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Pavlina Tcherneva, one of the economists behind the idea, explains how it can fight the climate crisis and promote economic stability for American

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DHARNA NOOR: It’s The Real News. I’m Dharna Noor.

The Green New Deal, a plan to rapidly decarbonize the American economy and create millions of jobs, has captured headlines. A resolution introduced by Alexandria Ocasio Cortez, the representative from New York, and Senator Ed Markey outlines the need and plan for the program. And the resolution calls for a very specific policy to ensure the creation of these millions of green jobs, a federal jobs guarantee.

Now joining us to talk about that is economist Pavlina Tcherneva. She directs the Economics Program at Bard College and she’s provided research to Ocasio Cortez’s team on the proposal for a jobs guarantee. Thanks so much for being here today.

PAVLINA TCHERNEVA: Thank you for having me.

DHARNA NOOR: So before we get into the specifics of this program, talk a little bit about what something like a jobs guarantee is doing in the Green New Deal. Why aren’t climate change and employment two separate issues?

PAVLINA TCHERNEVA: Well, the Green New Deal, as see it form in the public consciousness and debate, is really a call to action, and it’s a call to action to address the climate concerns. But there is a broad recognition that really, the climate threats cannot be separated from other forms of insecurity that people experience in their daily lives, and that is economic insecurity. So basically, environmental policy to tackle climate change is essentially economic policy, and every economic policy has impact on jobs, on livelihoods. And I think there is a recognition that when we make this call for action to address one existential threat, and that would be the threat of climate change, we are essentially saying, “Look, we’re going to do it in a way to address other existential threats that might not be so visible, but they’re ever-present.” And those would be basically the absence of an adequate number of jobs, of well-paying jobs, poverty, inequality, and various other socioeconomic concerns. So they are organically linked. One battle is essentially the same thing as the other battle.

DHARNA NOOR: And of course, the resolution aims to create these millions of jobs, at least in part, to create the new infrastructure that would be needed to support this new green economy. What kinds of jobs would those be? I mean, they can’t possibly all be in constructing solar panels or wind farms. So what kinds of jobs?

PAVLINA TCHERNEVA: Well, I think it’s useful to think of the Green New Deal as a mass mobilization effort. So here we are really talking about an urgent, very bold, very ambitious program that restructures the economy to make fossil fuels a thing of the past and transition to clean energy. The goal here, of course, is to stabilize carbon emissions and to limit warming within the decade. So we’re going to be talking about a wide range of jobs that will be in the energy sector, in the agriculture sector, in the infrastructure sector, to address problems of fallout from climate change, like the fires that we’re watching in California, like the destruction that we see from hurricanes and tornadoes and floods. So we really are talking about a comprehensive program.

But I think it’s useful analytically to distinguish the millions of jobs that will be created through the green investment from specifically the Job Guarantee. The Job Guarantee has a unique purpose within this program, and that is the following, that it is essentially the backstop, it is essentially the safety net. It is a program that says if you have lost your fossil fuel job, so to speak, and you have not yet been incorporated into the green sector, we will ensure that transition for you, we will provide the safety net and employment opportunities in the interim in this transition, which for some people will be disruptive, and most likely for the most vulnerable it will be disruptive.

DHARNA NOOR: And the New Deal, FDR’s New Deal of the 1930s, included protections for organizing with the National Labor Relations Act, the Wagner Act. The Green Deal resolution specifies that the jobs created under this Jobs Guarantee would be unionized. How could the policy protect workers’ right to organize?

PAVLINA TCHERNEVA: Well, I think that’s a very important aspect of the Green New Deal. So here we’re talking about inclusive policies. We’re talking about policies that will address climate change, but will directly target job creation in the most vulnerable communities that experience the floods and the problems with the absence of clean water and pollution and hazardous site areas. And so, we’re talking about not only creating jobs, but really creating jobs in some of the most distressed communities. And those communities also have been the ones that have been lacking decent, good jobs for decades. And we have seen not just the deindustrialization of some of these areas, but also the assault on labor rights, for decades.

So here, the Green New Deal is turning the tide and saying look, if we’re going to be creating jobs, and this will be an “all hands on deck” kind of policy, we have to make sure that people are not going to be working in poverty wage jobs. They will be working in decent jobs. So part of that will include a number of labor protections and putting people into union jobs. I think prevailing wages will be one aspect of the Green New Deal. But other people who may not be able to find those employment opportunities, perhaps the most vulnerable amongst us, with the least amount of skill or education who could still contribute to the program, will be absorbed in the Job Guarantee, that we’ll find them employment befitting their skill level. And this is not explicitly stated in the Green New Deal, but the Job Guarantee itself can be unionized.

But I want to stress something else. The Job Guarantee, by its nature, formalizes the labor market in ways in which we have not seen from public policy in the past. Imagine a world in which we have a Job Guarantee as a public option for jobs, as a policy that guarantees a basic economic right, that says no one, even the most vulnerable among us, will fall below a certain wage level. And so, we will provide jobs and a base wage with some basic benefits. That has a transformative effect on the entire labor market on the entire spectrum of jobs, because that becomes the standard. And then private employers and public and nonprofit employers will have to meet the standard.

