for the future of green jobs.
appears these numbers are based more on wishful thinking than the appropriate
economic models, and that must be taken into consideration when the
government is trying to turn the economy around based on political studies
and the wrong numbers, Tuerck said.
According to BHI, the results of the study also show estimates on how
a state-based cap and trade policy will negatively impact both job growth
and wages. One specific critique involves job creation in the state
of Indiana, where previous reports did not take increased energy costs
from a cap and trade system into consideration when looking
at job creation. In that case, BHI developed a computable general equilibrium
(CGE) model and found that contrary to previous studies, Indiana would
lose more than 18,000 jobs in 2009, up to nearly 29,000 job losses in
2011, and that real disposable income would be cut by nearly $1 billion
in 2009 and close to $1.5 billion in 2011.
concluded by noting that further economic analysis is needed before
governments move forward on green job initiatives. All three green
jobs studies we reviewed are riddled with economic errors, incorrect
methods, and dubious assumptions. Economic policy should not be based
on such faulty analysis. Serious economic studies of costs and benefits
are desperately needed before the adoption of any green jobs proposal.
study is available Full
Text of Study (PDF)
6/25/09 10:49 AM