The COVID-19 pandemic
destroyed more than 22 million
jobs
in the United States during March, April and May of 2020. The subsequent
recovery has been relatively modest, leaving plenty of uncertainty about the
future of the US economy.
Our joint research team from HIP Investor, the
Global Institute for Sustainable Prosperity (GISP)
and the University of Missouri at Kansas City first launched our monthly
Green Jobs Report to
analyze real-world, government-reported labor market data with an
environmental, social and governance (ESG) lens — which we generally
named “green.” Over the past 6 months, we have assessed the mix and growth of
jobs and hourly pay across industries that are “greener” (higher ESG based on
HIP’s ratings of 9,000 global equities) versus “less green” (lower ESG based on
HIP’s ratings).
Every month, we discuss the results of the report in the Green Jobs ESGX
webinar series, with
expert panelists and deep insights from economists — including New York Times
best-selling author Stephanie Kelton, former Federal Reserve manager
Claudia Sahm, job-guarantee expert Pavlina Tcherneva, and
health-care-finance expert Carolyn McClanahan.
Half a year into the pandemic, the results are very clear:
-
“Greener” jobs pay higher wages than extractive jobs.
-
The US lost extractive jobs at a higher rate than greener jobs during the
COVID-19 downturn.
-
Even in the hardest-hit “high-contact” industries, greener jobs were less
likely to be lost.
To calculate the monthly results, the Green Jobs Report incorporates HIP
Investor’s life-cycle approach rating the products and services, operations and
management practices of publicly listed companies. These ESG ratings by HIP
Investor are applied to the industries in the Current Employment Statistics
(CES) data published by the US Bureau of Labor
Statistics (BLS) each month.
The Green Jobs Report first maps HIP Ratings for products and services (P&S),
earth-related metrics (energy, water, waste, emissions), and the Overall HIP
Rating for the Russell 3000 companies to their respective North American
Industry Classification System (NAICS) identifiers. Second, HIP Ratings
for each industry as identified by NAICS are paired with BLS releases for the
CES survey of jobs, wages and hours for both supervisory and non-supervisory
workers.
Overall, “green” jobs (high HIP-rated) are the highest paying and most
resilient, compared to (low HIP-rated) extractive industries in the US economy.
According to the CES survey, April experienced a record-setting increase of 4.7
percent in average hourly earnings, which resulted from the destruction of
low-quality jobs. Our analysis shows that green industries had the lowest
increase in average hourly earnings — because the greener industries were less
likely to lay off low-paid workers.
Greener (high HIP-rated) industries have been the most resilient and the least
impacted by the COVID-19 crisis. March to April data saw the largest decrease in
employment due to the mandated government lockdown. During that time period,
greener industries were the least impacted — with only a -6.71 percent reduction
in employment, compared to -15.24 percent in job losses for medium-tiered
industries and a -18.39 percent decline for the extremely extractive industries
(lowest HIP-rated). Over the last six months, greener industries remained the
most stable on the jobs front, whereas more extractive industries proved to be
more volatile.
Given the nature of transmission of COVID-19, not surprisingly, “high-contact”
jobs, where employees are physically working within one arm’s length of their
co-workers — such as Food and Beverage workers, Barbers and Hair Stylists,
Pilots and Flight Attendants — were the most severely impacted by job losses.
Since February, high-contact industry employment has been reduced by 6.8
million, whereas Low-Contact industry employment declined by 3.7 million.
In high-contact industries, greener industries with a HIP score above 30 had
employment reduced on average by -10 percent since February, whereas
high-contact industries with a HIP rating below 30 experienced an average
decline of -14.3 percent since February. Similarly, low-contact industries
scoring above a 30 HIP rating had a decline of only -5.2 percent in employment
on average since February; compared to -9.1 percent for industries below 30 HIP
rating.
This monthly Green Jobs Report provides useful metrics for policymakers and
industry leaders. The resilience of green jobs is undeniably clear: Becoming
greener is better for workers, environment and society; and better for
bottom-line profits. If we want to build a stronger, cleaner, and more resilient
economy, we cannot simply restart the engine of the old economy —we must change
the engine altogether.
The good news is that the federal government can pay for
it
without bankrupting the country or causing runaway inflation. Just as the US
government allocated more than $2 trillion via the CARES Act to keep people
safe at home; in the future, we could align and agree to create millions of
Green New Deal
jobs
to decarbonize the economy. Our future features will describe how all of this is
possible. We must accelerate our action and scale up the transition to a
prosperous, equitable, sustainable and resilient economy.
To sum up: At the macro level, US federal funding for green infrastructure,
weatherization programs, renewable energy investments, and R&D for material
science and decarbonization strategies is needed today. At the micro level, all
decision-makers in government and business need more ESG transparency, higher
standards for workplace safety and worker protection; and more commitment to
greener production, operations, and supply chains.
The monthly Green Jobs
Report shows that
“greener” enterprises align with more resilient jobs, higher pay for workers,
fewer job losses, and the potential for better overall company and investor
portfolio performance. Together, we can achieve all of these goals in business,
portfolios and policy-making.
Get the latest insights, trends, and innovations to help position yourself at the forefront of sustainable business leadership—delivered straight to your inbox.
An internationally recognized expert in impact investing, Herman invented the “HIP = Human Impact + Profit” ratings system nearly 20 years ago, in 2004 — when investors asked how to create more human impact with their for-profit portfolios.
Scott Fullwiler is an Associate Professor of Economics at University of Missouri-Kansas City.
Fadhel Kaboub is an Associate Professor of Economics at Denison University and President
of the Global Institute for Sustainable Prosperity.
Amir Khaleghi is a Research Fellow at the Global Institute for Sustainable Prosperity and a PhD student in economics at the University of Missouri – Kansas City. He received his B.S in Economics at the University of Kansas and a Master of Arts in Economics at the University of Missouri-Kansas City. His current research is focused on rotational group bias found in labor force surveys and developing a job quality index for use as an alternate economic indicator.
Published Oct 28, 2020 8am EDT / 5am PDT / 12pm GMT / 1pm CET