Archive for the ‘Green Jobs’ Category

$2.6 Billion Spent on Cleaning Up DC Rivers Must Address Local Job Creation

June 7, 2013

SinkorSwim_WebBoxOver the next decade, DC Water will use a regressive Impervious Area Charge (IAC) to fund $2.6 billion in needed water infrastructure investments. Middle- and low-income residents and neighborhoods will carry the highest burden of the DC Water fee increase that will pay for these improvements.

Despite the fact that the funding burden of these projects falls heavily on the most vulnerable residents, DC Water has not implemented a local hiring agreement, even though putting residents to work on the project may be the best way to reduce the harm of a regressive fee. These are among the findings of Sink or Swim? Who will pay and who will benefit from DC Water’s $2.6 billion Clean Rivers Project?, a study published this week by Good Jobs First.

More coverage of the report can be found over at the Washington Post and the Washington City Paper’s Housing Complex Blog.

Cities rarely spend so much — $2.6 billion — on infrastructure projects. A strong Community Benefits Agreement could make this public infrastructure investment provide a jobs stimulus benefit to District residents without spending an additional dollar. A proposed Community Benefits Agreement (CBA), like the District’s amended First Source Law, would establish a minimum percentage of work hours that must be performed by District residents, increasing to 50% over the next decade.

The report was commissioned by the Washington Interfaith Network (WIN) and The Laborers’ International Union of North America (LIUNA).

Among the major findings:

  • The impact of the IAC – measured as a share of 2013 property taxes – will be four- to five times greater for homeowners in poor neighborhoods than for those in affluent neighborhoods.
  • Small businesses, especially those east of the river, will feel a heavy burden from IAC fees. Office buildings on K Street will feel little impact.
  • There is no indication that District residents will benefit in proportion to their burden. Contractors on major DC Water projects currently employ more North Carolinians than residents from Wards 7 & 8 combined. Over half the contractor workforce lives outside Washington, D.C. and its immediate surroundings.
  • Continued failure to hire local residents will result in a massive transfer of wealth out of the District. We estimate that over the next thirty years, D.C. ratepayers will be billed $4.2 billion in IACs, including $1.1 billion from Wards 7 and 8 alone.

District residents will pay for these infrastructure investments through a regressive fee for the next thirty years. Low- and middle-income residents will be hit the hardest. These are neighborhoods that have historically been excluded from opportunities in construction careers; to not leverage $2.6 billion in public spending for District construction careers would represent a tremendous missed opportunity.

Posted in Community Benefits Agreements, Economic Recovery, Green Jobs, Jobs, Property Taxes, Smart Growth, Taxes, Washington DC | Leave a Comment »

Oregon Ramps Up Transparency, Looks to Rein In Subsidies

June 14, 2011

The past couple of months have brought broad changes to economic development tax credit policy in Oregon.  Last month the state enacted major tax credit transparency practices when Gov. Kitzhaber signed into law House Bill 2825, which requires company-specific disclosure of tax credit recipients.  Also up for consideration in the state legislature’s final days is House Bill 3671, which if passed would reduce available business tax credits from approximately $40 million to $10 million annually and make significant structural changes to the contentious Business Energy Tax Credit (BETC) program.

The new transparency law, which was pushed by groups such as OSPIRG, requires state agencies responsible for administering economic development subsidies to disclose via Oregon’s transparency website information about recipients, including their names, addresses, subsidy values, and performance measures.  Programs covered under this law include the controversial manufacturing and renewable energy components of the BETC program, the state’s enterprise zone program, and contributions to the film production development fund, among others.  The law will go into effect later this year.  Oregon scored zero on Good Jobs First’s recent 51-state subsidy disclosure study, Show Us the Subsidies, for its failure to disclose company-specific recipient information for any of its major economic development programs.

As in other states, Oregon’s revenue crisis has forced the state to consider reducing and in some cases eliminating business tax credit programs.  HB 3671 would end the practice of subsidizing construction of major solar and wind production facilities through the BETC program.  It does not completely eliminate subsidies for manufacturers of solar energy equipment and energy conservation activities, but replaces existing subsidies with a set of smaller, more targeted programs.  The bill additionally proposes reducing the total value of business tax credits from the projected $40 million biennially at the state’s current rate to $10 million.  The measure has reportedly gained broad support, although Gov. Kitzhaber has proposed raising the cap to $25 million.

