Jobs are costs, not benefits


As I've been saying here and elsewhere for a number of years now. Jobs are costs of a plan, not a benefit of one. No, not claiming credit for this simple point being made by another, just noting that it is being made in this excellent report on green jobs.

The first level is that of projects or programmes. Here he makes the fundamental point that in appraising these, prospective labour inputs are to be viewed as a cost not a benefit: labour costs should be counted as such, along with other inputs (such as energy). Hughes notes that if the objective of policy is to reduce CO2 emissions, the right course of action is to minimise the costs of any such reduction; and these include the costs of labour.

The report is worth reading in full for it also goes on to examine the role of "green jobs" in the macroeconomic sense.

Please do note that the thrust is not that "there's no climate change so we don't have to do anything so Yah Boo Sucks! Greenies!". Instead it's the much more subtle points that, as above, jobs are a cost not a benefit. We should not applaud a specific anti-climate change policy because it "creates more jobs", this is entirely the wrong way around. We want to, just as in any other economic adventure, perform the task, that minimization of climate change, at the least cost in resources, whether those resources be labour,capital, energy or anything else.

On the macro side, here we are in Bastiat territory. Sure, we can see those jobs being created building windmills. However, how many other jobs in the economy are being destroyed by higher energy costs? Those higher energy costs we have to suffer to employ the people to build the windmills? The Spanish experience has been 2.2 jobs lost for every one created: that's on a generous interpretation of the results.

I know that I'm a little out of step with many on this climate change thing. I annoy one group by being quite willing to believe that it's happening and perhaps we should do something about it. I annoy those who agree with me there by continually pointing out that most plans floated to "do something" are appallingly awful and would ashame three year old children if they were to propose them.

Which is, if I am to be honest, why I like this report so much. The argument is that if we are going to do something can we at least make sure we don't do this long list of very stupid things that people are currently proposing? Please?

Sounds like a plan to me.