Spotlight Exclusives

August 10, 2009: Green Jobs and Low-Wage Workers, By Karin Martinson, Senior Research Associate, Center on Labor, Human Services, and Population, the Urban Institute

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“Green jobs” has become a rallying cry across the recession-plagued countryembraced as a way to lower dependence on foreign fossil fuels, increase energy efficiency, promote renewable energy sources to fight climate change, and create economic opportunities for workers and business.

At first a campaign issue, the Obama Administration۪s investment in a green economy has become a reality with the American Recovery and Reinvestment Act of 2009 (ARRA). The act provides $80 billion in direct spending, loan guarantees, and tax incentives for green industries and over $48 billion in job training and educationsome specifically for training for green jobs. Estimates of the number of jobs created through these the new investments range from zero because jobs in fossil-fuel related sectors would fall commensurately to over 1.7 million new green jobs through an investment of $150 billion.

Exact numbers of jobs created aside, it۪s unclear if and how low-income and low-skilled individuals will benefit from this significant public investment in green jobs. Even before the current economic crisis, those on the low rungs of the economic ladder fared poorly. Earnings have fallen over the past two decades for those with no more than a high school diploma, and few low-wage workers have experienced significant and lasting wage increases.

Thus, the challenge now is ensuring that the most vulnerable individuals low-income low-skilled workers gain from any new investments in the U.S. economy.

First let۪s look at what qualifies as a green job.While there is no official definition or classification of green industries and occupations, the general consensus is that green jobs involve renewable energy, energy-efficiency products, home retrofitting, biofuel development, public transportation, and environmental cleanup.

With low-wage individuals۪ employment futures in mind, it is important to recognize that many jobs in these emerging “green industries” wind, solar, biofuel, green building, sustainable agriculture, etc. differ little from those in traditional industries. Manufacturing of new green-related products will demand machinists, technicians, and metal workers. Green construction and retrofitting will require electricians, equipment installers, carpenters, equipment operators, building inspectors, truck drivers, and welders. While some jobs may have to be updated or retooled, many of the “green jobs” are not substantively new, and skills from jobs in troubled industries may be transferrable.

Another critical question is whether green jobs are actually good jobs. In short, would getting one help a low-income individual support a family and move up the economic ladder? Here, the answer is yes and no. Some green-related jobs will continue to be low-paying, affording little opportunity to advance. Green drivers, assembly-line workers, and some construction workers will earn less than $15 per hour.

Upgrading jobs like these requires changing labor agreements and wage standards. Taking an important step in this direction, the Obama Administration recently started requiring all contractors receiving ARRA funds to pay laborers and mechanics the prevailing wage, or as least as much as workers on similar projects in the same region. With $49.3 billion for transportation construction and $5 billion for home-weatherization projects for low-income families, this ruling will impact a significant number of jobsand low-wage families.

But more is needed to help low-skilled individuals move toward greater economic security. There are “good” green-related jobs out there, jobs that Urban Institute researchers describe as “middle-skill” jobs, requiring some post-secondary education but not a four-year degree. Most such jobs pay above $15 per hour, and many provide benefits. These include occupations such as metal workers, welders, electricians, carpenters, equipment operators, iron and steel workers, and technicians.

Expanding low-skilled, low-wage individuals۪ access to these “middle-skill” green jobs requires investments in education and training. Recessions, with their tight competition for jobs, present opportunities for unemployed low-skilled individuals to get the training they need move ahead. To work, green training programs need to be customized to meet this population۪s needs. Too often, training programs do not work well for those with low earnings because the combination of high tuition, family obligations, work schedules, and a lack of access to support services makes it difficult for low-skilled individuals to work, go to school, and care for their family.

There are, however, strategies that show promise in making training possible for low-skilled individuals, whether in green jobs or not:

First, it is important to develop curricular reforms at community colleges and other training providers. For instance, “bridge programs” increase access of low-skill individuals to higher levels of training and “modularized curricula” allow low-income students to combine work and education or cycle in and out of programs.

Second, close partnerships between employers and training providers are crucial. These partnerships will ensure that training is strongly linked to employer needs, and will help to develop career paths that lead to higher-paying jobs. Realistically, all green-related jobs won۪t suddenly be in high demand, and states and localities must work closely with business to ensure that newly trained workers have jobs waiting for them..

Finally, providing financial assistance beyond Pell Grants will help low-wage workers afford school and meet their expenses. This would mean expanding assistance programs to include those who are typically not eligible, particularly those without a high school diploma or part-time students. And stipends for meeting program benchmarks and for course completion have also been shown to increase persistence in training programs.

In the past, the nation۪s workforce system, established by the Workforce Investment Act (WIA), hasn۪t always provided the access to the jobs, training, and supports that low-income workers need, largely due to severe underfunding. However, even in these difficult times, the additional infusion of resources and direction provided by ARRA offers a unique opportunity to rebuild and improve.

Considerable ARRA funding for retraining unemployed or displaced workers is available through the Workforce Investment Act. Additionally, the supplemental ARRA funds for youth could be invested in training young people for the green industries now emerging or likely to expand soon. Department of Labor guidelines on the use of ARRA funds urge the workforce system to deploy these new resources to develop innovative strategies, such as those discussed above, including developing career pathways that align training programs with jobs and industries important to local and regional economies.

Importantly, several new ARRA-funded Department of Labor grant programs give resources to states and localities to develop partnerships to provide training in green industries, and one grant program (the Pathways out of Poverty Grant Program) is specifically aimed at training low-income populations. Beyond that, the Department of Energy is using the new influx of weatherization funds partly to invest more in job training. While the Obama Administration۪s $12-billion new proposal to reform the country۪s community college system would provide additional funds for the training innovations discussed here if it were enacted, ARRA gives states and localities resources for moving ahead right away, particularly in green industries.

Federal guidance and resources can only go so far, of course. The real action of green job development and training will be regional and local. To succeed, state and local workforce development agencies must reposition their services to meet the immediate green jobs challenge. As successful models in New York City, Newark, and Los Angeles have already shown, it۪s essential that local green jobs initiatives place priority on low-wage and low-skilled adults and youth and retool training programs to meet these groups۪ needs. It is also important to bring women into “green” occupations, such as construction and manufacturing, long dominated by men.

Without clear leadership and direction from state and local policymakers and officials, and without a willingness to take advantage of the unique opportunities that are available in this period, workers with less experience and lower skills are likely to find themselves at the end of a very long queue of more experienced job-seekers, unable to move ahead even when the economy recovers..

Karin MartinsonisSenior Research Associate at the Center on Labor, Human Services, and Population at the Urban Institute

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