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Green Jobs Reach 2.7 Million: The “Clean Economy” Starts Delivering on its Promise of High-Wage Jobs, Brookings finds

By Stephen Lacey on July 13, 2011 at 12:43 pm

"Green Jobs Reach 2.7 Million: The “Clean Economy” Starts Delivering on its Promise of High-Wage Jobs, Brookings finds"

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Numerous reports have shown solid growth in the “clean economy” over the years. But what we’re seeing now is that the clean economy is just, well, a normal part of the overall economy — albeit one with higher wages and more value-added.

Growth in jobs, wages, and GDP has been too slow, for sure, but the clean economy has been one of the few brights spots.  From 2008 to 2009, the clean economy grew by 8.3% — almost double what the overall economy grew during those years. That’s according to a comprehensive report released today by the Brookings Institution that tracked the growth of these sectors over a 15-month period of time. (Note: we incorrectly reported earlier that the sector saw 8.3% growth from 2003 to 2010. We have since corrected that error to reflect the real time frame — 2008-2009. In fact, only one third of the sectors tracked saw 8.3% growth between 2003 and 2010.)

The pace of growth really is torrid in that sector,” says Mark Muro, a senior fellow at Brookings Metropolitan Program and a co-author of the report. “This confirms the intuition that these exciting industries really are growing as fast as we think they are.”

As members of Congress and presidential hopefuls focus on job creation and maintenance, here’s another important statistic for them to consider: Sectors like clean energy, green building, and efficient transport employ 2.7 million workers — more than the biosciences and fossil fuel sectors.

And guess what? They pay better than the average job too. Median salaries for cleantech-related jobs are $46,343, or about $7,727 more than the median wages across the broader economy.

These Brookings figures show, yet again, that environmental sustainability isn’t some passing fad or a feel-good exercise, it’s a natural progression of the economy.

In 2010, 2.7 million jobs in the United States directly contributed to the production of goods and services that had an environmental benefit. The jobs were spread over 57,501 different establishments in 41,185 companies and existed in almost every industry.

There is also one more attractive feature of the clean economy opportunity structure: The clean economy not only pays well, but pays well even for those without post-secondary degrees. Almost half of all jobs in the clean economy are held by workers with a high school diploma or less, compared to only 37.2 percent of U.S. jobs.

Today, workers without college degrees are facing twice the unemployment rate as people with college degrees. A focus on cleantech jobs that are heavy in manufacturing, construction and installation could help close that disparity.

It’s probably not fair to compare this wide range of sectors (which includes nuclear — a decision that the Brookings researchers debated heavily) directly to fossil fuels. Brookings found that in the renewable energy sector specifically, there are over 100,000 jobs, with hydro, wind and solar PV accounting for about 75,000 of those workers. These are conservative figures: Other industry assessments put direct jobs at around 200,000. By comparison, direct jobs in coal, oil and natural gas are roughly 1.2 million.

An analysis from the Center for American Progress found that clean-energy investments create about 16.7 jobs for every $1 million in spending. Spending on fossil fuels, by contrast, generates 5.3 jobs per $1 million in spending.

Rather than engage in bean counting, however, the important take-away from the report is that the clean economy — which has become a large portion of our overall economy — comes with immense benefits beyond the obvious environmental factors.

Along with offering higher wages to a broader swath of workers, the sector is also very manufacturing-intensive and export heavy. Brookings found that the export dollars per job in cleantech almost doubled those in the broader economy.

Manufacturing and exporting are strengths of the clean economy. Engaged in the production of everything from house paint to fuel cell components and refrigerators, approximately 26 percent of all clean economy jobs are involved in manufacturing, compared to just 9 percent of jobs in the economy as a whole. In addition, Brookings estimates that in 2009 clean economy establishments exported an estimated $49.4 billion in goods, representing 5.3 percent of all U.S. goods exports. Such establishments were also responsible for an additional $4.5 billion in service exports.

These figures again highlight cleantech’s role in re-establishing America’s dominance in “making things,” as President Obama likes to say. Inventing, manufacturing and deploying clean technologies are a part of what we have always done as an economic powerhouse, but they offer even greater potential.

Ultimately, this is being lead by the private sector — with large investment banks, technology developers, construction companies and local businesses spurring innovation. However, while this broad sector is becoming a natural part of the economy, there are still many institutional barriers in place that make consistent, stable government incentives critical —especially in energy. Long-term tax credits, streamlined permitting, and public/private financing mechanisms such as the proposed Clean Energy Deployment Administration are an important piece of growing high-paying, manufacturing-intensive, export-heavy jobs.

If not, then we’ve all been warned of the consequences:

…U.S. firms are losing market share both at home and abroad to competitors from other nations. A huge part of the answer has to do with China’s ability to channel vast sums of affordable capital into innovative large-scale deployment projects—something that the U.S. continues to struggle with. The numbers speak for themselves. In 2010, China put into place a staggering $54.4 billion in clean energy investments. Of this, asset financing—funding for hard assets like wind farms and solar arrays—accounted for more than $47 billion of the total. By contrast, U.S. private investment in clean energy totaled $34 billion, with just $21 billion or so in asset finance. Now the gap is widening further, with Chinese asset finance investment in Q1 2011 clocking in $10.9 billion as compared to just $2 billion in the United States.

Developing cleantech is not a fad.  Quite the reverse — the clean economy is could be the biggest source of high wage jobs in the coming decades as we make the transition off of fossil fuels and greenhouse gases.  The economic stakes are very high, and this latest Brookings report shows yet again why.

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Below are earlier comments from the Facebook commenting system:

Leif Erik Knutsen

The GOBP continue to rag upon the clean energy sector, and in doing so plainly show either a lack of insight for an emerging segment of the economy or total disregard for the lives of the people and overall health of the Nation. I suspect the latter…

July 13 at 10:52am

Lisa Jaccoma

Thanks for posting this. Great piece. Positive. Strong numbers. One question. why isn’t someone from Brookings, or yourself, on every news show telling this story? Is it a secret? we hit these importantmilestones and tell one another – and no one else. Any other industry would be screeming from the treetops. You have to fight for respect.

July 13 at 3:30pm

ubiscuzi2

I don’t understand how you can give credit to Obama when it is apparent by these charts favor Bush more. Or please explain the sudden dip from 2008 – 2010. It would appear Leif forgot to look at this charts. But I guess his excuses are GOP related.

July 13 at 10:00pm

Richard Brenne

Speaking of dips, ubiscuzi2, Bush was president during most of the decline and Obama president during alll of the rebound, so I don’t think “Leif forgot to look at this charts.”

July 16 at 4:20am

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