"In an April 25 New York Times article (“Today’s Energy Jobs Are in Solar, Not Coal“) reporter Nadja Popovich wrote that “Last year, the solar industry employed many more Americans [373,807] than coal [160,119], while wind power topped 100,000 jobs.” Those energy employment figures are based on a Department of Energy report (“U.S. Energy and Employment Report“) released earlier this year that provides the most complete analysis available of employment in the energy economy.
But simply reporting rather enthusiastically (see the NYT headline again) that the solar industry employs lots of Americans, more than twice as many as the number of coal miners and utility workers at electric power plants using coal, is only telling a small part of the story. Here are some important energy facts that help provide a more complete picture about how much energy is being produced in different sectors, how many workers it takes to produce a given amount of electric power, and which sectors receive the most generous taxpayer handouts.
To start, despite a huge workforce of almost 400,000 solar workers (about 20 percent of electric power payrolls in 2016), that sector produced an insignificant share, less than 1 percent, of the electric power generated in the United States last year (EIA data here). And that’s a lot of solar workers: about the same as the combined number of employees working at Exxon Mobil, Chevron, Apple, Johnson & Johnson, Microsoft, Pfizer, Ford Motor Company and Procter & Gamble.
In contrast, it took about the same number of natural gas workers (398,235) last year to produce more than one-third of U.S. electric power, or 37 times more electricity than solar’s minuscule share of 0.90 percent. And with only 160,000 coal workers (less than half the number of workers in either solar or gas), that sector produced nearly one-third (almost as much as gas) of U.S. electricity last year.
The graphic above helps to quantify the significant differences in electric power output per employee for coal, natural gas and solar workers. In 2016, the coal sector generated an average of 7,745 megawatt hours of electric power per worker, more than twice the 3,812 megawatt hours of electricity generated per natural gas worker, and 79 times more electric power per worker than the solar industry, which produced only 98 megawatt hours of electricity per worker. Therefore, to produce the same amount of electric power as just one coal worker would require two natural gas workers and an amazingly-high 79 solar workers.
Bottom Line: The goal of America’s energy sector isn’t to create as many jobs as possible (as the NYT article would apparently have us believe) especially the politically-favored and heavily-subsidized renewable energy jobs. Rather, the economic goal is to produce as much electric power as possible at the lowest possible cost, and that means we want the fewest number of energy workers!
It’s a common mistake of politicians and the media to treat jobs as an economic benefit, when in fact, jobs are an economic cost or price of production. As Milton Friedman explained nearly 40 years ago, the appropriate economic objective is to have the fewest number of workers producing the greatest amount of output. When it comes to solar energy, we are employing a very large number of workers who produce a very small amount of electric power – a sure sign of economic inefficiency.
As the graphic above clearly demonstrates, today’s most productive energy workers are in coal and natural gas, not solar. And there’s only one reason that the solar workforce has been increasing so rapidly (25 percent gain last year) despite its dismal record of worker productivity and minuscule share of U.S. electric power — government policies that have subsidized the solar industry nearly 350 times more than fossil fuels per unit of electricity production.
Only in the fantasy world of the Beltway does it make sense to spend billions of taxpayer dollars to artificially support an energy source that is so labor-intensive that it requires a workforce 79 times greater per unit of energy produced than coal, and nearly 40 times greater than natural gas. If I could re-title the New York Times article, I think a better choice would be “Today’s Most Productive Energy Workers are in Coal and Gas, Not Solar.”
This article was originally published by the Washington Examiner.
HTs: Gale Pooley for his important contribution to the concepts of the post and graphic, and AEI’s Olivier Ballou for designing and creating the graphic."
Saturday, August 19, 2017
Inconvenient energy fact: It takes 79 solar workers to produce same amount of electric power as one coal worker
From Mark Perry.
By Jonathan Wood of PERC.
"Forests have long been hotspots (pardon the pun) for environmental conflict because so much of their use is determined politically. In the United States, for instance, many economic uses of forests cannot proceed until running the gamut of environmental study, permitting, and litigation. That red tape has harmed not only the timber industry but also interfered with efforts to reduce fire risks, harming neighbors and forest ecosystems.
The impacts on fire risks have been significant. Over the last twenty years, wildfires in the United States have become more extreme, caused more damage, and been more costly to maintain. The Department of Agriculture predicts that, by 2050, the number of acres burned annually could triple. The causes of increased fire risk are complex, but one factor is the increased fuel due to restrictions on timber harvesting and past fire suppression activities. Fires cause significant human harm, including destroyed homes and businesses. But they also wreak ecological harm, particularly extreme fires. They destroy habitat, degrade water quality, release carbon dioxide, and reduce soil quality.
