News Story

Former Governor Predicted 17,000 Jobs From 'Green Energy' Mandate, Number of Jobs Has Actually Dropped

Gov. Granholm signed 10 percent mandate in 2008, ballot initiative would increase it to 25 percent

In 2008, when then-Gov. Jennifer Granholm signed the state's mandated alternative energy law, she said a $6 billion investment would generate 17,000 jobs. 

The majority of those jobs never materialized.

Gov. Granholm called the alternative energy mandate "perhaps the most important legislation to create jobs and diversify Michigan's economy that has crossed my desk. … This comprehensive energy plan will create all kinds of jobs for all kinds of people."

However, the U.S. Bureau of Labor Statistics tells a different story.

When Gov. Granholm signed the Clean Renewable and Efficient Energy Act in 2008 there were 4,256 jobs in the state in "power and communications systems construction," which includes the jobs for wind and solar power construction. In 2011, that number had dropped to 3,728 jobs; about a 14 percent drop.

Yet promoters of an alternative energy ballot initiative that would mandate the state have 25 percent of its energy produced by alternative energy by 2025 are wrongly citing a Michigan State University study and claiming that if the measure passed it would create 74,495 jobs. The MSU study, however, calculated "job years" not "jobs" as some groups lobbying for the mandate are promoting. That means, for example, a person who is hired by a wind farm company and worked for 25 years would create one job, but 25 job years. The study based its job years calculations on the life of the plants, which ranged from 20 to 30 years.

Some critics are also questioning the validity of the study's job years estimate.

"Those things are usually overrated,” said Jason Gillman, a tea party activist from Traverse City. "Those 'job years' are probably like 'dog job years.'"

Ken Sikkema, senior policy adviser for the CARE for Michigan Coalition, which opposes the mandate, said a recent U.S. Department of Energy report from the American Wind Energy Association estimated the entire wind energy sector directly and indirectly employed 75,000 full-time workers by the end of 2011.

"Michigan Energy, Michigan Jobs 'jobs years' claims just don't add up, no matter how you look at them," Sikkema said in a press release. "In fact, according a report issued by the U.S. Department of Energy, there aren't even that many jobs nationwide in the wind energy industry."

Steven Miller, an assistant professor with the Center for Economic Analysis at Michigan State University who was an author on the report, said the "job years" estimates also include indirect jobs.

Indirect jobs are those that are not directly tied to the industry, but wouldn't have been created had the investment not been made. An example would be a coffee shop that hires an extra person to handle increased business. Miller said the Bureau of Labor Statistics had just one category of jobs specific to construction.

The Mackinac Center for Public Policy has also used indirect jobs in the past in its analysis.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.