By Rob Wolcott
As citizens and world leaders converge on New York City seeking a way to address climate change, across the U.S. tens of millions are also out of work. The political challenge of achieving a climate policy consensus is hard. There is no broad agreement that the U.S. even has a climate problem. But there is bedrock consensus that we have an unemployment problem, and tackling it may be one of the best ways to help the climate.
Monthly jobs reports indicate U.S. unemployment a little over 6 percent, representing about 11 million people. But that ignores at least another 10 to 12 million Americans who want to work, but are so dejected by the lack of jobs that they have given up looking. The labor force participation rate (the percent of healthy, working-aged adults with jobs) is 62.8 percent, the lowest in 35 years. That means almost 40 percent of Americans are jobless — many by choice, but many, many others for lack of opportunities.
Factors driving this crisis include a skills/needs mismatch, labor-saving mechanization, globalization, a hangover from the Great Recession and a chronic, self-inflicted problem of double taxation of labor. On top of personal income taxes, our payroll taxes raise hiring costs and encourage employers to use more energy and less labor. Labor and energy/materials are relative substitutes in the overall economy: In general, the more a business uses one, the less it uses the other.
That’s why, even though at first glance jobs and climate seem to be distinct policy questions, they are in fact deeply intertwined. For more than a century through tax policy and other means, development and use of fossil fuels have been incentivized and subsidized. Today with only 5 percent of the global population, the U.S. consumes 20 percent of the world’s fossil fuels. Fees or taxes on energy would cut greenhouse gas emissions more efficiently than regulation, yet we’ve failed to put a price on carbon, and therefore failed to curb energy consumption driving climate change.Click to continue reading »