The United States suffered a net loss of 12 factories and 2,400 manufacturing jobs per day during the first 10 years of the 21st century. This is a net loss of 44,000 factories. (1)
These statistics are only the tip of the iceberg. Here are some data for engineers. Back in the 80s and 90s, the unemployment rate among electrical engineers (EEs) and computer scientists (CSs) was, by and large below 2%, but it has gone up drastically since then. It soared to 8.6% in the second quarter of 2009 for EEs and to 5.7% for CSs. At that time the government counted 29,000 EEs out of work. Although these numbers are below the average unemployment rate in the US, they are extremely alarming because we are talking about a profession that drives technological progress. In the third quarter of 2009, the unemployment rate for mechanical engineers was 9.5% reports Eugene Veklerov. (2)
Jonathan Bloom reports on the drug-discovery industry noting that with around $1 billion in costs to bring a new drug to market coupled with ever increasing restrictions from the FDA, drug companies trim expenses by outsourcing research to India and China. Bloom states, “It started as a trickle, but soon became a tsunami, leaving many thousands of highly intelligent and well-trained professionals with nothing to do—a shameful waste of talent. One company after another shed employees in huge numbers—300,000 since 2000. When Pfizer—facing the looming expiration of its Lipitor patent and a poor research pipeline—bought Wyeth for its portfolio of products in 2009, it cut about 25,000 jobs, with more to come. Most of the combined company’s research sites have either closed or are in the process of doing so. Before long, the world’s largest pharmaceutical company will be conducting very little research in the US.” (3) The company announced early in February that it will shutter US and British labs and move its antibiotic research program to new facilities in Shanghai. About twenty-five percent of Pfizer’s scientists will be let go in the process. (4)
Look to Government For Jobs
If you want to better understand why so many states—from New York to Wisconsin to California—are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government. (5)
Stephen Moore reports, “It gets worse. More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year-tab for pay and benefits of state and local employees. Is it any wonder that so many states and cities cannot pay their bills? Every state in America today except for two—Indiana and Wisconsin—has more government workers on the payroll than people manufacturing industrial goods. Consider California, which has the highest budget deficit in the history of states. The not-so-Golden State now has in incredible 2.4 million government employees—twice as many as people at work in manufacturing. New Jersey has just under two-and-a-half as many government employees as manufacturers. Florida’s ratio is more than 3 to 1, so is New York’s.” (5)
Don’t expect a reversal of this trend anytime soon. Surveys of college graduates are finding that more and more of our top minds want to work for the government. Why? Because in recent years only government agencies have been hiring, and because the offer of near lifetime security is highly valued in the times of economic turbulence. (5) Also, federal jobs overpay their private sector counterparts 83 percent of the time, according to information from the Bureau of Labor Statistics. For example, a cook on the federal payroll will make roughly $15,000 more than one in the private sector. A public relations manager working for the US government will out-earn his or her private sector counterpart by an average of more than $44,000. The disparities don’t only show up in salaries. According to the Bureau of Economic Analysis, average health, pension and other benefits tally up to $40,785 per federal employee—compared with just $9,882 per private worker, reports Shannon Bream. (6)
On the positive side, we can still boast of the best software companies: Microsoft, Oracle, Adobe, etc. However, their products are pirated on a huge scale all over the world. Microsoft estimates that over 90% of Windows software used in China is stolen. Recently, in the city of Kunming, China, trade officials uncovered five storefronts mimicking the iconic look, logo, and layout of an Apple Store. They’ve been described as ‘the best ripoff we had ever seen.’ (7)
“Green Jobs”
An Iowa plant President Obama visited had 91 employees. Another plant nearby, TPI Industries, which makes blades for wind turbines, employs another 300 workers, and its workforce may grow to 700 if demand increases as expected. Both plants are located in factory space that previously housed a Maytag factory, which had employed 1,800 people. (8)
Writing in the Washington Post about the shift to ‘smart meters’ from electric meters, Sunil Sharan questioned the job-creating potential of the more than $4 billion of 2009 stimulus funds for producing and installing nearly 20 million ‘smart meters’ by 2015. He pointed out that manufacturing of the meters will occur predominantly overseas and that domestic manufacturing jobs as well as supervisory domestic management, R&D, and information technology jobs are likely to number only in the hundreds or low thousands. Sharan estimated that it will take 1,600 new workers to install the 20 million smart meters over five years, but that eliminating the many meters that are now read manually each month will cost 28,000 meter readers their jobs over the same period. (8)
