2.7 Million Jobs at Stake

Deck: 

We Must Keep in Mind Their Work

PUF 2.0 - August 15, 2017

2.7 million jobs. That's the estimate by M.J. Bradley & Associates of the number of direct jobs in the electricity sector. Check out its report "Powering America" released a couple of weeks ago. And our interview of M.J. Bradley's Paul Allen in September's Public Utilities Fortnightly.

The report blows away the myth that there are just four hundred thousand electricity jobs. That number counted utility employees only. There's a lot more of us than that.

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Two summers ago, I never imagined I would be editor-in-chief of Public Utilities Fortnightly. An economist, I decided to submit an essay to PUF to clear up a widespread and serious misunderstanding about the number of electricity jobs.

My essay "Jobs, Jobs and Energy Jobs" was published in Fortnightly's Spark, its newsletter at the time, on August 11, 2015. My estimate was 2 million direct jobs (not counting the multiplier effect and the millions of induced jobs).

It now appears I undercounted. M.J. Bradley's more comprehensive analysis came in thirty-five percent higher, at 2.7 million.

Why is the large number of jobs in the electricity sector so important? Well, the electricity workforce not only electrifies our economy and culture; its jobs are an essential part of American society. One in fifty-four non-farm jobs nationally are electricity jobs.

Regulatory and policy pronouncements can thus have large job impacts. Just ask the communities of shut nuclear plants or stopped projects.

Which brings us to another myth about jobs in the electricity sector. Our sector is said to be one of the most capital intensive, or even the most capital intensive. This statement is true in a way but misleading in another.

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Overall, the electricity sector has a high capital-to-labor ratio. But the ratio is heavily biased by the sector's operations and maintenance side, which has an extraordinarily high capital-to-labor ratio. Power plants, lines and substations are quite intentionally built to last for decades, requiring minimal manual intervention.

As opposed to the sector's construction side, which has a significantly lower capital-to-labor ratio, when all engineering, manufacturing and construction labor is considered. It takes a lot of people to develop and build a new wind farm, high-voltage transmission system, combined-cycle plant, etc. Including regulatory folks like some of us.

Indeed, the transformation of the power generation sub-sector is driving up job numbers in the short term, but driving down the numbers longer term. Takes a lot of people to put up a new gas-fired or renewable source. But once the connection to load is made, many fewer people are needed than at the coal plant being replaced.

Bottom line. Jobs are at stake, of real people with real families to support, and with real communities that count on them. As we go about our work, we must keep in mind their work.