Property rights can help cut through the red tape and reduce these risks. Nuisance law allows people to protect their property from unreasonable harms caused by their neighbors. Depending on the nuisance, the property owner can obtain either compensation or an injunction requiring her neighbor to fix the problem. Although most often used to protect against private neighbors, nuisance law can also protect against the government’s unreasonable use of its land.
Federal common law recognizes a right to bring public nuisance claims against the federal government. Thus, if a government owned forest is not responsibly managed for fire risk, neighboring property owners and local governments have a right to force the government to address the problem. Although this right has rarely been invoked, it could help balance the scales of forest policy. In the long run, reduced fire risks will benefit both property owners and the environment, while reducing the burdensome cost of suppressing extreme fires.
Allowing more forest decisions to be governed by property rights rather than bureaucracy could also help environmentalists better protect them. PERC’s Tate Watkins reports the incredible results of an experiment to pay property owners in Uganda to preserve forests.
The experiment’s designers found that financial incentives cut the loss of forest cover in half. And it proved incredibly cheap. A mere $11.20 an acre protected chimpanzee habitat and reduced carbon releases.
“Trying to solve this problem through strict laws doesn’t always work,” said Jeff Mosenkis of Innovations for Poverty Action, a nonprofit that helped run the study. “You have to build a program that takes into account the needs of people on the ground, and this study was a nice example of that.”Property rights can also protect forests in the United States. Several environmental groups have bid for timber harvesting contracts with plans to forego harvesting. Unfortunately, the federal government has blocked those efforts, arguing that the harvesting rights could only be obtained by someone who wants to use them. In doing so, the government has ignored an important price signal: if an environmental group is willing to pay more for a contract than timber interests, that suggests that conserving the area is more important than harvesting it. A private owner would not ignore such an important signal. Neither should the government."
Friday, August 18, 2017
We hear about US jobs outsourced overseas (‘stolen’) but what about the 7.4M insourced jobs we ‘steal’ from abroad?
From Mark Perry.
"We’ve been hearing a lot over the last year or more, especially from President Trump and many of his economic advisers and supporters, about US firms outsourcing factory jobs overseas, along with accusations that countries like Mexico, China, and Japan are “stealing US jobs” (see more than 200,000 Google search results for “Trump” + “stealing jobs”). Further, Trump warned last December that his government would punish US companies seeking to move operations and jobs overseas with “consequences.”
What we don’t hear very much about from Team Trump are the jobs that are “insourced” into every US state by foreign companies, even though those insourced jobs totaled more than 7.4 million Americans and represented 6.2% of all private sector US jobs in 2015 based on new preliminary data from the Bureau of Economic Analysis on “Activities of U.S. Affiliates of Foreign Multinational Enterprises in 2015.” The map above (thanks to AEI’s Olivier Ballou for assistance) shows the thousands (and in more than half the US states the hundreds of thousands) of insourced jobs in each US state in 2015.
Here are some key statistics on jobs insourced to the U.S. that highlight some of the significant economic benefits to the U.S. economy from the thousands of foreign-based firms that outsource jobs and production to the U.S.:
In other words, the insourcing of production and jobs to the US has a significant and positive impact on our economy, and yet this huge economic stimulus gets almost no attention. All we ever hear about from Team Trump is the jobs that are allegedly being “stolen” from us by China, Japan, and Mexico.
- More than 6,000 US affiliates of foreign multinational enterprises (MNEs) employed 7.4 million American workers in 2015, an increase of 15.6% from 2014, adding roughly one million new jobs to the US economy. Employment by US affiliates represented 6.2% of the total U.S. private industry employment in 2015 (119.8 million workers).
- The current-dollar value added of majority-owned US affiliates, a measure of their direct contribution to US GDP, totaled $895 billion in 2015 and accounted for 6.4% of total US private industry value added in 2015.
- US affiliates invest heavily in American manufacturing, making up 35% of all insourced jobs in 2015. US affiliates supported more than 2.6 million factory jobs, accounting for more than 21% of total American manufacturing employment (12.3 million total factory workers).
- US affiliates’ share of American manufacturing employment in 2015 made up 45% of both jobs in the motor vehicles and parts industry and the chemicals industry.
- US affiliates of foreign MNEs supported an annual payroll of $587 billion in 2015—with an average compensation per worker of nearly $80,041 (27% greater than the private sector average of about $63,000).