Both of these measures will move the Oregon’s economic development practices toward greater accountability and ultimately, more effective job creation and energy conservation policy.

Posted in Disclosure, Enterprise Zones, Green Jobs, Jobs, Subsidies | 2 Comments »

The Recovery Act: The Transparency Gift that Keeps on Giving

February 18, 2011

Largely lost in the partisan bickering over the stimulus has been the law’s enormous positive impact on improving government transparency. The American Recovery and Reinvestment Act of 2009 (ARRA) is not just the most transparent federal spending bill in U.S. history—the changes it pioneered will endure even after the stimulus winds down.

By now, many curious Americans have explored spending and job-creation on ARRA projects in their communities at recovery.gov. About 35 percent of ARRA funding is revealed there: every grant, loan and contract. And the reporting extends beyond the primary recipient one level down to sub-recipients. But few people noticed that the Office of Management and Budget applied that extended reporting to the main federal disclosure website USAspending.gov (created thanks to a bill championed by then-Senator Obama).

Even fewer people noticed that the quality of ARRA data improved greatly in October 2010: we can now trace the money as it changes hands three times, instead of two, to sub-sub-recipients. For people concerned about companies tied to political contributions, offshoring of jobs, violations of workplace laws, etc., this deeper data is a potential gold mine for accountability.

In a little-noticed provision, the Recovery Act also required privately-held companies that do a large share of their business with the federal government to reveal the compensation of their five highest-paid executives. We blogged about this when the first round of data came out, revealing executive pay at the high-profile “Beltway Bandit” consulting firm Booz Allen Hamilton.

The Recovery Act has also enabled a side-by-side analysis of transportation spending—comparing job creation from highway-building versus public transportation—that was simply not possible before: apples-to-apples data did not exist. However, in early 2010 Smart Growth America, the United States Public Interest Research Group and the Center for Neighborhood Technology issued “What We Learned from the Stimulus,” finding that transit construction creates 84 percent more work-months than does highway-building. That reinforced our own 2003 finding, in “The Jobs Are Back in Town” that smart growth creates more work for Building Trades union members than does sprawl.

ARRA data and the mapping functions at recovery.gov have also encouraged more people to think about the geographic distribution of government spending (one of our pet peeves here at Good Jobs First). For example, the Voices of California Coalition examined ARRA spending by local jurisdiction and found many hard-hit communities getting little if any dollars and jobs.

In New York City, Community Voices Heard coupled ARRA jobs data along with data from the local public housing authority and its own door-to-door survey work to prove that, despite HUD Section 3 rules intended to ensure that public housing residents get job opportunities when their residences are rehabilitated, very few ARRA-funded jobs went to New York City Housing Authority residents. See “Bad Arithmetic.”

In Texas, the Center for Public Policy Priorities reported on that state’s performance on weatherization spending and Policy Matters Ohio mapped where clean energy jobs were created, finding they were “well targeted to areas of economic distress.”

Finally, we here at Good Jobs First have closely monitored how state governments have mirrored Uncle Sam’s ARRA transparency boost, publishing two “report card” studies on state government Recovery Act websites. Every single state put up such a website—even though they had no legal obligation to do so!

Of course, the states did have more obligations than anyone else to provide ARRA jobs data, since so much of the money flows through state agencies, making them primary recipients. So it was no exaggeration to call ARRA “a giant crash course on disclosure for state governments.” And lo and behold, in December 2010 when we revisited the issue of how well state governments disclose their own spending for job creation, we found the number of states naming names online had jumped from 24 to 37.

Posted in Climate Issues, Disclosure, Economic Recovery, Federal Job Subsidies, Green Jobs, Jobs, Smart Growth, Transit | 1 Comment »

Evergreen Solar Turns Out the Lights

January 24, 2011

Massachusetts Governor Deval Patrick and Evergreen Solar's CEO, Richard M. Feldt (Boston Globe 2008)

Evergreen Solar announced this month that it would shutter its solar wafer and cell production plant in Devens, Massachusetts despite the generous $58 million it received in subsidies from the state.  Eight hundred workers will lose their jobs by the end of March this year.  The company is moving its manufacturing operations to China, where it will enjoy higher levels of government subsidies in the form of low-interest loans and factory wages averaging less than $300 a month.

