California's green-jobs numbers paint a mixed picture

Oct 12 - McClatchy-Tribune Regional News - Jack Chang The Sacramento Bee, Calif.

For Jerry Brown and many of his fellow Democrats, the future of California's struggling labor force hinges on a clean energy industry they say is poised to take off.

They picture a green California where hundreds of thousands of people work to install solar panels and build electricity-powered cars.

The numbers, however, tell a less gung-ho story, at least when it comes to meeting the immediate challenge of putting to work the 1.3 million people statewide who have lost their jobs since 2007.

Green jobs may be growing more quickly than the overall state work force, but not nearly at the pace and in the numbers needed to turn around what's been a devastating labor market collapse, say economists and experts in the sector.

"I don't want to oversell the core green economy," said F. Noel Perry, a venture capitalist who founded the nonprofit research group Next 10, which has extensively studied the alternative energy industry.

"Unemployment is over 12 percent. We've seen the construction industry crater. There are very few areas of industrial growth in California. Green jobs are not going to fill that vacuum today."

Perry, however, sees a promising long-term future for the sector.

"There is a movement taking place," Perry said. "There is a transformation."

Unfortunately for Californians looking for work right now, that change won't happen quickly enough.

The state's 159,000 alternative energy jobs make up less than 1 percent of California's work force and just 7 percent of the 2.26 million people categorized by the state as unemployed in August, according to a Next 10 estimate and state figures.

And while green jobs expanded by 36 percent from 1995 to 2008 -- nearly triple the rate of state labor force growth -- putting to work even a tenth of California's unemployed over the next three years would require green job numbers to grow 17 times more quickly.

Next 10 hasn't forecast growth projections for green jobs, which includes everything from factory workers assembling wind turbines to home weatherizers.

"It's really not a recession-fighter as much as one of the major long-term growth sectors, like semiconductors were a generation ago and the Internet," said Stephen Levy, director of the research group Center for Continuing Study of the California Economy.

"So the jobs are primarily in the future. I don't think it's correct to say clean tech is going to lead California out of the recession."

Brown, however, focuses almost exclusively on green jobs when asked how he would bring down the state's 12.4 percent unemployment rate.

Democratic U.S. Sen. Barbara Boxer, who's up for re-election next month, and President Barack Obama have also played up the potential of such jobs.

When asked in the first gubernatorial debate about his jobs plan, Brown responded, "My plan is to invest in clean energy, the green tech of the future."

After a debate panelist said clean energy jobs made up a fraction the total work force, Brown responded, "But it's the part that's growing."

Brown has said he would push the state to generate 20,000 megawatts of clean energy by 2020, which he said would create 500,000 jobs.

On his website, Brown also proposes to create jobs in general by streamlining state regulatory agencies and by building more public infrastructure.

By contrast, Republican candidate Meg Whitman's jobs plan says little about alternative energy. Instead, she proposes reducing business regulations and cutting taxes, including eliminating the small business start-up tax and the capital gains tax.

The sole clean energy measure mentioned in her jobs booklet is a state tax credit for employers hiring people in the green energy sector.

In fact, Whitman, the former CEO of online auction firm eBay, has veered from many of her Silicon Valley peers by proposing a one-year moratorium on AB 32, the law capping greenhouse gas emissions.

In the debate, Whitman told Brown, "The truth is 3 percent of the jobs today come from green jobs, 97 percent come from the rest of the economy."

But tax experts have also questioned whether a central component of Whitman's jobs plan -- eliminating the capital gains tax -- would spur enough economic activity and revenue to make up for the loss of $3.2 billion to $11.7 billion in annual state revenues it has generated over the past decade.

And while Whitman argues that California needs to cut regulations to keep businesses from moving to other states, a Public Policy Institute of California study found that California lost a net of about 9,000 jobs every year -- or 0.05 percent of all jobs -- because they moved out of the state.

"Anything that either candidate is proposing right now would only have long-term effects, and those probably would be small," Levy said.

"Whitman is making the traditional Republican argument that all businesses care about is the small changes in the tax rate and cost, while that is overturned by the whole phenomenon of Silicon Valley, which has thrived for over 30 years under a whole variety of administrations and tax rates because of the conglomeration of talent here."

Doubts about the speed of green job creation don't dampen the enthusiasm of entrepreneurs such as Jim Petersen, president of the PetersenDean roofing and solar systems company.

Petersen said his Vacaville-headquartered company has seen its nationwide alternative energy work force jump from about 200 people three years ago to 1,200 today, while his overall staff has stayed at around 4,500 people.

In fact, Petersen said his bottom line has held steady despite the housing collapse due to clean energy business. Brown visited Petersen's facility last month in the East Bay city of Newark to tout his green jobs plan.

"I believe (Brown) can build a new economy around solar power and clean and green technology," Petersen said. "I just have wide open sea, and I'm ready to go."

Other data suggest that many in the financial world share Petersen's high hopes, especially for the industry's future in California.

In the first half of this year, the state attracted 40 percent of all venture capital going to the sector globally, Next 10 found, while a quarter of all venture capital invested in California last year went to clean energy.

On top of that, the clean energy sector weathered the recession in fine shape. Green jobs in the state grew by 5 percent from 2007 to 2008, while total jobs shrank by 1 percent during that period.

So while Brown and company may be jumping the green jobs gun, he has a lot of company, at least, in making long-term bets on a clean and green future.

"Private venture capital is more important to me than anything else," said Michael Bernick, former director of the state Employment Development Department. "And the fact that the venture capital industry is already investing heavily shows there is a future."

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Call Jack Chang, Bee Capitol Bureau, (916) 326-5543.