- US affiliates of foreign companies paid an average compensation of more than $90,000 in the manufacturing sector (10% more than the national manufacturing average).
- US affiliates exported $361.5 billion in goods (24% of all US exports).
- US affiliates imported $688 billion in goods (30% of all US imports).
- US affiliates spent $61.2 billion on R&D in 2015 (12% of all US R&D).
- UK affiliates in the U.S. spent the most on R&D in 2015—$8.2 billion, followed by Japanese, German, and Dutch affiliates.
- US affiliates spent $273 billion on new property, plant, and equipment in 2015.
- As a separate state, the $587 billion annual payroll of Americans working for foreign insourcing companies in the U.S. in 2015 would have ranked that group of American employees as the seventh largest US “state” for Personal Income, just behind No. 6 Pennsylvania at $629 billion and ahead of No. 8 New Jersey at $535 billion.
Bottom Line: In today’s highly globalized economy, multinational firms operate in a world marketplace that increasingly makes national borders meaningless and irrelevant, as firms capitalize on hyper-efficient global supply chains that add enormous value, and ultimately result in lower costs and higher quality for the goods that consumers buy here and around the world. In the recent Trump-era discussions on US manufacturing, the outsourcing of production and jobs overseas, and the supposed “theft” of our jobs by Mexico, China and Japan, we lose sight of another big part of the global economy: the insourcing of millions of jobs into America by the 6,200 US-based affiliates of foreign multinational companies that operate here and employ millions of our workers.
Q: How could it possibly make sense for Trump to accuse Mexico, China and Japan of “stealing” our jobs, unless he also admits that the US is apparently then also “stealing” jobs from other countries, more than seven million in 2015? A more enlightened and up-to-date view of international trade would recognize the economic reality that modern businesses today operate in an increasingly globalized marketplace for their inputs, parts, materials, supplies along complex, cross-border supply and value chains that include multiple dozens of countries. In addition, those global companies serve retail markets in hundreds of countries around the globe.
Just like it makes economic and business sense for thousands of foreign companies to outsource jobs and production from their countries to every US state (perhaps because the US is one of their major retail markets), it also makes economic and business sense for thousands of US companies to outsource jobs and production from the US to foreign countries, perhaps also because overseas markets now represent more than 50% of retail sales for many US-based companies like Apple (65% of 2015 sales were in foreign markets), Procter and Gamble (63% sales were overseas), Hewlett-Packard (62% foreign sales) and Pfizer (56% overseas sales). Hopefully, Team Trump can move beyond a simplistic, outdated view of the global economy based on a fixed number of jobs where countries have to fight to “steal” jobs from each other in a zero-sum, win-lose world, to a more advanced and sensible view of a dynamic world of inter-connected, cross-border transactions where production and employment decisions are grounded in the reality of economics, and not politics."
Nostalgic accounts of life under communism avoid the broader perspective of widespread oppression and economic failure
By Marian Tupy.
By Marian Tupy.
"Over the last few months, The New York Times has published a number of warm and nostalgic recollections of communism. Authors have opined about the supposed optimism, idealism, and moral authority of communism. Perhaps the most bizarre article so far claimed that women behind the Iron Curtain enjoyed greater sexual satisfaction and more independence than their Western counterparts (except, of course, when it came to freedom of thought, speech, religion, association, or movement).
I would have chosen to commemorate 100 years since the Bolshevik Revolution and the birth of the Soviet Union in a different way. Over 100,000,000 people have died or were killed while building socialism during the course of the 20th century. Call me crazy, but that staggering number of victims of communism seems to me more important than the somewhat dubious claim that Bulgarian comrades enjoyed more orgasms than women in the West. But as one Russian babushka said to another, suum cuique pulchrum est. (To each his own is beautiful)
I am, however, intrigued by the striking similarities between the Times articles. To the greatest extent possible, they seem to avoid the broader perspective on life under communism (i.e., widespread oppression and economic failure). Instead, they focus on the experiences of individual people, some of whom never lived in communist countries in the first place.
In "When Communism Inspired Americans," the author remembers her socialist parents and the life of the communist sympathizers in 1950s America. In "Thanks to Mom, the Marxist Revolutionary," the author remembers his batty mother, who dragged him from one communist hellhole to another in search of a "real world" experience. In "'Make It So': 'Star Trek' and Its Debt to Revolutionary Socialism," the author quotes Captain Picard, who explains to a cryogenically unfrozen businessman from the 20th century, "People are no longer obsessed with the accumulation of things. We've eliminated hunger, want, the need for possessions. We've grown out of our infancy."
