Will Cap and Trade Put Mom and Dad on an Allowance?

Charlotte Hays
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Posted: Aug 23, 2010 1:36 PM
Perhaps you have never considered becoming a solar panel installer.

But passage of cap and trade legislation, now stalled but not dead, would mean that many working Americans, now productively employed in the manufacturing sector, could find themselves learning to install solar panels—at taxpayer expense.

Should the Democrats breathe new life into cap and trade, nobody knows exactly what form the legislation would take. Whatever form, however, good jobs will be lost. Families will be faced with the kind of demoralization that comes from underemployment or having the head of the household engaged in what essentially is paid busy work.

The Waxman-Markey bill, for example, the House version of cap and trade, accepts that layoffs are inevitable and simply tries to make them more palatable. A “climate change adjustment allowance” was included in the legislation. Any worker who is laid off because of cap and trade is eligible for the allowance. It will amount to 70 percent of what the worker was earning. And, if you think paying unemployment benefits for 99 weeks is bad, get ready for 156 weeks!

A family could find itself living for three years on 70 percent of what Mom or Dad was previously earning, with no guarantee that a real job would be available when the allowance expired. Think what this would mean for a family trying to save for college, to buy a house, or simply to get by. A three-year stint of being unemployed isn’t just hard on the family finances. Skills atrophy, and, perhaps most important, unemployment can change a family’s dynamics.

Most energy bills have some kind of provision to deal with the unemployment cap and trade will create. If, for example, somebody who loses a job doesn’t get an allowance (doesn’t the very notion of allowances for adults sound infantilizing?), he or she may be eligible instead for retraining—hence installing those solar panels!—or some form of busy work reminiscent of the WPA that provided income during the Great Depression. You might, for example, says Myron Ebell, director of energy and global warming at the Competitive Energy Institute, get work caulking holes in federal buildings.

“I don’t see that as high paying or a genuine career,” said Ebell.

Still, paying the caulkers, while depressing for the workers themselves, might do less harm to the economy than training people for “green jobs.” It turns out that you can create all kinds of green jobs, if you are willing to fork over the money, but you can’t make them economically self-sustaining. They can keep going only as long as we subsidize them. Los Angeles, for example, decided to become a solar capital. Solar panels on a house cost up to $20,000, with the city picking up half. So far, most people in Los Angeles are still turning on the lights the old-fashioned way.

A green job is likely to last only as long as the taxpayer is willing to pick up the tab. Meaningless work of digging holes and filling them up again—let’s call it the WPA-style of work—may even be less of a drag on the U.S. economy than creating short-lived green jobs that skew the marketplace and steer resources away from actual productive activities.

Of course, proponents of cap and trade foresee a world of new green jobs replacing dirty old manufacturing jobs. They see new energy ventures extending employment opportunities to countless citizens. It is a rosy scenario. Realistic thinkers just see devastating job loss, not permanent green jobs. David Kreutzer of the Heritage Foundation points out that some greenies have even tried to repackage global warming legislation as a jobs bills. It was a desperate reach. Kreutzer noted a study by the Center for Data Analysis at The Heritage Foundation found that restrictions on CO2 would result not in an increase in employment, the product of new green jobs, but rather significant job losses. “In some years, employment losses from the Lieberman-Warner restrictions would be 900,000 jobs. These job losses are net of any ‘green’ jobs that are created,” he wrote.

Moreover, the quest for green jobs, at the expense of jobs that are already sustaining themselves, will mean that the government is picking winners and losers in our economy. This, said Ebell, could lead to “permanent stagnation.” “It’s not only a government drain on economic growth—it’s a drain on economic creativity,” he says. “You don’t get creative transformations from government but from the free market.”

We’ve learned a lot in the last few years about the toll of high unemployment, and we know it’s not just economic. “You take my life when you do take the means whereby I live,” William Shakespeare wrote.

Why would we want to take the means whereby countless citizens live for the sake of legislation most citizens don’t want?

Charlotte Hays is a Senior Fellow at the Independent Women’s Forum.