Obama Punches America's Lights Out

One of Mr. Obama's signature story lines is that we can protect the environment, Save the Planet, and revive our economy by creating hordes of high-paying new jobs in new energy-related businesses.  Unfortunately, like the committed statist he is, Mr. Obama neglected to give the new industries time to develop or to ease the crushing regulatory burdens which are pushing jobs overseas.

Rather than letting customers decide what kind of light bulbs they wanted to buy, laws were passed in 2007 requiring that incandescent lighting be phased out by 2014.  Unfortunately for American workers, the new twisty fluorescent light bulbs require a lot more hand labor to put together than the old bulbs.  Thus, although the new lights were invented in America, no manufacturer actually makes the bulbs here.

Dim bulbs.

It should be no surprise to anyone that the upcoming ban is leading American manufacturers to close their doors and sack all their employees.  The Washington Post wrote on September 8, 2010:

WINCHESTER, VA. - The last major GE factory making ordinary incandescent light bulbs in the United States is closing this month, marking a small, sad exit for a product and company that can trace their roots to Thomas Alva Edison's innovations in the 1870s.

The remaining 200 workers at the plant here will lose their jobs.

Job loss here and job creation overseas is utterly unsurprising given the British experience.  In "'Green' lightbulbs poison workers" TimesOnline from the Sunday Times, May 3, 2009, reports:

When British consumers are compelled to buy energy-efficient lightbulbs from 2012, they will save up to 5m tons of carbon dioxide a year from being pumped into the atmosphere. In China, however, a heavy environmental price is being paid for the production of "green" lightbulbs in cost-cutting factories.

Large numbers of Chinese workers have been poisoned by mercury, which forms part of the compact fluorescent lightbulbs. A surge in foreign demand, set off by a European Union directive making these bulbs compulsory within three years, has also led to the reopening of mercury mines that have ruined the environment.

Here we have an unintended side-effect of European industrial policy which is being imitated uncritically by American industrial policy: European governments mandated a switch to compact fluorescent bulbs to reduce electricity use and ended up poisoning "large numbers of Chinese workers" and turning used light bulbs into what's technically hazardous waste because of the mercury content.

The Chinese have known about the dangers of mercury poisoning since shortly after the death of Confucius:

In China, people have been aware of the element's toxic properties for more than 2,000 years because legend has it that the first emperor, Qin, died in 210BC after eating a pill of mercury and jade he thought would grant him eternal life.

An American light-bulb factory may not employ the thousands it once did, but at least there were hundreds of jobs which paid as much as $30 per hour.  Environmentalist light-bulb mandates have created thousands of new "green" jobs - but on the other side of the world, and the jobs are not nearly as green as advertised.

Such market-bending regulations are particularly unfortunate in the light of technical progress - the efficiency of an old-style incandescent light can be doubled by zapping the filament with a laser.  "Regular Light Bulbs Made Super-Efficient with Ultra-Fast Laser" physicsorg.com, May 29, 2009, to be published in an upcoming issue of Physical Review Letters, reports that this can be done right through the glass after the bulb has been manufactured.

Now that the regulations mandating the new lights are in place, however, changing them to permit this new version of old-fashioned technology is going to be rather difficult, and 200 former GE employees are out in the street.

It's evident that Mr. Obama's pie-crust promises about creating green jobs aren't working all that well:

President Obama said last month that he expects the government's commitment to clean energy to lead to more than 800,000 jobs by 2012, one step in a larger journey planned to restore U.S. manufacturing.

Energy Savings May Not Be Realized

A twisty florescent bulb uses about 75% less energy to produce the same amount of light.  On this basis, activists have projected vast savings on electricity use if everyone switched.  Those rosy savings projections assume that people will be satisfied with generating the same amount of light which satisfied them back in the bad old days of low-efficiency incandescent bulbs.

The Economist argues that the anticipated savings may not materialize.  In fact, if light becomes cheap enough, demand may go up enough that lighting, which already uses 6.5% of the world's electricity, may use even more.  Their article points out that back in the days of candles, a typical Briton purchased 580 lumen-hours of light per year.  Today, the average Biron uses 46 megalumen-hours, almost 100,000 times as much.  As light became cheaper, people bought more of it.  There is no reason to assume that people's desire for more light would change as costs drop.

That, at least, is the conclusion of a study published in the Journal of Physics D: Applied Physics by Jeff Tsao of Sandia National Laboratories in New Mexico and his colleagues. They predict that the introduction of solid-state lighting could increase the consumption of light by a factor of ten within two decades.  [emphasis added]

If this projection of past behavior turns out to be true, mandating the switch to twisty florescent bulbs won't save any electricity at all, but the law surely will destroy more American jobs as more and more of our remaining light bulb factories turn off the lights and ship the jobs to China.

Why Manufacture Overseas?

If the innovations originated in America, why are all the manufacturing jobs going overseas?  Part of the reason is simply higher wages but regulatory burdens also play a major part.  In "The Regulation Tax Keeps Growing," the Wall Street Journal September 27, 2010, reported that the overall regulatory burden facing Americans was $1.75 trillion in 2008, or about 14% of national income.  This is in addition to taxes.

The cost works out to about $7,755 per worker for large manufacturing firms while small firms pay at least 25% more.  Thus, before the worker does a single lick of work, GE has to shell out more than $7,000 per worker just to comply with government regulations.  A small start-up manufacturer would face an even greater burden; there's simply no way for a new manufacturer to get off the ground without massive government subsidies.

The Washington Post observes that even though they make about 1/20 of American wages, Chinese wages are rising and workers are beginning to complain about industrial pollution.  One large Chinese lighting plant has 14,000 workers, but the company is trying to reduce employment to around 5,000 through automation to keep costs under control.

American automation skills are still pretty good.  We could have made the same productivity improvements and kept the jobs in America given time, but the hasty changeover imposed by the government left manufacturers no choice but to go to China for the reduced wages and reduced regulatory costs.

The Chinese company is talking about opening a factory in the US after it perfects its manufacturing process and gets the amount of labor needed down far enough.  Overall costs would be higher, but some retailers are saying that customers would pay more for bulbs made in the United States.  This project can't go ahead until the company finds government financing, however.  Private manufacturing investments are not all that common just now, particularly for processes involving hazardous materials like mercury.  NO matter how many forms were filled out ahead of time, there's no assurance that the factory would be permitted to operate once it was completed.

In the meantime, how many politicians does it take to change a light bulb?  Far too few.