When you compare a $300 monthly salary with an average Massachusetts factory worker salary of $5,400 a month, it’s little wonder that the subsidy awarded by Massachusetts makes little difference in the company’s long term business strategy – especially given the fact that Evergreen will be able to take most of the money and run.  Of the $58 million award, $13 million was provided through an infrastructure subsidy, $21 million in the form of direct grants, and the remainder was provided in tax credits.  Massachusetts officials stated that the state stands to recoup only $3 million of its $21 million grant, even though Evergreen constructed its factory just two years ago.

In its rush to bag a green trophy business, Massachusetts neglected to attach job creation requirements to the majority of the subsidy.  Only $20 million of the total award contractually required that jobs be created at all.  (For more on green job quality and job creation, including the Evergreen Solar deal, see Good Jobs First’s 2009 publication “High Road or Low Road:  Job Quality in the New Green Economy.”)

It’s never fun to say “I told you so” when the subject is economic development subsidies because it is so often the case that workers will be losing their jobs, so we’ll focus instead on the takeaways:

  1. Job creation subsidies provided to companies that have a history of outsourcing manufacturing jobs are a dangerous bet.
  2. When a company can retain nearly 90 percent of its development subsidy after operating for just two years, it’s time for stricter clawback requirements.
  3. Attempts to combat global market forces and federal trade policy with state tax subsidies are ineffective and wasteful.

After Massachusetts’s experiences with Raytheon and General Electric, one might think they would have learned these lessons by now.

Posted in Clawbacks, Green Jobs, Job Quality Standards, Jobs, Subsidies | 3 Comments »

Report: U.S. Must Do More to Prevent Loss of Clean Energy Manufacturing Jobs

March 4, 2010

The United States must commit to developing a domestic manufacturing sector capable of meeting heightened demand for the parts, systems and components of the growing clean energy economy, a strategy that is key to ensuring that federal clean energy investments create quality, high-paying jobs in the United States. This would avoid indirectly subsidizing the growth of those activities in low-wage countries such as China that are emerging as key competitors in the race to lead the global clean energy economy. This is the conclusion of Winning the Race: How America Can Lead the Global Clean Energy Economy, a report released today by the Apollo Alliance and Good Jobs First at a Washington, D.C. conference.

“The United States is currently importing about 70 percent of its renewable energy systems and components,” said Phil Angelides, chairman of the Apollo Alliance. “If that trend continues, we stand to lose out on estimated 100,000 clean energy manufacturing jobs by 2015, and nearly 250,000 by 2030. This country needs a comprehensive clean-energy economic development strategy so we can ensure that jobs being created in the clean-energy sector stay in America.”

“The U.S. needs a comprehensive strategy, including safeguards to ensure that increased demand for renewable energy systems doesn’t simply create manufacturing jobs in low-wage havens,” said Good Jobs First Executive Director Greg LeRoy. “In the same way Ohio wouldn’t knowingly subsidize job growth in Iowa, Uncle Sam needs to watch the store and ensure a good return on American investments in clean energy.”

Winning the Race illustrates this risk by analyzing the recipients of the Recovery Act’s Advanced Energy Manufacturing Tax Credit (also known as 48C credits), which President Obama recently proposed expanding funding for by $5 billion due to the program’s success. The report finds that, of the 90 companies that received 48C credits for wind and solar manufacturing projects in the United States, 23 have also been investing in similar production in countries such as China, India, Mexico and Malaysia. The 23 companies, which include both U.S.-based and foreign firms, received a total of $458 million in 48C credits for their U.S. projects.

“A portion of this offshore investment is meant to serve foreign markets,” said Good Jobs First Research Director Philip Mattera, who analyzed the 48C recipient list for the report. “But these examples demonstrate that the U.S. share of the global clean energy economy – particularly in manufacturing – is far from guaranteed.  48C projects have helped stimulate the clean energy manufacturing sector, but some recipients are putting their primary emphasis on low-wage production for the entire global market.”

