Sunday, June 4, 2017

The Green Jobs Topic

Around a decade ago, I had a co-worker who pulled up a advertising piece from their old college....noting that they (the college) now was stressing and pushing job-training and job-degree type college classes for 'green jobs'.  I had a curiosity about this....what exactly did they mean?  Well....they had taken a number of classes for a AA-degree (two-year program) for landscaping and simply noted that this was a 'green job'.  To be honest, the program had probably been around for thirty years, but now, it was labeled as a 'green job' profession.  It wasn't new or created out of thin air....it was just a program that got re-labeled.

Since that point, I've had an interest in this whole gimmick of green jobs.

Last year, I started to read more through business and economic forums on this episode on green jobs.  If you go and listen to political folks or environmental enthusiasts.....you will find them hyped up and chatty over green jobs.  If you go and listen to actual business and economic experts....they are mostly....amused or negative.

I'll give you some examples: the NY Times from 2011.....was already noting the failures of the green job hype.  The Huff-Post in 2011....was discussing the downfall of Solyndra in the US and green jobs failing.  Daily Kos wrote a great piece on 2014....talking over the up and down rate of green job.  Judicial Watch wrote a pretty critical piece in 2013 and where green jobs sunk.  On, and on, and on.

So, what's the simple story here?

PhD 'Joe' comes up with this remarkable technology idea that is terrific from a science and business prospective.  Joe goes to banks and venture capitalists.  They are convinced there's money to be made, and step in with loans, and deals (maybe 20-percent ownership.....maybe 40-percent ownership).  Joe gets the money, buys an industrial front and spends a year putting the manufacturing part of this episode into effect.  Joe hires salesmen and the manufacturing team.  They launch production.  They go out and advertise.  Sales start to occur around 18 months after the venture capital was delivered.  Folks are happy.

Then, this funny thing happens.  The product is examined by some other PhD folks, and at some point.....some Chinese guys get into the mix.  They figure out enough of the product to build the 90-percent solution....for less.  The new competition gets business fronts in various countries and suddenly...our guy Joe....can't believe what has occurred.  Month by month....Joe is losing out on sales.  Joe's venture capitalists are angry....mostly over the fact that five years into this great deal....the profit margin is not there.  Joe cuts production staff and personnel.  Joe lessens his goals.  Joe borrows money for a new developmental idea to move ahead.  Joe finds no venture capitalist interested in the company.  Joe's company starts a failure trend by the 7th year of the experience.  Bankruptcy occurs a year later.

This is not a singular episode.  You can find it occurring in Germany, France, the UK, and the US.  There is a cycle of discovery, creation of a company, production and sales, and eventually....with competition by Chinese companies....a failure.

So you think about all these green jobs that people talk about.  From the early 1990s....yes, there are green jobs that have been created, but they fall into two categories (if you think about this).

The first category is simply re-labeling of functions.  For example.....a German garbage company makes their local city happy with a relationship and deal with a university.....creating a new green project which hires up twelve people.  The garbage company decides at the same time that all 108 garbage pick-up people in the area will be part of this massive new structure, and all of their 108 positions with the 12 new guys.....will be labeled 'green jobs'.  To be honest though....only the twelve jobs are newly created green jobs....the 108 folks are simply a re-labeling and NOT new.

Re-labeling of jobs is a popular trend and you find this going on within the German system.  Just to say that 8,000 new green jobs were created in 2016.....well....you'd have to dig into it and see how many were just re-labeling efforts and NOT newly created jobs.

The second category would be the firms like 'Joe' that I mentioned before.  They have a technology idea....get funding....produce and sell.  Then the cycle comes up, and down the line....they go like Solyndra....bankrupt.  In the German case, since the state always steps in and prevents dissolving of jobs....the green jobs stay on the books and people are paid via a government bank account....in hopes that the company can be sold to someone else.  That buyer?  In most industries outside of environmental science companies.....they will be sold.  Since there's no profit with the collapsed environmental companies....you rarely see a sale coming out.

All of this brings me to this remarkable topic....funding of new green job technology.  Maybe in the 1990....banks and capital venture folks were still players in this idea, but since the numerous failures have occurred over the past twenty years....they rarely want to play in this investment routine.  If they do play....they want a fantastic amount of their money repaid in the first three years of production, with the PhD (our guy Joe) getting next to nothing out of the profits.  By the fifth year when competition starts to affect profits, those venture capitalists can walk out the door and be happy.  Joe stands there with mostly nothing for five to seven years of effort.

What happens then?  Go look at the French, the Americans, the Germans, etc.....the governments started to get involve and provide loans or grants to jump-start these green jobs.....just to prove a point.  They had to....because banks and venture capitalists weren't eager to play this game.  Five to seven years later.....failure comes, and journalists simply write that a 100 million Euro loan wasn't enough to save such-and-such German company.  Or that a 700 million dollar grant from the US government didn't help such-and-such green jobs company.

So my challenge, for those who are hyped up and all fired up on green jobs....ask some questions.  Do you know anyone who has a green job?  If a guy has does have a green job.....is a real new created job or just relabeling?  Year by year, what are the real statistics on green jobs? When green companies fail....are the lost jobs figured into the statistics as lost green jobs, or just counted as lost general jobs?

If you were looking at a country like the UK or the US.....what's the real yearly count of created green jobs?  In a state like Florida.....is the yearly creation count something like 500 jobs a year?  If you had 500,000 jobs to be lost in the coal industry over the next decade....mostly out of West Virginia....would 500,000 new green jobs be created in West Virginia?  All I'm asking you to do.....is think.  Don't go to your general debate tactics and oppose without any sense.  Where are the green jobs in the end?

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