In February 2009, the last time Democrats controlled the White House and both chambers of Congress, President Barack Obama and Vice President Joe Biden flew to Colorado to sign their $787 billion stimulus package into law.
The plan was to invest $150 billion over 10 years that would advance a “clean energy” economy built around biofuels, hybrid cars, low-emission coal plants, and renewable sources such as solar and wind. Obama and Biden promised to create five million green jobs that would specifically benefit low-income earners, claiming that the stimulus package included “help for those hit hardest by our economic crisis.”
A decade later, we now know that the 2009 green jobs program was a complete failure. The Department of Labor (DoL) and the Bureau of Labor Statistics (BLS) issued several reports on the green jobs program. Each report was an indictment on the program, as job placement met only 10 percent of the targeted level, and many of those who were hired remained employed for less than six months.
Eventually, the uninspiring growth in green employment led to a fraught redefinition of what constituted a green job. This led to a June 6, 2012, hearing of the House Oversight and Reform Committee, where Chairman Darrell Issa forced the acting BLS commissioner to confirm that, by the new BLS definition, oil-industry lobbyists had green jobs. And rather than providing economic support for those struggling the most in the economic wake of the 2009 financial crisis, the stimulus program ended up helping Democratic supporters and many very wealthy donors.
Fast forward to today, and we again see an emphasis on green jobs by the Biden administration. Throughout his campaign and early into his presidency, President Joe Biden has emphasized that one of the goals of his administration’s energy policy will be to replace jobs in the natural gas, oil, and coal value chains with jobs in wind and solar create green jobs. His campaign website states:
At this moment of profound crisis, we have the opportunity to build a more resilient, sustainable economy — one that will put the United States on an irreversible path to achieve net-zero emissions, economy-wide, by no later than 2050. Joe Biden will seize that opportunity and, in the process, create millions of good-paying jobs that provide workers with the choice to join a union and bargain collectively with their employers.
His website goes on to promise the creation of millions of green jobs, promising “far-reaching investments” in infrastructure, transit, building, housing, agriculture, the auto industry, the power sector, and environmental justice. So it’s worthwhile to revisit the 2009 stimulus bill and Biden’s previous attempt to create green jobs.
In light of the new Biden administration promises, it’s instructive to look back at those BLS reports from the Obama–Biden era.
In September 2011, DoL issued the first of four reports on the Green Jobs Program. The first report found that three-fourths of the way through the program period only 61 percent of targeted participants had signed up for training, that job placement was at only 10 percent of the target level, and that only 1,336 participants had retained employment for at least six months — 2 percent of the goal.
In October 2012, a follow-up report found that over 20 percent of certificates and credentials went to recipients who had only one day of training, that about half of those completing the green jobs program received five or fewer days of training, that between 24 percent and 44 percent of the employment outcomes could not be documented, and that the number of trainees who entered employment was less than 40 percent of the target.
BLS produced the other two reports. By that time, the low growth in green employment had prompted a redefinition of what constituted a “green job.” According to the BLS, the largest green-jobs category was “janitors and cleaners, except maids and housekeeping cleaners,” which had 56,700 green jobs — nearly 10 times as many green jobs as in “civil engineers,” which has the highest number of green jobs in the “architecture and engineering occupations” super-category. Another dubious inclusion was the septic tank and portable toilet servicing industry, which had 33 times as many “green jobs” as did solar electricity utilities.
Even the new, redefined green jobs did not reach the five million promised in February 2009. According to a study by the Brookings Institution, the Obama–Biden administration identified nearly 2.7 million green jobs, but most were bus drivers, sewage workers, and other types of work that do not match the “green jobs of the future” that the administration promised. Most of them were preexisting jobs, which were simply re-characterized by the government, apparently in an effort to boost the numbers.
It’s clear that the 2009 stimulus bill did not produce much in the way of green jobs, so where did all that cash actually go? One economist, John Lott, found that states with higher per-capita incomes received a larger share of the money, as did states that provided the Obama–Biden ticket with a larger share of votes. And of course, the most famous debacle of this politically connected money machine was the Solyndra bankruptcy, which took the taxpayers for $535 million. In short, the logic of politics inserted itself into the spending of the 2009 stimulus bill as it concentrated benefits on the well-organized and well-connected and passed the costs onto everyone else. As the Washington Post noted, “The administration … gave easy access to venture capitalists with stakes in some of the companies backed by the administration, the records show. Many of those investors had given to Obama’s 2008 campaign.”
Fast forward to 2021, and the Biden administration seems to be prepared to repeat the 2009 boondoggle. Facing an economic downturn caused by the COVID pandemic, Democrats are once again invoking concepts such as “green jobs” and “climate investment” in attempts to stimulate the economy.
What might the latest exercise in green crony capitalism look like? President Joe Biden, in an effort to make good on his “Build Back Better” campaign promise, is offering up a $3 trillion infrastructure program. Green groups have launched a multi-million dollar ad campaign to put pressure on the administration to dedicate a large portion of that funding toward green investment, meaning this push for green jobs will likely be much more costly than the $150 billion spent during the Obama era.
The details of the infrastructure package have yet to be spelled out in any detail, but it appears that the administration plans to split the effort into two main components. The first would bundle traditional infrastructure spending with clean energy handouts, and the second would focus on domestic issues unrelated to infrastructure, such as childcare and universal pre-kindergarten. The infrastructure bill is expected to be funded by tax increases, with the first component of the bill including an increase in the corporate tax rate and the second component including an increase in the highest income tax rate.
So, while the details of the infrastructure bill are not yet clear, what is clear is that the new push for green jobs will entail a substantial increase in government spending coupled with higher taxes. If the 2009 stimulus bill is any indication of what all of this tax and spending means for the economy, then Americans should expect the infrastructure bill to produce little in the way of green jobs and more of the crony capitalism that we have come to expect from politicians in Washington. Given that the Biden campaign was backed by deep-pocketed donors with financial ties to renewable energy projects, we should see these green-jobs promises for what they actually are: another doomed-to-fail scheme that will promote the interests of the politically connected at the expense of American taxpayers.
Alex Stevens is a Policy Analyst at the Institute for Energy Research (IER) and the host of the Plugged In podcast. Alex writes frequently on the relationship between business and government in the energy industry as well as the effects of regulation and subsidies on energy markets.
Dr. David Kreutzer is IER’s Senior Economist. Prior to joining IER, Dr. Kreutzer worked at The Heritage Foundation from 2008 to 2018, where he served as Senior Research Fellow in Energy Economics and Climate Change and as Senior Research Fellow in Labor Markets and Trade.