The Trouble with BLS’s Pliable Green Jobs Definition

In 2009, when Congress passed the American Recovery and Reinvestment Act (stimulus), economists and pundits alike scoffed at the Obama administration’s estimates of the number of jobs that the bill had “created or saved.” Greg Mankiw, Harvard economics professor and former chairman of the Council of Economic Advisors, called the term “an act of political genius” on his blog, because “there is no way to measure how many jobs are saved. Even if things get much, much worse, the President can say that there would have been … fewer jobs without the stimulus.” By referring to jobs “saved or created” rather than the unemployment rate, the President created a statistic that would be almost impossible to refute.

The same methodology applies to the Obama administration’s green jobs figures, which were exposed as a farce earlier this month when House Committee on Oversight and Government Reform Chairman Darrell Issa (R-Calif.) grilled Bureau of Labor Statistics (BLS) Acting Commissioner John Galvin on his bureau’s definition of green jobs, estimated at 3.1 million for the U.S. economy in 2010. Chairman Issa asked a series of questions that were designed to push Mr. Galvin into admitting and defending more and more mundane occupations as “green,” eventually eliciting answers in the affirmative for antique dealers, environmental studies professors, teenage used record shop employees, clerks at bicycle repair shops, school bus drivers, and “the guy who puts gas in the school bus.” The exchange was splashed all over the news and internet, and would be hilarious if it were not so pathetic.

Every job that can be marked “created or saved” by government effectively lowers the cost per job to taxpayers, so the further afield the definition of green jobs is allowed to stray, the better those investments look. Jacking up the denominator in the dollars/job ratio makes green energy expenditures look better than they would otherwise, even if that means including the servers on food trucks that serve windmill construction employees during lunch breaks (which it does). This would be good news for the Obama administration if the methodology went unexposed.

But fudging the numbers on job creation in the green economy should call into question much more than the BLS numbers exposed by Chairman Issa. For example, the Department of Energy’s Clean Energy Loan Program, which includes the famous $535 million Solyndra debacle, among others, claims to have created “over 60,000” jobs with $34.7 billion in loans. But how many of those jobs were really “created” by the DOE’s loan program? DOE provides no documentation on its website of how it tracks job creation, so 60,000 jobs is likely a fanciful amount. For example, the DOE’s website includes a claim to have “saved” 33,000 jobs – 20 percent of the Ford Motor Company’s existing employees – with a 2009 loan of $5.9 billion under the Advanced Technology Vehicles Manufacturing Loan Program. Either DOE miraculously saved a fifth of Ford’s workforce by loaning it an amount equal to 5 percent of the carmaker’s $118.3 billion revenues in 2009, or it pulled the numbers out of thin air.

When President Obama was on the campaign trail in 2008, he promised $150 billion in “strategic investments” that would lead to 5 million new clean energy jobs. As part of the 2009 stimulus, $90 billion was spent on various green initiatives, including weatherization, with dismal results, and a $500 million green job training program with the goal of training 125,000 workers has found work for just 20,000. The Washington Post reported in September, 2011, that the DOE’s loan program had created just 3,545 “new, permanent jobs after giving out almost half the [$38.6 billion] allocated amount.” Even if one takes DOE at its word and accepts the 60,000 figure, the cost per job “created or saved” for the program is more than $578,000. In other words, even if the administration were not fudging the numbers, they would be underwhelming at best. BLS’s confession that many of the definitions of green jobs are bogus should further outrage taxpayers.

– Luke Gelber