Tuesday, March 04, 2008
ECON 260: Comment Tread for 3/5 class
(1) How do you feel about the framing or focus of the debate on jobs? Does this framing lead to jobs receiving too much weight in the determination of policy? Are there consequences for policy when jobs receive an "extra" weight relative to costs and benefits?
(2) How should we tradeoff the jobs/incomes of one group of people versus the jobs/incomes of another group of people? E.g., in the West there are big fights over dam removal -- farmers "need" the dams to irrigate their crops, while fisherman need the water trapped behind the dams to maintain fish stocks. How should we account for job "gains" and losses to two competing users of natural resources? Furthermore, should it matter if one of the competing groups isn't currently working at these jobs? That is, often environmental protection will lead to the creation of new jobs. Should place a lower value on new created jobs than we do on old lost jobs?
I really appreciated the Whitelaw article on Breaching the Dams for this reason. He points out the flaws with the fixation on jobs, and how the narrative can be told in many ways (ie the Corps taking a snapshot of 1995 vs. over the long term).
In regard to environmental legislation, it does an enormous disservice to pit protection against jobs. As in the Spotted Owl controversy, this is often not the case. However, it enables the age-old animosity between environmentalists and laborers. However, I don't think Whitelaw does a sufficient job addressing this at the bottom of page 2 in the first column: for jobs lost in the timber industry, he argues that the Pacific NW economy has boomed nonetheless. However, for the loss (albeit a very small percentage), was there adequate revitalization in those specific communities? As far as I am aware, the economies in rural Oregon and old timber towns are pretty depressed... So, how can we value jobs as indicative of the welfare of communities, but also see them (perhaps as less sacrosanct) in the overall picture?
Requiring wine producers to use cork to seal their bottles of wine shows just one example of how an environmentally-friendlier option actually leads to a greater number of jobs in the economy. The WWF article states how without the wine industry using cork tops (which accounts for ~70% of use of these oak forests), thousands of jobs are at risk of being lost in countries such as Portugal, Spain, Morocco, and Algeria through the mechanized plastic making top industry. This ties back to the jobs vs. jobs concept and now leads us to wonder how to compare the jobs in producing plastic tops to cork tops. In debating which option is better, can we use a consideration of mere number of jobs created (like safety standard and mere number of lives saved)? But with ecosystem health at risk, how can we determine which job gains or losses are better in the consideration of a possible cork regulation? Here, it seems the old jobs have a more sustainable relationship with the environment...
WWF Review http://www.wwf.org.uk/filelibrary/pdf/corkscrewed.pdf
Like Eban discusses in the text, the argument that environmental regulation results in a "minimum of 200 thousand" jobs loss - the environmental-jobs trade-off, is an inaccurate one. There has been little evidence of actual layoffs. While there may be a restructuring of employment nationwide, the percentage of jobs lost due to environmental regulation is minimal. However, in the short run, plant shut-downs and layoffs can be particularly hard on the individual. I would argue, since economy-wide employment is more affected by fiscal and monetary policy, economist who argue jobs have more weight than environmental policy is unnecessarily pointing their finger. In terms of costs and benefits, jobs loss is not really a significant cost. So the more weight put on jobs as cost, the less benefits or money allocated for environmental policy will be.
There should be no more valuation on old jobs as there is on new jobs. While loss of jobs on a peoples or community might temporarily put a lot of financial stress on them, jobs will eventually be restructured. New environmental policy will most likely create new jobs for them or someone else in the economy. So on the national scale, new and old jobs should have equal valuation and the unemployed will theoretically find new jobs eventually. One idea I would suggest to alleviate the individuals suffering is compensation by environmental groups or the government until the "new" jobs are created.
Some areas are trying to have these kinds of conversations. Douglas County in southern Oregon is just such a timber town, but the residents have been working on developing solutions to their intensive logging that keeps jobs there. They're looking into the possibility of producing biomass for energy locally, which, if successful, would be much closer to a pragmatic solution than a deadlock of jobs vs protection.
I think jobs need to be kept at the forefront of cost-benefit analyses of this kind, but *both* kinds of jobs - future and current. It also can't be just about that. My hope is that a conversation about jobs and jobs can allow us to focus more attention on the real issue - how important it is to protect the environment, what about it needs protecting, and what that might look like.
I know a few other students in this class have also read Breakthrough. Is there anything you’d like to clarify or add?
I think that lose of old jobs should be weighted a little more heavily than the new jobs available, because there is a loss for certain people that may not have the qualifications for these new jobs and there is also a lag time between the lose of a job and applying and finding a new one. However, I don’t think this should have a huge weight, because there can be a net benefit or perhaps an even net value in the change of jobs. Another important part of the benefit side is the benefit outside of the change in types of jobs. So the slight loss in the weight given to old jobs can be made up through the ecosystem services, or aesthetic value of the river that now runs free. When these benefits are included along with the actual gain or loss in change of jobs, a policy can truly be decided on.
Another thing I noticed from the article was the language used against the breaching the dams. As Whitelaw pointed out "disastor", nightmare", and "sledgehammer" were far too harsh of terms to use in this instance. Whether or not those who used the terms truly believed these terms were necessary it seems to me, they were used more as a way scare tactic for the less informed. This seems to be a major component of anti environmental arguments, instead of all of the facts. (Though not always)
I'm not entirely sure where I'm going with this, but I'll post it anyway.
I'm guessing that some people will want to say yes, lost jobs should matter more because no one like's loosing what they already have. I would sooner think the opposite because new jobs could easily be much more valuable to society. If environmental policy kills one occupation for another one which encourages a "more healthy" relationship with the environment, I would want to value it more. In the short run it may seem bad to loose jobs. But, if they can be replaced for a "better" job, the long-run picture may be sweeter.
