Fueling our Economy by Digging with Spoons

There’s an old story often attributed to the economist Milton Friedman that describes how he was taken to view a worksite during a 1960s-era visit to China. His hosts were eager to show the many laborers working to excavate a canal. But Friedman was more interested in the lack of modern machinery on the site.

He asked why they relied on human labor to do a job that would be more easily and quickly done with modern machinery. “This is a jobs program,” came back the reply. Most of the workers would be unnecessary if the work was completed with machines.

Recognizing the inherent inefficiency of jobs for jobs’ sake, Friedman responded that he had mistakenly thought they were building a canal. If they were only seeking to provide extended employment to many workers, he said, they would need even more if they handed out spoons for digging, rather than shovels.

This story came immediately to mind when I saw a congratulatory email sent out by solar energy industry supporters. The email gushed over a so-called boom in solar employment, and it included a graph showing numbers from the U.S. Department of Energy for employment in various sectors of the energy industry. In 2016, the email said, the U.S. solar industry employed 373,807 people. In comparison, fossil fuels employed a mere 187,117, wind energy employed 101,738, and nuclear rounded out the group with 68,176 employees.

The solar numbers appear very impressive, and the Energy Department study indicates solar workers make up a full 43 percent of the nation’s electric power generation workforce. Numbers like this would seem to support the widely publicized notion that the renewable wave has washed over the nation.

But there is more to consider about the relative value of each of these solar jobs.

First, the numbers in the email only list workers involved in generating electric power, excluding those who produce fuels. When those numbers are taken into account, though, the fossil fuels and nuclear industry numbers go to 1,073,872 and 76,771 respectively.

Second, the idea of providing spoons to workers springs to mind again when we consider that, in 2015, numbers from the Energy Information Administration showed solar energy produced a mere 0.6 percent of the nation’s electricity. That is, it took almost 400,000 workers to produce 0.6 percent of the electricity we need.

Compare solar power to fossil fuels, which generated over 66 percent of our electricity and employed roughly 1.1 million workers. Or compare them to nuclear, which produced 20 percent of our electricity and required 77,000 people.

Further compounding solar energy’s extreme costs are the gratuitous government subsidies and special market protections it receives. The most recent Energy Information Administration numbers show that in 2013, solar energy received over $5.3 billion in government aid. That came out to a subsidy of $231 per megawatt-hour. In comparison, coal received about $0.57 / MWh and natural gas received $0.67 / MWh.

Reports of hundreds of thousands of new jobs created by an up-and-coming industry make for great headlines. But when you look at the real numbers, you’re forced to ask serious questions. Where are the billions in tax dollars going? And why do our state and federal governments hand out metaphorical spoons to solar energy workers when other energy sources are doing the job far more effectively and efficiently?