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Will the Green New Deal Shrink the Economy?

By: Nataly E.

Introduced by Rep. Alexandria Ocasio-Cortez and Sen. Ed Markey in 2019, the Green New Deal is a highly controversial topic in today’s political world due to the drastic changes the bill proposes in regards to making the country more environmentally sustainable in order to prevent the effects of climate change. One of the many things that is contentious about the bill is how it will affect the economy in the midst of transitioning from fossil fuels to renewable energy. The Green New Deal is based off of Franklin D. Roosevelt’s New Deal that aided the country out of the Great Depression in the years 1933 to 1939. What both bills have in common is the proposition of starting a series of social and government spending programs in order to create jobs. While the New Deal helped millions of U.S citizens get back to work, in thousands of public projects across the country with an emphasis on any job availability, the Green New Deal places emphasis solely on well-paying jobs that do not harm the environment. The issue that people tend to have controversial views on is that the deal will work to remove the fossil fuel industry, and therefore eliminate jobs in that industry. The workers will be unemployed, and to combat this issue, the Green New Deal focuses on how to create sustainable jobs for the unemployed by focusing heavily on Keynesian Economics:

"The idea that government intervention can stabilize the economy with public policies that aim to achieve full employment and price stability."(4, Photo 5)

Therefore, possible government projects include research and experiments in order to aid in improving the function of renewable energy, clean up crews to clean areas damaged by pollution, and the production and installation of solar panels, wind turbines, and other forms of renewable energy to name a few.

Although many claim that the reason the United States came out of the Great Depression was because of FDR’s use of Keynesian economics, many also claim it was World War II. The war created 17 million civilian jobs, increased industrial productivity, increased corporate profit after taxes doubled, brought back full employment, and a fairer distribution of income2 , so it is unwise to say that World War II had nothing to do with aiding the United States out of its economic depression. This proves that in order for there to be a successful switch from fossil fuels to renewable energy, there needs to be a wave of available jobs that correspond with the number of unemployed and those who will lose their jobs if the fossil fuel industry is eliminated. Just like how World War II provided that wave to aid FDR’s New Deal, there is a possible way to create a similar wave without the necessity of war.

Since the 1980’s, corporations have been moving overseas in order to make more profit by decreasing their taxes and paying their workers the bare minimum. As of January 25, 2020, there are 14.3 million jobs of U.S companies and corporations overseas1. If companies were forced to remain in the U.S, local jobs would be created in this country, creating a high job demand that would be similar to that created during World War II. Many U.S corporations pay the smallest possible quantity in order to keep labor costs low through hiring workers from countries with lower standards of living where workers are desperate for money and are willing to work hard labor for barely a dime. If these jobs are brought back to the United States with a livable wage, along with the jobs created by government projects/renewable energy jobs, there would be more than enough jobs for the 5.9 million unemployed in the United States1 , along with making up for the loss of jobs from the energy industry, which include about 6.7 million jobs3 or less. Logically, sudden spikes in unemployment are unavoidable, but these are temporary setbacks that will eventually lead to long-term job stability. Of course there are downsides to bringing jobs back to the United States, since actions do not come without consequences. However, these setbacks are short term and are worth it in the long term. The Green New Deal would decrease the competitiveness between companies and may increase the cost for consumers- but there should also be government regulation in these corporations in order to prevent them from taking advantage of the people.This situation is like dominos- in the event of a domino falling, it will set off other events of dominos falling, creating a chain reaction. Although this will set off a chain reaction of other issues that will need to be dealt with, it will also set off a chain reaction of solutions to other problems, and there will be more solutions that set off other chain reactions to solve the new problems that arise. In theory, the economic aspect of the Green New Deal would help the economy and ecosystems in the long run- but that is only if the government takes the right steps to ensure a livable wage and enough jobs to help the unemployment rate. This is meant to be a slow and delicate process which is meant to change our way of living to a more sustainable one. If the economy does not adjust accordingly to combat climate change, humanity will have to pay for the future detrimental, irreversible damages regardless of when. Preparing sooner rather than later would mitigate the cost of environmental responses.

Discussion Questions:

  • Is it possible that bringing back overseas jobs that are provided for by U.S companies and corporations is a good idea?

  • Is Keynesian economics the answer to aid in making the Green New Deal a possibility?

  • Is there another possible way to make the Green New Deal work?

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