Michael Graertz adds, “In 2009, for the first time, China manufactured and installed more wind turbines than the United States. Despite billions in direct subsidies and tax breaks now available to domestic wind and solar manufacturers and customers, much of the job growth seems to be occurring elsewhere. Suntech Power Holdings Company, which received a grant of $2.1 million to build a solar plant in Arizona, is hiring 70 workers there to assemble components made by the company’s 11,000 Chinese employees. First Solar Inc., the world’s largest producer of thin-film solar power modules, received $16.3 million to add 200 jobs in Ohio, but the company also employs 4,500 workers worldwide, mostly in Malaysia, where it expects nearly three-quarters of its expected factory growth to occur. Many multi-national companies from Europe and the United States are building large factories in China to supply that nations’ rapid growth in generating electricity from wind and solar sources.” (8)
A recent analysis by the Environmental Working Group found that while adding more corn ethanol to gasoline would create 27,000 jobs—each of those jobs would cost taxpayers as much as $446,000 a year. (9)
Overseas Experience
Government support for the renewable sector in Scotland is costing more jobs than it creates, a report has claimed. Results showed that 3.7 jobs were lost for every one created in the UK as a whole and that political leaders needed to engage in ‘honest debate’ about the issues. (10)
In Spain, ‘green jobs’ can require a subsidy of $1,000,000 per job. Wind-related jobs in Denmark are subsidized at the rate of 175 to 250 percent for each ‘green’ employee. Two-thirds of the ‘green jobs’ in Spain came in construction, fabrication, and installation, one quarter in administrative positions, marketing and projects engineering, and just one out of ten jobs was created at the more permanent level of actual operation and maintenance of the renewable sources of electricity. Overall, the programs creating ‘green jobs’ resulted in the destruction of nearly 110,500 jobs elsewhere in the economy, or 2.2 jobs destroyed for every ‘green job’ created. (11)
Jeremy Hsu notes, “Clean tech has seen a boost as the US pours government funding into renewable energy, and China looks to reap much of the benefits. Latest example is a Chinese wind-turbine company which is the exclusive supplier for one of the largest wind-farm developments in the US. This comes as the US has increasingly out-sourced much of its wind turbine development. Less than a quarter of wind turbine components installed in the US came from domestic production. Just 15 percent of the 2,800 new jobs from wind turbine development will take the form of US jobs.” (12)
Summary
Green jobs cannot reduce unemployment when they require significant government assistance. When the President and Congress talk about green jobs, they are talking about ones created via federal tax breaks, subsidies, or outright mandates. For example, wind and solar-generated electricity already enjoy subsidies nearly 50 times higher per unit of energy than ordinary coal and 100 times higher than natural gas. (13)
So, what do you expect about jobs when you have a country that decided to abandon its manufacturing sector? We have gotten rid of mining, oil-drilling, logging and others. We no longer have ugly and smelly factories, but despite zillions of dollars in government subsidies, promised green jobs are not forthcoming. We now buy mostly everything from abroad. Who needs American workers now?
References
- Arthur B. Robinson, “44,000 Factories,” Access to Energy, 38, 1, March 2011hinke
- Eugene Veklerov, “ Hollowing out science and engineering careers,” American Thinker, February 6, 2011
- Jonathan Bloom, “America’s vanishing science jobs,” New York Post, June 24, 2011
- “Pfizer shifts research to China: Is anyone to blame?”, American Council on Science and Health, February 8, 2011
- Stephen Moore, “We’ve become a nation of takers, not makers,” online wsj.com, April 1, 2011
- Shannon Bream, “Federal government jobs far outpace private sector counterparts in pay, benefits,” foxnews.com, April 5, 2010
- “China’s fake Apple stores: An instant guide,” theweek.com, July 26, 2011
- Michael J. Graetz, The End of Energy, (Cambridge, MA, 2011), 168
- Steve Larkin, “Private sector ‘green jobs’ trump federally subsidized ones,” Canada Free Press, June 15, 2011
- “New study: Green sector costs more jobs than it creates,” UK News, February 28, 2011
- Gabriel Calzada et al., “Study of the effects on employment of public aid to renewable energy sources,” Universidad Rey Juan Carlos, March 2009
- Jeremy Hsu, “Huge Texas wind farm’s turbines will be made in China”, popsi.com/technology, October 30, 2009
- Ben Lieberman, “Green jobs: Environmental red tape cancels out job creations,” The Heritage Foundation, February 4, 2010
