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Copenhagen Fools the Young Into Hoping for Jobs

Author: Amity Shlaes, Former Hayek Senior Fellow for Political Economy
December 8, 2009
Bloomberg

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Youth is what the climate change conference in Copenhagen is supposed to be all about.

The advertising campaign for the United Nations Climate Change Conference on global warming that opens this week is even called "Hopenhagen," to suggest that young people need to push their governments to save the Kyoto Treaty if they are going to prevent environmental apocalypse.

One reason that Hopenhagen has caught on is that youth fashion these days is as green as it gets. Copenhagen, thrift and handbags made of recycled seatbelts all go together in the under-30 mind. At Williams College in Massachusetts, some 50 students and faculty started a hunger strike to show their support for a climate-change agreement. UCLA students who are attending Copenhagen with their professor have called the event a "rock concert for climate geeks."

The missing part of that message is that environmental accords like Kyoto can actually kill hope of a more mundane kind, like the hope for a job. And that's especially true when it comes to the darlings of the UN campaign: the young.

The reason this is so predates plans for Copenhagen or even the green movement. Employers tend to rehire or hire others before the young, and lay off or fire young workers when job- cutting time comes.

There's also an issue of hope, to use the Copenhagen lexicon. Employers doubtful of the economic future are reluctant to make a commitment to someone who expects to enjoy long-term employment at the workplace.

Cutting Mode

And what puts employers in lay-off mode? Recession for certain, but also any factor that makes production more expensive. Dozens of studies, for example, have demonstrated that just one such cost increase, the raising of the minimum wage, hurt hiring or employment of younger workers in the U.S. And that's true elsewhere.

In a multidecade survey of 19 countries, authors Juan F. Jimeno and Diego Rodriguez Palenzuela found that minimum-wage rules, along with high taxes, depress youth employment. High-tax Denmark's joblessness is well below that of the U.S., but Denmark is also among the nations where youth unemployment ranges higher than unemployment of other workers. You can imagine that some Danes feel fairly hopeless about this.

In economic terms, a mandate such as Kyoto's isn't different from a tax or a minimum wage. It hurts employment. The current cap-and-trade legislation is so structured that the pain comes not in the initial years, when the regime begins, but later, when restrictions for firms are more formidable.

Prime Time

The real blows come by 2030 -- a period irrelevant for many older workers, but a prime earning period in the future of Copenhagen's youthful attendees. Margo Thorning at the American Center for Capital Formation, a Washington policy research group, ran the numbers on the American Clean Energy and Security Act of 2009, sponsored by Democratic congressmen Henry Waxman and Edward Markey. She found that this legislation could kill as many as 2.4 million U.S. jobs by 2030, just about when today's Copenhagen youth will be paying for their children's college.

That includes some jobs in Massachusetts, home to Williams College, and 220,000 to 300,000 in California, where UCLA is located.

Countries such as Denmark are in many ways greener than the U.S., and the presumption of American college students is that that means such countries are inherently better. That confidence might be shaken by news that in Denmark, the low unemployment rate notwithstanding, the number of unemployed Danes who don't find work for a year or more has been around two in 10 in the past decade, while in the U.S. the rate was about one in 10.

Unfair Trade

Defenders of cap-and-trade would argue that billions in revenue the government receives under the law can make up to the poor what they lose in jobs. But it's hard to imagine the tax break of $359 per household, the proposal in one bit of legislation, compensating for a lost job.

It is possible that forgoing those jobs is a social choice this country has made as a collective. When Americans elected Barack Obama, not John McCain, they might have been saying: we care less about improving the economy than we do about social or lifestyle improvements. Economists track such collective choices using something called the Environmental Kuznets Curve, which suggests countries choose to be greener as they become wealthier.

Conscious Choice

But the question this time is whether that choice is being made consciously. One senses that being green to college or high school students tends to mean buying that recyclable messenger bag, not doing without the salary that enables you to buy the bag. You can hardly fault them for being unaware of trade-offs, bombarded as they are by teachers, their government and YouTube with the message that the greening of America offers pure advantage.

As Denmark's own environmental skeptic, Bjorn Lomborg, has argued, the point here isn't to say that carbon emissions don't do damage. They do. The point is that Kyoto is, as Lomborg put it, "an incredibly bad deal" when you compare the pluses and minuses. The future can't be all Hopenhagen. It has to be Hope- for-Jobs as well.

This article appears in full on CFR.org by permission of its original publisher. It was originally available here.

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