Posted in: Politics
Published:
December 21, 2019 8:00 AM UTC

More Than $1M per Job: The Staggering Cost of Elizabeth Warren’s $10.7 Trillion Green New Deal

Sen. Warren has unveiled her plan to take the fight to climate change and kick start the green economy - but here's what you may have missed.
  • Warren has released her plan to tackle climate change and usher in a green revolution.
  • The plan is estimated to cost $10.7 trillion and create 10.6 million jobs, which is more than $1 million for each new job created.
  • The Senator hopes the plan gives her a boost going into 2020.

Sen. Elizabeth Warren unveiled her plans for a Green New Deal on Friday.

Her strategy, designed to reduce carbon emissions and “defeat the climate crisis,” involves rebuilding the U.S. economy “with 100% clean energy” and creating 10.6 million jobs in the process.

Source: Twitter

But the price tag on her plan – a staggering $10.7 trillion – is eye-watering.

How is the Deal Funded? 

Warren says a “new green bank” will help pay for her plan.

This bank will purportedly “open up new markets for greater investment” and expedite the substitution of fossil-fuel-based technologies with clean energy technologies. 

Source: Twitter

Warren has also proposed issuing “Green Victory Bonds.” Pointing to the success of victory bonds during World War II, she claims these new bonds will allow Americans “to own a piece of the climate solution.”

$10.7 Trillion for 10.6 Million New Jobs

$10.7 trillion is a lot of money, especially when current U.S. debt is already more than $23 trillion.

But also, $10.7 trillion for 10.6 million jobs results in more than $1 million for each job created. And if you think that’s expensive, you’re not alone. 

According to David Robalino, Manager of the Jobs Cross-Cutting Group, it costs the average coffee-shop in the U.S. between $25,000 to $35,000 to employ someone.

Of course, Warren’s Green New Deal isn’t intended to spur a revolution for baristas and servers. Her plan proposes expanding job training for skilled laborers and creating new union jobs for “large construction and engineering projects.”

But still, $1 million for each new job is still expensive. Consider research conducted by Robalino that looked at how many jobs were created in Tunisia after a $10M investment:

Source: Worldbank.org

Robalino found that $10 million created around “300 jobs in sectors like trade, wood, or construction,” and “less than a hundred in the electrical or the transportation sector.” Collectively, Robalino estimated that the $10 million investment resulted in about $30,000 for each job created. 

But perhaps looking at the cost of jobs is missing the point. Warren’s proposal isn’t solely about job creation, it’s also about bold, radical action to prevent a climate catastrophe. And many will argue you can’t put a price tag on the survival of our species.

How Will the Deal Go Down With Voters?

Putting potential Armageddon to one side, we are still in the primary season.

Warren announced her plan the day after the sixth Democratic presidential debate. During the contest, the issue of climate change took center stage. 

The Senator’s proposal will likely go down well with her base – 90% of Democrats and leaning Democrats think the Trump administration is not doing enough on climate change. 

Independents could also be drawn to Warren’s plan. According to a Pew Research Center survey released in November, 67% said the federal government is doing too little to reduce the effects of global climate change. 

Source: Pew Research Center

Warren hopes her plan resonates with voters going into 2020. According to national polling data from Real Clear Politics, the Senator is sitting in third place with 15.2% support – more than ten points behind former Vice President Joe Biden in first place with 27.8%.

Source: Real Clear Politics

To some skeptics, Warren’s deal won’t require a magic money tree, but rather a magic money forest. But supporters will argue that radical action is needed now to prevent irreversible damage to the earth. And on that basis, whatever the cost of a Green New Deal is, it’s a price worth paying. 

This article was edited by Sam Bourgi.

Last modified: January 22, 2020 11:40 PM UTC

Laurence Watt @laurencewatt8

Laurence is a journalist based in Canada who covers markets. He has experience working for multiple news media outlets, including as a news editor and associate producer for radio. He doesn't have many followers on Twitter, but you can change that by checking him out here @laurencewatt8. You can also reach him via email at lwatt.ccn@gmail.com