Homeowners Alone Can't Turn Blue Collars Green
Last year, President Obama made green jobs a centerpiece of his job creation and stimulus programs. But despite the promises, we haven't been able to create green-collar jobs anywhere near fast enough to replace the jobs that have been lost. That's particularly true in fields related to construction work, which have been hard hit by the housing market collapse.
The unemployment rate jumped to nearly 25 percent in January for people in construction jobs, according a recent article in Time magazine. In some parts of the country joblessness in construction could be as high as 30 percent, Time reports.
The stimulus packages Congress passed have been "the most ambitious green-agenda action ever by the government," says Robert Pollin, co-director of the Political Economy Research Institute at the University of Massachusetts, Amherst. Still, Pollin told HousingWatch, "they have been a drop in the bucket in comparison to the sheer number of jobs that have been lost."
Pollin is the author of a pair of influential reports issued in the fall of 2008 that looked at how the green economy could shorten the recession and fuel a recovery. As I reported in USNews.com at the time, Pollin's research suggested that if Obama directed $100 billion in a green U.S. economy when he came into office, he might create nearly one million jobs in just a few years.
In particular, Pollin, left, thought that spending stimulus money on energy-efficiency retrofitting would create jobs for electricians, heating/air conditioning installers, carpenters, carpenters' helpers, construction equipment operators, roofers, insulation workers, construction managers and building inspectors. Meanwhile, adding solar power to new and existing buildings was supposed to put construction equipment operators, electricians, welders, installation helpers, laborers and construction managers to work.
Why didn't the jobs materialize? One of the problems, says Pollin, is that "the government is relying on individual homeowners to create these jobs," by encouraging them to retrofit their homes with better insulation, new windows, more efficient heating and AC ducts and other energy efficient features. But there are "too many steps," like securing loans, pricing out contractors and filling out rebate forms for homeowners to move forward with these projects quickly enough to have a big, fast impact on jobs, he said.
"Obama had a photo op at a Home Depot, but his message was askew," he said, referring to the President's energy efficiency speech last December at a Home Depot in Alexandria, Va. "That message was get to Home Depot and get your caulking gun and get it done, but that's not really going to spur new jobs on the level we're talking about."
Calli Schmidt, Director of Environmental Communications at the National Association of Homebuilders, concurs. She tells HousingWatch that a lot of the stimulus money has been filtered down for distribution by the states, but with red tape attached that has made it hard to put it to work. "Homeowners and contractors have to keep track of a lot of paperwork that just isn't always practical," she says.
Besides, homeowners have other distractions. "If you're afraid of not being able to pay your mortgage and being foreclosed on, you're not going to worry about making your home more energy efficient," Pollin notes.
Even if homeowners are on top of their mortgage, they're reluctant to invest in their homes while values are falling. A lot of the low-hanging fruit, like improving insulation and sealing leaks around windows, can pay off in three years or so. But that's not quick enough for strapped homeowners. "People are nervous about making improvements to their homes unless they see the payback right away," says Schmidt of the NAH.
But the Green Recovery isn't necessarily a bust. Pollin does see some of these jobs being created. And, he says, the need for energy efficient upgrades is uniform across the country. "If you look in any neighborhood, 70 to 80 percent of the buildings would benefit from retrofitting," he says.
In the Northeast much of the work centers on keeping homes warmer during the winter, he says. But in the Southwest, where construction jobs have been especially hard hit, homeowners can make their air conditioning ducts more efficient, replace old window panes with newer UV filtering glass and, if they are willing to invest in a longer term payoff, add solar panels for heating hot water and generating electricity.
Pollin and Schmidt expect to see a slow but steady increase in work from these kinds of projects as the job and housing markets stabilize, consumer credit loosens up and confidence returns. Home appraisers and mortgage lenders have to understand how energy-related features add value to a home and free up money in one place (energy bills) that can support the bigger mortgage needed to finance these upgrades. But both believe that will happen, albeit more gradually than out-of-work electricians and carpenters would like.
To see a bigger boom in green collar construction jobs more quickly, Pollin says, the government should redirect stimulus money toward retrofitting public buildings, most of which could benefit from it. "You'd get bigger construction companies involved in the work so there would be large-scale job creation," he says.
"It would be high profile work, too, so that would raise awareness," which would help things like appraisals and mortgages that recognize these upgrades to come on line. "Then the residential market might really start to move," he says. And with it, perhaps, some of those construction workers who have been sitting around way too much lately.