the (new) american worker

No (Economic) Surprise: Green Manufacturing Jobs Flow Overseas
April 3, 2010, 2:52 pm
Filed under: jobs | Tags: , , , , ,

One of the persistent concerns of President Obama’s massive $367 billion federal investment in new energy projects – from coal to renewables – is that the American labor force is too expensive, and/or lacks the proper training, for the needs of producers. A piece in Bloomberg BusinessWeek this week captured this idea quite simply:

No surprises: Arizona's First Solar will use federal incentives to hire 200 American workers - yet 71 percent of its manufacturing needs will still be met by foreign labor.

From BBW:

“Tempe, Arizona-based First Solar Inc. plans to do 71 percent of its manufacturing hiring in Malaysia after getting $16.3 million in federal funding to hire 200 people at an Ohio plant.”

Herein lies the ultimate problem – the economics of outsourcing the majority of manufacturing needs still makes sense to companies, incentives or not. Unfortunately, this simple reality doesn’t quiet any of the political outrage – especially as the Obama administration attempts to make good on its promise of 700,000 new jobs in stimulus renewables projects.

A green “industrial revolution” right here in America sounds great to some people – me included. This very blog was created to educate myself and others on the potentials for American labor in a new energy economy. Yet how the Obama administration is supposed to leapfrog over simple economics – foreign labor is, in my cases, simply cheaper – is still unclear to me. Perhaps it really is time that our nation’s expectations are shifted towards the potentials that lie in specialization and competitive advantage. CNBC recently ran a days-long debate on this topic, and the discussion turned often to where our best efforts should lie: in advanced education and innovation or in heavy industry and brawn. I believe Obama’s energy policies intended to do both – boosting Silicon Valley and Pittsburgh too. But is this really an economic reality? Perhaps not. “Green tech” manufacturing seems likelier to catch headwinds, i.e., manufacturing roles that place a heavy emphasis on innovation and other specialties, like low-carbon technology. But putting American steelworkers back to work building solar panels? Even with training and workforce investment, as U.S. Labor Secretary Hilda Solis promised in this manufacturing summit on CNBC, this is a tall order. I’ll continue to entertain the idea (dream). But in the meantime, let’s not be surprised when we continue to lose certain types of jobs overseas – even better, let’s plan for it.


Dear LA Businesses – What If Your Jobs Are Simply Inefficient?

There has been a lot of tension lately between Los Angeles-area businesses and LA Mayor Antonio Villaraigosa, a media spectacle that comes on the heels of Villaraigosa’s recent proposal to enact rate hikes at the Los Angeles Department of Water and Power. Yesterday marked the latest chapter in the saga, as the LA City Council voted 13-1 to reject Villaraigosa’s plan. The council will, however, take up the issue again Tuesday, thus propeling the mayor’s plan forward at least another week.

In a fight to shift demand towards more sustainable energy sources, Los Angeles Mayor Antonio Villaraigosa is honorably heading off political convenience for a broader good.

Quick to make Villaraigosa out as an economy-slaying villain, these businesses have claimed the mayor’s plan will bury businesses and consumers alike with rate hikes that could peak at 28 percent, according to this article in the LA Times. ‘How can we possibly survive this’ – CEOs have cried out. In nearly the same breath, they easily found their own answer – by cutting costs and reducing staff.

Naturally, in these tough economic times, any job losses are somewhat undesirable. But what Villaraigosa, in my opinion, is trying to do here is greater than propping up area businesses. What he is trying to do is use economics to shift demand towards more sustainable, cost-effective sources of power – in particular, solar utilities. And on the jobs front, well, Villaraigosa claims he can in fact create new jobs with his plan – new jobs that will not just send people to work every day, but increase their utility for the community at large. According to the LA Times, the mayor’s office hopes to create 16,000 new jobs in solar installation, and 1,600 new jobs for “DWP doctors” that would work as advisers to LA-area households on how to increase their energy efficiency.

One of my favorite things about this story is the political risks that are being taken. Even circling the topic of layoffs in a struggling economy is risky at best. But Villaraigosa and his supporters are taking the high road – putting good ideas to work and taking on the hard work of persuading communities to acknowledge opportunity costs. And guess what? Just because you have a job doesn’t mean it is necessarily all that efficient or that the government is required to do all things necessary to maintain your livelihood (ahem, GM).

A great quote from LA City Councilman Richard Alarcon (via LA Times):

“That concept has won the support of Councilman Richard Alarcon, who said that, as Los Angeles shifts to a green economy, some businesses will need to make ‘bottom-line decisions’ about whether they can continue to operate. ‘There are going to be more businesses that will not succeed. But if they don’t succeed, we want it to be for the right reasons — because we are moving the economy in the right direction,’ he said.”

A less great quote from City Council President Eric Garcetti:

“‘I’ve never been opposed to a responsible step forward’ in increasing electric rates, Garcetti said. ‘But to take a giant leap in the biggest economic downturn since the Great Depression seems to be rash.'”

Ah, the Great Depression – or the “Great Recession” as the AP now asks reporters to term the economic downturn of late. Yes, it is valid, but how long will it just be a convenient excuse?

–Mia Lamar