38.6 million Americans have now filed for unemployment benefits in the 9 weeks since the coronavirus crisis hit. It was originally hoped that this explosion of joblessness was merely temporary, with workers quickly returning to the old jobs still waiting for them. But that optimism is fading, as economists now predict that many of the job losses will become permanent.
A new working paper from the University of Chicago estimates that “42 percent of the recent layoffs will result in permanent job losses.” That would mean 16.2 million Americans will need to find new jobs.
More than 2 months into this joblessness crisis, neither in Congress nor the White House seems eager to tackle the issue of job creation. Over $3 trillion has spent on vital healthcare and economic disaster relief. But, not a single dollar of that previously-implausible sum of spending was put towards job creation.
As the full scale of this labor market shock comes into focus, our federal government must turn its eyes towards genuine stimulus and job creation. And Americans overwhelmingly want the government to create new jobs in clean energy. CGC polling found that 4 out of 5 voters nationally want the government to invest in job creation in clean energy. This includes the majority of voters in both parties.
And the Clean Energy Jobs Fund is the preferred mechanism for this investment. In fact, 7 out of 10 voters want Congress to deposit $35B of public funds into the nonpartisan, nonprofit organization that is based on the principles laid out in the National Climate Bank Act.
What would this $35B accomplish? Using the proven and practiced techniques of green banks, $35B of public funds would turn into approximately $350B of total investment over five years. This in turn would create 5 million jobs during that time period.
The Clean Energy Jobs Fund could put nearly a third of all permanently displaced workers back into the labor force. And it would be an enormous savings for Congress and the American people.
If Congress were to invest $70,000 per job that needed to be created, it would require $1,134B of stimulus to put all 16.2M Americans back to work. But if Congress invested $35B into the Clean Energy Jobs Fund to put 5M of those Americans back to work, then it would only require $784B of stimulus to create jobs for those remaining. This approach would, on net, require $315B less stimulus.
How is this possible? It’s because the Clean Energy Jobs Fund would use public fund to mobilize private co-investment into all of its activities. Whether the construction of renewable power to lower energy costs for households or installing battery storage to make communities more resilient, there is private capital eager to invest. The Clean Energy Jobs Fund will make each public dollar go farther.
As Federal Reserve Chairman Jerome Powell told Congress last week, “There is clear evidence that when you have a situation where people are unemployed for long periods of time, that can permanently weigh on their careers and their ability to go back to work.” The time for Congress to invest in job creation is now, and it should do so with the Clean Energy Jobs Fund.