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.
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.