How a greener economy can help fix Europe’s labour market problems

This post is by Emily Coats and Dustin Benton, co-authors of a new Green Alliance briefing Job creation and the circular economy.

Labour markets are news again. Of course, the term never appears in the headlines, but the effects of a changing jobs market are front page news: Donald Trump, Norbert Hofer, Marine Le Pen and even the UK’s own EU referendum are the political expression of a battle between cosmopolitans, who benefit from a globalised economy, and those whose employment is at risk from globalisation, mechanisation and a declining manufacturing base.

The statistics are stark. Unemployment is high, but even those who are employed aren’t necessarily doing well. Since 2008, ‘underemployment’ has risen by nearly 50 per cent. Zero hours contracts increased by 19 per cent in just one year. And, given that over 47 per cent of existing jobs are under threat from automation, we can’t simply hope that things will get better when the economy picks up.

Environmentalists should care about this, and not just because we are citizens too: the political reaction matters. For example, leaving the EU would be definitively negative for Britain’s natural environment, but few of those who will vote leave want to harm the countryside.

The challenge for those wishing to remain is not just to outline the risks of departure, but to show how European action can both improve the environment and address labour market problems that are feeding political frustration. (The same is true for those opposing ultranationalist greenwash elsewhere in Europe.)

Policy which benefits the environment will not solve the jobs problem alone. But our work shows that it can help in three critical areas:

Underemployment
Work is becoming more flexible, but more precarious. The rise of zero hours contracts, the sharing economy and remote working have become the new normal. The latter two can have environmental and labour market benefits. But they also come with huge risks: job insecurity, wage undercutting and exploitation by employers.

The circular economy can help to address these risks. Our work shows that circular economy jobs in the UK offer better hours and longer tenure than the average job in the UK, a finding that is true across age bands and for both sexes.

Automation
Some jobs are likely to be displaced entirely by technology, including knowledge intensive ones such as auditors and credit analysts. Jobs that aren’t lost to automation are likely to be transformed. A future manufacturing job might mean managing products and machines that communicate with each other.

Many workers will have to reskill, but this is a lengthy and challenging process. In the meantime, new jobs in the circular economy are likely to be resilient to automation for at least the next decade. This is because the circular economy replaces resource intensity with labour intensity. By saving money on materials, companies can afford to spend more on staff. Remanufacturing supports twice as many jobs as manufacturing; and recycling supports fifty times as many as landfill.

New recycling, remanufacturing and biorefining techniques may see their skill needs change in the long term, but these industries can provide good quality employment for the foreseeable future. Just ask Sanjeev Gupta, who wants to rescue the Port Talbot steelworks by switching to recycled feedstock and selling higher quality steel.

Job satisfaction
When jobs vanished due to previous technological revolutions, we invented new demands and created jobs to fill the gap.With 37 per cent of British workers reporting that their jobs are ‘meaningless’, we may need to change tack. Although green jobs are not the whole solution, renewables are hugely popular; circular economy employees report higher job satisfaction than the average UK job; and the cleantech sector is retaining its allure. Our own work shows that Generation Y wants companies that they purchase from and work for to be green. And it is clear that there is plenty of new, clean infrastructure to be built, of the order of $90 trillion’s worth, globally.

Overall, most of the employment benefits described above depend on policy: the development of jobs in this sector in the UK has been driven by EU rules, and new policy for the circular economy is currently being debated in Brussels. The international climate leadership that Britain has shown has been amplified by the EU. And this international co-operation has been critical to creating demand for the cleaner technologies which are now so popular.

There is a positive story to be told about how a greener economy can be better for everyone, including those who are currently getting a raw deal in today’s jobs market. We, in the environment sector, should be explaining and highlighting these benefits more clearly, and centrist politicians, if they are to keep their mandate, need to make them real.

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