Manufacturing Jobs: Impact of Energy Prices, Environmental and Labor Rules
Governmental efforts to reduce greenhouse gas emissions and require polluters to pay have raised questions about the effect that such rules can have on energy-intensive industries such as manufacturing. Some opponents to such limits argue that electricity prices will be driven up substantially and large numbers of jobs in energy-intensive industries will be lost. Targets for reducing emissions have already been legislated in places such as California, a state whose voters debated the jobs question during a 2010 ballot initiative to suspend the emissions rules.
A 2010 study by UCLA and Dartmouth College for the National Bureau of Economic Research, “How Do Energy Prices, and Labor and Environmental Regulations Affect Local Manufacturing Employment Dynamics?” looks at companies’ choices on where to locate their factories and facilities in response to state and local laws and business conditions. The study focuses on three areas — labor laws, electricity prices and the relative strength of Clean Air Act regulations — to assess why manufacturing may cluster in certain areas. The researchers then examine the potential impact of climate change-related laws that put a price on greenhouse gas emissions.
The study’s findings include:
- Areas of the U.S. with weaker union protections, lower energy prices and more lax air pollution regulations see a higher concentration of energy-intensive industries.
- While energy prices play a role in the choice of sites for some manufacturing industries, such prices are only a significant factor in a limited number of industries.
- If places such as California and the northeastern United States, where emissions reduction targets have also been legislated, introduce a $15 per ton cap-and-trade program, job losses on the order of 0.1% to 1.1% could be expected.
Overall, the study’s researchers found that the effect of electricity price on where manufacturers choose to locate was “modest.”
Tags: California, global warming, greenhouse gases, pollution, labor unions
Read the issue-related Los Angeles Times article titled "California Global Warming Law May Lead to Job Losses, Report Says."
- If you were to rewrite the article based on knowledge of the study, what key changes would you make?
Read the National Bureau of Economic Research study titled "How Do Energy Prices, and Labor and Environmental Regulations Affect Local Manufacturing Employment Dynamics?"
- Summarize the study in fewer than 40 words.
- Express the study's key term(s) in language a lay audience can understand.
- Evaluate the study's limitations. (For example: Do the results conflict with those of other reliable studies? Are there weaknesses in the study's data or research design?)
- Write a lead (or headline or nut graph) based on the study.
- Spend 60 minutes exploring the issue by accessing sources of information other than the study. Write a lead (or headline or nut graph) based on the study but informed by the new information. Does the new information significantly change what one would write based on the study alone?
- Interview two sources with a stake in or knowledge of the issue. Be prepared to provide them with a short summary of the study in order to get their response to it. Write a 400-word article about the study incorporating material from the interviews.
- Spend additional time exploring the issue and then write a 1,200-word background article, focusing on major aspects of the issue.