Leading Off: Another Hollow Framework

A never-ending stream of fancy words and studies are a hallmark of the “Just Transition” debate. Another study fell into our orbit here: “Scaling the JETP model”. It came courtesy of the august Rockefeller Foundation.

What, you might ask, is a JTEP?:

Just Energy Transition Partnership (JETPs) are a political and financial innovation designed to support emerging and developing countries to enhance the pace of their energy transition. At its core, a JETP is transactional, involving the exchange of a clear commitment from the host country to advance the pace of its transition [and thereby to avoid greater levels of CO2 emissions] for new commitments of grant, concessional and market-rate finance.

Right. Opaque, to say the least.

As we read through this turgid report, we waited for the discussion of workers. It comes here:

The “just” aspect of the transition from fossil fuels must be at the foreground of JETPs. Supporting the just transition of workers will be key to maintaining social legitimacy and political support through the implementation phase. This means creating and funding viable pathways from fossil fuel dependence for key fossil fuel industry workers and communities, targeting upskilling and retraining, among other activities.

While the sources of this funding will naturally differ for different countries, stakeholders expressed the view that
in all cases, the funds earmarked for “just” aspects have been inadequate to date. Because the “just” aspects do not
generally provide a return on investment, it is important that non-commercial funding partners, including philanthropies, are brought into a coordinated effort.

A second impediment to implementing the “just” aspect is definitional. There is misalignment and a lack of clarity around what “just” refers to when it comes to JETPs and where the boundaries lie. Finally, stakeholders pointed to the lack of established best practices and case studies to inform future initiatives and projects.

We point out throughout this project, and in previous newsletter issues, two fundamental problems in the Just Transition discussion. First, retraining and upskilling have, as a whole, been failures over the past half century because of a lack of serious investment and, more important, the overall economic trends pushing wages lower for many workers; in other words, being retrained and “upskilled” for a lower-paying job is not much of a promise for the future.

Second, we give credit to this study for recognizing that the funds “earmarked for ‘just’ aspects have been inadequate to date” and a lack of clarity about the definition of “just”. That’s progress. However, the problem here is clear but seems to escape the authors: a true “high bar” Just Transition can’t rely on philanthropy. The only “best practice” that will produce a desired result for workers has to come through collective bargaining, which puts workers on an equal footing in a negotiation over the terms and conditions of transition.

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Spotlight: Just Transition Need Not Waste Public Funds

Without a doubt, public money will be needed to underwrite a “high bar” Just Transition—through direct outlays from the treasuries of governments and/or through our proposed Global Just Transition For All Fund and/or, as we outlined in detail here, a “wires charge”. It’s a good use of public money to ensure communities are not economically hollowed out through the decarbonization process.

But, there are really poor ways of using public money.

The track record of the results of handing over public money through incentive packages to corporations is very poor. In the vast majority of cases, the packages—which can combine tax breaks, infrastructure subsidies (“We will build the roads you need to your factory”) and sometimes direct cash grants—never pay back their value, either in terms of economic development or promised jobs.

Second, the most crucial issue, however, is our refrain about jobs: if public money is spent with no promise to pay wage levels that would equate to a “high bar” Just Transition, then, it’s a waste of resources.

Ideas: We Need A Global Deep-Dive On ReTraining

We’ve been critical of the enormous amount of money going into retraining because the results are quite underwhelming—meaning, looking at the actual prospects facing displaced workers and the kinds of wages offered in the jobs on offer. This isn’t just a problem raised by climate change—retraining and reskilling efforts going back decades have produced mediocre outcomes, as we’ve noted in our lead item today.

As yours truly explained in this 2021 study:

A central fallacy of the entire retraining philosophy is its heavy reliance on the notion that education is key to a successful next job chapter. This is false: the overriding factor in jobs today is based not on competition over skills but competition based on wages. No matter how smart a person is, there will always be someone who will do a job for less if there is no minimum standard – minimum standards set by unions or, at the very least, a livable federal minimum wage. So, education, which in the abstract is not objectionable, is the wrong answer to the question of how people will have any kind of economic stability.

It’s also true that most retraining programs are ill-conceived because (a) they don’t start at the workplace while a worker is still employed and, related, (b) the programs are under-funded in terms of what it would take to make it financially possible for a worker to participate (for example, paying for child care costs)

To get to the bottom of this problem, it would be worth considering a global, honest, inquiry into the track record of retraining and reskilling programs. The inquiry would look at the real outcomes for workers over a long period of time. We can suggest a set of metrics for the inquiry but, at the end, a program could only be deemed a success if a worker landed in a job with equal pay and benefits to a job lost.

Opinion: Retraining Plans Should Be A Family Affair

By Jonathan Tasini

Retraining, or re-skilling, has generally been a failure over the past four decades. Almost all retraining schemes lack the kind of funding needed and, too often, workers are pushed into retraining frameworks that don’t match up with the real job market.

At heart, the problem is the underlying philosophy of re-training—the efforts are mostly political, designed to tamp down controversy rather than restructure economic systems that lead to job losses. We see a very significant problem: retraining is too often viewed through the lens of the participation in a program by one worker, which ignores how retraining influences an entire family.

Here is a very specific example: let’s say a retraining program requires a laid-off/unemployed worker to show up at a class or site ten hours a week for ten or 12 weeks, and that participation requires significant travel to and from the training location (not an unrealistic assumption in geographically spread-out communities). But, when a worker is pushed out of a job and, then, ceases to be a breadwinner for her/his family at a full-time income, it’s entirely possible that that would force a spouse/partner into the job market.

What, then, happens to childcare in a home? Who will provide childcare when a worker is required to show up for a class? Roughly 350 million children in the world lack proper childcare. UNICEF points out that, within the OECD and EU, “Luxembourg, Iceland, Sweden, Norway and Germany rank the highest on childcare provisions among high-income countries. Slovakia, the United States, Cyprus, Switzerland, and Australia rank the lowest.”

The point is: policy makers who are calculating the cost of retraining have to have a much broader field of vision. Funding has to be hefty enough to make it actually possible for a worker to take part in retraining—and, to date, the individual allocation for a worker is quite miserly. Let’s make it really affordable by putting in the equation the full costs a worker bears.

Tasini is the founder and executive director of Just Transition For All

Links

Stand Up Tesla: a site for Tesla workers to sign an Authorization Card to join the UAW.