That all being said, I suppose it frightens me to start thinking about decisions being made by economists (and based on JOBS) that will greatly effect ecosystems. It seems ridiculous to try to determine environmental policy (something that has to do with ecological interactions) with a persons income. Maybe I don't understand how these calculations are made and for exactly what reasons, but it looks like apples and oranges to me.
Because regulation and job loss do not face significant trade-offs I believe that job loss should not be as heavily weighted when determining the costs of regulation. When it is considered, I believe that old and new jobs should be valued about the same because there is evidence that regulation does indeed create many new jobs in the form of cleaner technologies. Despite regulation’s small effect on the entire economy, I do recognize that it can have short-run devastating effects on local economies. I agree with Amber in that the government should provide short term compensation to help alleviate this problem like the retraining fund created after the Clean Air Acts of 1990.
It seems that as long as new jobs are created as a consequence of regulation (which according to both Whitelaw and Goodstein is almost guaranteed) and considering the goal of environmental legislation is to provide significant benefits to communities, I agree with megan that while in the short run old jobs may have more value to individuals, in the long run new jobs will provide benefits to the greater community that far outweigh these costs.
It seems that "valuing" old versus new jobs needs to take into consideration all the other factors that we are distracted from when the issue is framed strictly as jobs vs. environment. The value should be judged more by considering the long term ecological and economic benefits that come as a result of the environmental regulations than the costs to individuals in the short run.
Here is a interesting article on the cost of cars which puts the cost of one person driving per year at over $13,000, factoring opportunity costs and roads.
The consequences for placing a high status on current jobs typically are weak policies or no policies at all.
Instead of measure gain between jobs created and jobs lost, it should be a comparison between the measurable and non-measurable benefits. People have the ability to more resilient than the environment over time, especially as human population increases. Employers in the field of business downsize fairly frequently based on the markets status. While it is unforntunate they adjust to the market as such, environmental policies adjust to a moral judgement, or even emotional response to the thought of removing people from their prized jobs. The fact is their jobs that most likely are contributing to the situation that exists.
It's a hard topic to tussle with, but I do think that jobs play a very important part in the discussion.
1) Axiomatically, if the debate over the environment comes down just to jobs v. jobs, then environmental costs versus benefits are obscured. As Lillie mae noted, this debate is likely to continue, as humans are those who are making the determination on what environmental policies to implement. The problem, though, as noted in the prompt before the blog questions, is that the tradeoff of jobs versus the environment doesn't necessarily exist, nor does a tradeoff of the environment v. jobs. As such, when jobs v. jobs gets weighed, and it is likely that jobs will grow either way, then environmental policy still could be implemented. Perhaps the dichotomy between jobs and jobs, then, would promote environmental protection. As long as there is some compensation to the 'losers'' from the policy, people may be more amenable to enacting environmental policy. In then end, it would be good to weigh all costs and benefits, but that just doesn't seem to be the paradigm policy makers use to make decisions.
2) Jobs that don't exist may need to be given a smaller weight. Uncertainty that exists in creating new jobs/industries means that the expected value of the jobs that are coming is smaller than jobs that exist now. Likely, though, there could be an efficiency gain from regulation that would mean that the expected value of future jobs would still outweigh the cost of eliminating existing jobs.
The way to deal with competing claims to a natural resource is to include in legislation re-training or relocation programs. Farmers would are unemployed due to structural changes (or perhaps sectoral shifts) can be compensated with fiscal revenue to mitigate the cost of the change. This would allow for more environmental policies to be pareto improving, as some of the allocational benefits of creating new jobs can be taxed away and used to mitigate distributional concerns.
The problem with that proposal might be,though, that the gains from regulation are not revenue-generating. In that case, it may just be a fiscal hit that fills in the gap to fund worker relocation/retraining programs. If, as a society, we determine that such regulation is important, then we should also be able to dip into the federal or state coffer to ensure that we don't leave a large 'loser' population from gains that benefit a large potion of society.
Our culture and economy is all about progress. If the new jobs created by environmental policy contribute to this progress then they could actually be placed at a higher value then the old jobs lost. Individually, it is difficult to justify losing one’s job and feeling okay about it because someone else found a job. But looking at it from the big picture, it might be beneficial to the land and economy as a whole.
1) I believe policy should focus on the greatest benefits over a reasonably long amount of time. The loss of jobs should be considered (possibly through providing a month or two of compensation while they find work elsewhere) but should not be the deciding factor in policy decisions. These people will eventually fill other spaces in the economy.
2)Taking into account sustainability and what the economy currently "needs" should be given more weight than the jobs of either group. i.e. the jobs of the group that the economy 'needs' more should be given more weight. We should not place a lower value on new created jobs that on old lost jobs. If anything, the value placed on created jobs should be greater if it is taken in conjunction with the overall gain from the policy change.
As environmental policy is affecting/creating a socially constructed "environment", then it makes more sense to not think of it as a trade-off between the environment and job availability because it is a human preference of work environment we are delineating. The framework of environment(again, socially constructed) vs. jobs is not useful, as many have commented, which seems to leave us with jobs vs. jobs. In terms of environmental (and all) policy, I support not only detailing out the new jobs that will be available, but internalizing the loss of old jobs and somehow maintaining the old work force in another sector. I concede that this is easier said than done, and predictions of benefits and costs well into the future are often miscalculated. If jobs are seen as a market then from an efficiency point of view, then we run into transaction costs and free-riding problems when trying to defray the negative externalities/ compensation. Furthermore, we need to question the feasibility of finding a encompassing scale we can place both non-market benefits/costs (e.g. aesthetic appreciation) and market benefits/cost (e.g. jobs).
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