Speaking of hunger and infancy, here are some completely gratuitous eyewitness accounts of parents eating their own children during the man-made famine in Ukraine in the 1930s. Communism may have influenced science fiction writers, but real life in the USSR was no picnic.
"Where did all bread disappear, I do not really know, maybe they have taken it all abroad. The authorities have confiscated it, removed from the villages, loaded grain into the railway coaches and took it away someplace. They have searched the houses, taken away everything to the smallest thing. All the vegetable gardens, all the cellars were raked out and everything was taken away. Wealthy peasants were exiled into Siberia even before Holodomor during the 'collectivization.' Communists came, collected everything....People were laying everywhere as dead flies. The stench was awful. Many of our neighbors and acquaintances from our street died....Some were eating their own children. I would have never been able to eat my child. One of our neighbors came home when her husband, suffering from severe starvation, ate their own baby daughter. This woman went crazy."
One has to wait until "Why Women Had Better Sex Under Socialism," to meet an actual Eastern European. "Consider Ana Durcheva from Bulgaria," the author writes, "who was 65 when I first met her in 2011. Having lived her first 43 years under Communism, she often complained that the new free market hindered Bulgarians' ability to develop healthy amorous relationships. 'Sure, some things were bad during that time, but my life was full of romance.'" Durcheva's daughter, in contrast, works too much, "and when she comes home at night she is too tired to be with her husband."
What are we to make of this? Are we merely to deduce that the life of a young and, apparently, attractive woman behind the Iron Curtain was not completely devoid of pleasure? No. The article is explicit in stating that "communist women enjoyed a degree of self-sufficiency that few Western women could have imagined."
This is unadulterated rubbish. I grew up under communism, and here is what I recall.
First, all communist countries were run by men; female leaders, like Margaret Thatcher and Golda Meir, would have been unthinkable. Women who rose to prominence, like Raisa Gorbachev and Elena Ceausescu, did so purely as appendages of their powerful husbands.
Second, the author concedes that "gender wage disparities and labor segregation persisted, and...the communists never fully reformed domestic patriarchy." I would say so. In a typical Eastern European family, the woman, in addition to having a day job at a factory, was expected to clean the apartment, shop for food, cook dinner, and raise the children. The Western sexual revolution passed the communist bloc by, and ex-communist countries remain much more patriarchal than their Western counterparts to this day.
Third, communist societies were socially uber-conservative. As such, pornography and prostitution were strictly prohibited, divorces were discouraged and divorced people ostracized, and prophylactics and the pill were hard to obtain. (Think about it for one hot second. Why would economies unable to produce enough bread and toilet paper generate a plentiful and regular supply of condoms? This makes no sense!) The reason why we refer to communist countries as "totalitarian" is because the state wanted to control every aspect of human existence. Sexual autonomy was, well, autonomous. Being outside the control of the all-powerful state, it was treated with suspicion and suppressed.
But don't take my word for it. You can still visit a few communist countries, including Cuba and North Korea, and compare the social status and empowerment of their women with those in the West. Had the esteemed editors of the Times done so, they would have, I hope, thought twice about publishing a series of pro-communist excreta."
Thursday, August 17, 2017
This is something I submitted to the San Antonio Express-News two weeks ago. But it looks like it will not get in.
Of course, some research may take too long to pay off for private companies. But that does not tell us how much the government should spend. The issue is not as clear cut as Casey indicates.
Rick Casey does not give the private sector enough credit for the fracking revolution ("Perry at Energy and the price of ignorance," July 29).
Casey says corporations won't do the basic research to create technologies like fracking because "the payoff is too uncertain and distant." Also, fracking is "the fruit of research paid for 20 years ago by the Department of Energy (D.O.E.)."
That leaves out the essential contributions of Texas natural-gas baron George Mitchell, who died in 2013. According to the New York Times obituary, his company started fracking in 1981 and it kept trying for 15 years until they had success.
All those years trying different methods and techniques surely constitute research, especially when other companies weren't interested. Oil expert Daniel Yergin said Mitchell’s fracking technique is so far “the most important, and the biggest, energy innovation of this century.”
A 2013 Atlantic Monthly article says "Mitchell Energy had spent $250 million drilling in shale" between 1981-1997. So this is one corporation that was willing to do research by constantly trying different techniques involving different fluids and chemicals until they found one that worked.
How well did it work? The company began using the technique in more and more wells. Mitchell sold his firm for $3.1 billion in 2001, evidence that private sector research can pay off.