To address this risk, Winning the Race recommends a comprehensive strategy to create jobs in the clean energy economy through the entire supply chain. The first step is to ensure an expanded and consistent market for clean energy by passing comprehensive clean energy and climate legislation, and then to expand domestic clean energy manufacturing by:

  • Increasing the Advanced Manufacturing Tax Credit by $5 billion, as the president proposed in his FY2011 budget, but adding “clawback” provisions that would enable the federal government to recoup the tax credits if 48C jobs end up being sent offshore.
  • Enacting the “Investments for Manufacturing Progress and Clean Technologies (IMPACT) Act,” which would support small and mid-sized manufacturers by providing capital for investments in energy efficiency and for retooling and expanding into the clean energy supply chain.
  • Investing in the creation of a well-trained workforce that meets the needs of U.S. clean energy manufacturers and would make onshore investment more attractive.

The full report is available for download at www.apolloalliance.org and at www.goodjobsfirst.org.

Posted in Economic Recovery, Green Jobs | Leave a Comment »

ARRA as a Corporate Rescue Plan

February 19, 2010

A war of words is raging over the impact of the Obama Administration’s $787 billion stimulus program, which is now one-year old. Conservative members of Congress are mounting a relentless assault on what they see as an abject failure, even as many of them unabashedly promote and at least implicitly take credit for individual American Recovery and Reinvestment Act (ARRA) projects in their home districts.

Meanwhile, the office of Vice President Joe Biden has issued a report insisting that ARRA has created or saved 2 million jobs and has brought many states back from the brink of fiscal disaster. The stimulus effort, Biden insists, “is going well.”

The debate boils down to an age-old disagreement between those opposed to allegedly wasteful social spending and those who believe government has to reinforce the social safety net during a time of economic distress.

Both sides are ignoring the fact that ARRA, to a significant degree, is a rescue plan not just for unemployed workers and struggling state governments, but also for parts of corporate America. This goes far beyond the roughly $50 billion in business tax breaks that Republicans last year insisted be part of the plan.

The Recovery Act represents a big step in the direction of what was once called industrial policy. Billions of ARRA dollars are being used by the federal government to encourage the development of new industries in areas such as renewable energy and health information technology that are seen as the foundation of future economic growth. Billions more are being spent on traditional procurement contracts to boost private-sector activity.

Here are some examples of larger injections of ARRA funds going directly to the corporate sector:

ADVANCED ENERGY MANUFACTURING TAX CREDITS

Hemlock Semiconductor, a joint venture of Dow Corning (itself a joint venture of Dow Chemical and Corning Inc.) and two Japanese companies: $141 million for the production in Michigan of polycrystalline silicon used in solar panels.

Wacker Polysilicon North America LLC, a subsidiary of the German chemical company Wacker Chemie: $128 million for a plant in Tennessee that will produce polysilicon for solar cells.

United Technologies Corporation, the big military contractor: $110 million for new equipment at its Pratt & Whitney plants to help produce more energy-efficient jet engines.

Alstom, the big French power and transportation equipment firm: $63 million for a Tennessee facility that will produce the world’s largest steam turbines for nuclear power plants.

GRANTS FOR DEVELOPMENT OF ADVANCED BATTERIES FOR ELECTRIC VEHICLES

Johnson Controls: $299 million for work on nickel-cobalt-metal battery cells

A123 Systems Inc.: $249 million for work on nano-iron phosphate cathode powder and electrode coatings.

General Motors: $105 million for production of high-volume battery packs for the GM Volt.

“CLEAN” COAL POWER INITIATIVE

American Electric Power Company: $334 million for the development of a chilled ammonia process to capture CO2 at a power plant in West Virginia.

Southern Company Services: $295 million for the retrofitting of a CO2 capture installation at a coal-fired power plant in Alabama.

BROADBAND EXPANSION

ION HoldCo LLC, a partnership led by Sovernet Communications: a $39 million grant to expand fiber-optic broadband in rural areas of upstate New York.

