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Are the Green Jobs All in China?

Three articles in this week’s Washington Post and New York Times examine the question of whether the shift to clean energy will really create more U.S. jobs or just hasten the shift of jobs to China. It seems like there is strong evidence for the latter case.

Today’s New York Times covers the news that the United Steelworkers union plans to file a case with the Obama Administration accusing China of violating free trade rules in its subsidies for exports of clean energy equipment. Here’s a taste:

“The union says the violations have helped Chinese companies expand their share of the world market for wind turbines, solar panels, nuclear power plants and other clean energy equipment, at the expense of jobs in the United States and elsewhere. The filing asks the Obama administration to begin formal proceedings at the W.T.O. in Geneva to force China to repeal the subsidies.

“Unless China’s policies are urgently addressed, the U.S. may never get a fair shot at making the green technologies of the future,” the filing says.”

Yesterday’s Washington Post ran a business opinion column by Steven Pearlstein that looks at the structural dilemmas behind high unemployment in the U.S. and hits on a similar trade theme:

“The reason there were 8 million additional jobs back in 2007 is that demand for goods and services was artificially – and unsustainably – inflated by cheap, plentiful credit.

“Bringing down our trade deficit “either by producing more of what we consume (fewer imports) or more of what other countries consume (more exports) – represents the path toward sustainable, long-term job creation.

“The problem with that strategy is that for the past two decades we have allowed our industrial and technological base to deteriorate as talent and capital were grossly misallocated toward other sectors of the economy, even as other countries were able to attract the investment, the technology and the know-how to serve the U.S. and global markets.”

AND, he writes, “our companies are disadvantaged by an overvalued currency or unfair trading practices.”

Also in yesterday’s Post, a must-read example of a factory shut-down that will result in 400 lost jobs in spite of U.S. clean technology innovation. Where the author writes “lighting industry” one could easily substitute “solar industry” or “battery industry.”

“During the recession, political and business leaders have held out the promise that American advances, particularly in green technology, might stem the decades-long decline in U.S. manufacturing jobs. But as the lighting industry shows, even when the government pushes companies toward environmental innovations and Americans come up with them, the manufacture of the next generation technology can still end up overseas.

3 Comments

  • Sep 9th 201012:09
    by David

    Nice article. My only quarrel is with the quotation in the last paragraph – “even when the government pushes companies toward environmental innovations… the manufacture of the next generation technology can still end up overseas.” For one thing, I don’t think the US government had anything to do with the invention of the CFL, so they didn’t really foster innovation in this case so much as force everyone to use what they considered the better product.

    But more important, I would replace the word “even” in that quotation with “especially.” Whether a business lives or dies depends on economic considerations, and these are precisely the sort of considerations the government ofter ignores when formulating policy, especially, it seems, environmental policy.

  • Sep 10th 201013:09
    by Andrew Sun

    The cycle doesn’t end within US. China cannot jump out the cycle of low value-added production. China gets only very little part of the profit, the rest goes to the US, which may use the money to pacify the jobless, raising the average living standard and hence labor cost in US, which pushing even more plant to move to China.

  • Sep 14th 201011:09
    by Melody Voith

    Thanks David and Andrew for your thoughtful comments. David is right that when the government uses policy incentives (either carrots or sticks) it tends to run headlong into the law of unintended consequences. When I wrote about US funding for domestic production of lithium ion battery materials, the firms I talked to certainly said ongoing business strategy and demand was the driver, not the government help.

    Andrew, I have read other articles decrying what observe about China. Chinese-based manufacturers are likely to become more sophisticated and keep more profits at home, and certainly workers there have plans to raise their standard of living through demanding higher wages. We’ll have to see how that evolves.

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