Matt Yglesias is upset about the double standard applied to Green Job rhetoric

So when politicians want to talk about economic growth, they tend to talk about “jobs.” Absolutely all politicians do this. When governors want to brag about how lots of people have moved to their state, they say they want to “create jobs.” When critics of carbon pricing say that cap-and-trade will “destroy jobs,” what they mean is that it will slow economic growth. When Newt Gingrich says we can “create jobs” by drilling for oil everywhere, he’s saying that he thinks the optimal long-term growth strategy for the United States is to try become more of a natural resource extraction economy. It is true that when Barack Obama touts “green jobs” as the future of the American economy, he’s saying something that doesn’t literally stand up to scrutiny. What he means is that he wants a higher productivity economy that also has less pollution. But the only analytic error he’s making here is the exact same analytic error that all politicians are making when they talk about “job creation.”

So there are two issue here.

1) I am not sure that politicians understand the difference between jobs and prosperity. When I was young and naive in the ways of the world I would write reports for legislative commissions on tax reform proposals. A question actual members of the commission – who are more knowledgeable that the average legislator – always asked was: “what will this do to job creation.

I said that job creation is primarily determined by the number of people who want to work and the quantity of money in circulation and that it was unlikely that any of these proposals would affect either of those in a meaningful way.

“So you are saying it does nothing to the economy” was the reply.

“No, I am saying it does nothing to job creation. You can have plenty of jobs and a crappy economy.”

This conversation went nowhere fast.

But, I learned. Now, I convert economic efficiency into “jobs” by dividing the efficiency gains by twice the average wage.  If you want to be really fancy town then you can use the input-output tables to do this on a market by market basis. Then you say “this proposal could create as many as X jobs”

Which is entirely true. If the supply of labor was perfectly elastic at the prevailing wage then it could create X jobs. Of course, if people have realistic preferences then your mileage may vary.

2) Green jobs do defy this general approach. The reason is that you are usually talking about getting the same economic output through some less efficient means – at least in a market sense.

The return is a cleaner environment, but there is no basic reason to think that would be reflected in higher real output per hour worked. Now some people try to use lower asthma rates and such to do a conversion. However, the fact remains that green jobs in general should not be productivity enhancing.

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