Biddeford Internet Corp. (dba GWI): a $25 million grant to extend a fiber-optic network to rural and disadvantaged parts of Maine.

ENERGY LOAN GUARANTEES

Solyndra Inc.: a $535 million loan guarantee to support the construction of a commercial-scale manufacturing facility for cylindrical solar photovoltaic panels.

PROCUREMENT CONTRACTS

Lockheed Martin: $165 million to work on the crew vehicle for NASA’s Project Orion.

Clark Construction Group: $152 million to design and build a new headquarters for the U.S. Coast Guard in Washington, DC.

General Motors: $104 million to supply light trucks, station wagons and alternative fuel vehicles to the General Services Administration.

GlaxoSmithKline: $62 million from the Department of Health and Human Services to do research on the H1N1 flu vaccine.

To this list can be added the thousands of contracts that states have awarded to private companies to carry out ARRA-funded activities such as highway repair, school construction and environmental remediation.

It is surprising that there has been so little debate on the relative merits of all these projects and programs – as well as on the wisdom of providing direct subsidies to profit-making entities. Are these grants, contracts, tax credits and loan guarantees a smart investment in the future or nothing more than business boondoggles?

With a significant portion of the Recovery Act going to aid corporations, we also have a right to ask why they are not creating more jobs with the taxpayer funds they have received. It would also be helpful to know – though the limitations of ARRA data collection make this difficult – how good are the jobs that have been created (in terms of wages and benefits) and whether those jobs are being equitably distributed among different portions of the population.

If we are ever going to reach any meaningful conclusions about the whole stimulus endeavor, we’ve got to go beyond tired debates about Big Government versus the Free Market. Like the bailout of the banks and the auto companies, ARRA is changing the relationship between the public and private sectors. Now we need to know whether the new arrangement is working and who is reaping the benefits.

Reposted from the Dirt Diggers Digest

Posted in Economic Recovery, Green Jobs, Subsidies | Leave a Comment »

Green Jobs are Not Always Good Jobs

February 3, 2009

greencoversmallerAs the federal government prepares to spend billions of dollars promoting the creation of green jobs as part of the huge economy recovery bill, a new report warns that the jobs already being created in climate-friendly sectors of the economy do not always measure up in terms of wages and other terms of employment. The report, entitled High Road or Low Road: Job Quality in the New Green Economy, was produced by Good Jobs First (yours truly was the principal author). It was commissioned by the Change to Win labor federation, the Sierra Club, and the Teamsters and Laborers unions.

Many proponents of green development assume that the result will be good jobs. The report tested that assumption and found that it is not always valid. This is based on an examination of three sectors: manufacturing of components for wind and solar energy generation; green building; and recycling. In each sector, we found examples of employers that compensate their workers decently and treat them with respect. These include the Gamesa wind equipment manufacturing operations in Pennsylvania; developer Gerding Edlen’s commercial and residential construction projects centered in Portland, Oregon; and Norcal Waste Systems’ Recycle Central operation in San Francisco.

Yet we also found examples of purportedly green employers paying substandard wages and not treating their workers well. These include at least two wind energy manufacturing plants—one run by Clipper Windpower in Iowa and another run by DMI Industries in North Dakota—where workers initiated union organizing drives in response to issues such as poor safety conditions and then faced strong union-busting campaigns by management. Some U.S. wind and solar manufacturing firms are weakening the job security of their workers by opening parallel plants in foreign low-wage havens such as China, Mexico and Malaysia.

The report finds that many wind and solar manufacturing plants are receiving sizeable economic development subsidies from state and local governments. This use of taxpayer money provides an opportunity to raise wages and other working conditions. Many states and localities already apply job quality standards to companies receiving job subsidies or public contracts. In the report we urge wider and more aggressive use of such standards by federal as well as state and local agencies. The report offers other public policy options and urges the private U.S. Green Building Council to consider adding labor criteria to its widely used LEED standards for green construction.

The overall message is: green jobs are not automatically good jobs. We have to make them so.

Note: This item is crossposted on our sister blog Dirt Diggers Digest.

Posted in Green Jobs | 2 Comments »