A 2013 Texas Monthly article reports that "fracking technology has existed for more than a century, and the first commercial fracking job was done in 1947," long before Jimmy Carter created the D.O.E. Former Mitchell Energy vice president Dan Steward said that the D.O.E. did perform research "that proved shale rock was rich in natural gas."
Mitchell Energy used that research and did get "federal tax credits for unconventional drilling." Steward concluded, however, that "George probably could have done it without the government" but "the government would not have done it without George."
If all it took was the D.O.E. research, other companies would have been fracking. But that is how free markets work and add value. Each company can go their own way. Many entrepreneurs try new products and techniques. That is how we get innovation.
Humphrey Davy invented the light bulb in 1802. But Thomas Edison put in all the work to make it practical. No one says his contribution was meaningless.
We all want new and better products. We get them through innovation. One requirement is that there is a chance for commercial success. This gives companies, like Mitchell's, the incentive to take risks.
The larger issue is how much the government should spend on research. There is no easy answer since we can't know ahead of time which projects will bear fruit and which won't. But some studies suggest that the private sector generally plays a big role.
A 2001 OECD study concluded that "research and development (R&D) activities undertaken by the business sector seem to have high social returns, while no clear-cut relationship could be established between non-business-oriented R&D activities and growth." It also mentions that government spending on R&D can crowd out private spending.
British biochemist Terence Kealey wrote a 2013 essay titled "The Case against Public Science." One key point was that "for the 19th and first half of the 20th centuries ... nations whose governments invested least in science did best economically—and they didn’t do so badly in science either."
Wednesday, August 16, 2017
See Send the Breast Pump With the Defense Attaché. By JULIANNE SMITH, a former deputy national security adviser to Vice President Joseph Biden, is the director of the Trans-Atlantic Security Program at the Center for a New American Security.
"Statistics collected by the center bear out their stories. Only 20 percent of senior Pentagon staff positions and 30 percent of senior State Department positions are held by women. While over 50 percent of incoming Foreign Service officers are women, as of July 2016, only 36 percent of assigned ambassadors were women — and that number has since dropped.
Within the intelligence community, women account for about 38 percent of the total work force, but hold only 28 percent of senior positions and make up 18 percent of people hired at senior pay levels. At the F.B.I., women hold just 12 percent of the bureau’s 220 senior agent positions. At American think tanks working on foreign policy, women account for just 24 percent of policy experts and 33 percent of the leadership staff. Skewed gender representation also affects the media. A 2014 study found that among the top five Sunday morning political shows on television, 75 percent of all guests and 87 percent of all solo interviewees were men."
See Making Affirmative Action White Again by IRA KATZNELSON. He is a professor of political science and history at Columbia University. Excerpts:
"In fact, today’s socioeconomic order has been significantly shaped by federally backed affirmative action for whites. The most important pieces of American social policy — the minimum wage, union rights, Social Security and even the G.I. Bill — created during and just after the Great Depression, conferred enormous benefits on whites while excluding most Southern blacks.Southern Democrats in Congress did this by carving out occupational exclusions; empowering local officials who were hostile to black advancement to administer the policies; and preventing anti-discrimination language from appearing in social welfare programs.New Deal and Fair Deal initiatives created a modern middle class by enabling more Americans to attend college, secure good jobs, buy houses and start businesses. But in the waning days of Jim Crow, as a result of public policy, many African-Americans were blocked from these opportunities and fell even further behind their white counterparts. The country missed the chance to build an inclusive middle class.""When Southern-led congressional committees drafted the law that created the Social Security program in 1935, they excluded maids and farmworkers, the two dominant job categories for Southern blacks and Southwestern Latinos, from the program. This denied benefits to 66 percent of African-Americans across the country, and as much as 80 percent of Southern blacks. It also disproportionately hurt Mexican-Americans.""the Fair Labor Standards Act of 1938 that mandated a 40-hour workweek and a minimum wage that explicitly left out agricultural and domestic workers.""When Congress passed the G.I. Bill in 1944 to help white veterans buy homes, attend college, get job training and start business ventures, it could have done the same for blacks. But at Southern lawmakers’ insistence, local officials administered these benefits. As a result, Southern blacks were left out, except for low-level vocational training. The law accommodated segregation in higher education, created job ceilings imposed by local officials, and tolerated local banks’ unwillingness to approve federally insured mortgages or small-business loans for African-Americans and Latinos.
When the federal government aided home buyers with the National Housing Act of 1934, which insured private mortgages, it might also have warded off housing segregation and helped blacks purchase homes. Instead, it supported racist covenants and typically denied mortgages to blacks."