DHARNA NOOR: So I do want to talk about that a little bit more. What role, exactly, should the private sector play in this? Because, of course, so much of the American economy is in the private sector, so it seems that in order to create jobs that are in the public sector, you would need to rely in some way on the private sector. Because currently, there is not the ability for the public sector to create things like wind farms or solar panels.

PAVLINA TCHERNEVA: That’s right. And so, that’s why I tend to think of these two programs as symbiotic, The Green Deal and the Job Guarantee as symbiotic, but somewhat different in their intent and in their macroeconomic effects. The Green New Deal is, as I said, all hands on deck. We’re going to need all level of skill, knowhow, a technique of production, innovation, et cetera. And that investment, large scale mobilization, will no doubt have to be led by the public sector. But as a practical matter, it will be some sort of partnership through private firms that already perhaps are employing green technologies and that we need to scale up, and that can be mobilized to help with the transition. So it is important for the public sector to take that initiative because the private sector so far has not had the incentive to do so and has really made very few strides towards the transition to a green economy, and we really need a very rapid response. So that’s number one.

The second is the Job Guarantee component. And that Job Guarantee component, as I said, is a public option. It’s a transitional jobs program that allows people to find employment opportunities if they have been displaced from hurricanes, find opportunities if they have been laid off, maybe because of recessions, maybe because of restructuring, and then transition out of that program either in these large scale mobilization green efforts, or elsewhere in the economy. So the Job Guarantee has this very specific function of providing a transitional employment opportunity that is decent, that is well-paid, and that allows people to transition in the appropriate places elsewhere in this new economy, green economy. And so, we also need the public sector to lead the way there, because unemployment is not something that the private sector resolves on its own. And if you’re going to have structural change, you just need to have a backstop, something to capture people in the transition.

DHARNA NOOR: So if there does need to be some reliance on the private sector, or some sort of public-private partnership, how do you regulate how much profit can be made, or ensure that private companies don’t just overcharge the public sector to make a profit like you sometimes see in the arms industry and other industries?

PAVLINA TCHERNEVA: I mean, again, I should say the Job Guarantee is a public service employment opportunity. We have worked on that program way before the Green New Deal captured the imagination of the public. And I have always spoken of the Job Guarantee as a Green Job Guarantee, as one that takes care of environment, of public spaces, of communities, of people, that basically serves the public good, the public needs, and really addresses neglected areas of the public sphere. So the Job Guarantee has always been a publicly designed, federally funded, but locally administered program to serve the public good. And so, I still envision it that way, even part and parcel of this bigger agenda that we are trading forward.

Now, when we talk about transforming the grid, for example, the energy grid, I still think that this has to be a public initiative. Because we recognize that the transformation has public concern, widespread public concern. It cannot be done if it is done for profit, and it will not be done adequately if it is done for profit. So as a practical matter, probably private firms will be getting some contracts to put the large scale investment that is necessary. But as it has been done in the past, there is some bidding in the contract process. There are some other considerations in the implementation of these investments that are beyond the scope of profitability. In some cases, the profit margin can be capped, and there are protocols about how this can be done. But because these are investments that serve the public purpose, you have to essentially think of them as utilities that are not run for profit, but are run for the public good.

DHARNA NOOR: And does that mean that you somehow absorb the fossil fuel industry into the public sector? Like how do you compel a Shell or an Exxon to get on board with it? Through regulation, then?

PAVLINA TCHERNEVA: It will have to be a range of these options. The most effective will be simply to put the investment in the alternative infrastructure. Because we know that Exxon for a very long time has known the impacts on fossil fuels, on climate. We know that in fact they led some of the really important scientific inquiry to find that the source of man made climate change is burning fossil fuels. But they did not find it profitable to pursue an alternative course of action. In fact, for them it was more profitable to spend millions of dollars on misinformation for forty years. So we can’t incentivize them to do the right thing, it’s clear. We need to be able to make the alternative investments and essentially make the fossil fuel business unviable. And so, this is the reason why it’s the public sector that has to take the investment initiative. All of these alternative proposals that are emerging from carbon taxes and market-based initiatives still work within the old paradigm, that somehow, someway there is a possibility of incentivizing the current polluters to change course. And they have had their chance.

DHARNA NOOR: So there’s been quite a bit of debate about how to pay for this. Obviously, this would take massive investment from the public sector. And some people say that we need to defund the military to provide the funds for, some people say we need to tax the rich at a much higher rate. Others, I think like you, say that reallocation isn’t really the right way to look at it, that the fights can be decoupled, and what we need to be concerned about is ensuring that the legislation just passes. But either way, I think that with a Republican controlled Senate, a Republican controlled White House, and even many Democrats who might be wary of passing legislation like this, that seems to be so radical and so radically different, there’s a lot of challenges to be had in proposing any of this kind of legislation. Could you talk about what you plan to do and what the movement plans to do to take on some of those challenges?

PAVLINA TCHERNEVA: Well, the first thing is, I think, the pressure from the public. These are enormously popular programs. The Green New Deal is enjoying overwhelming support, young people especially are behind it. The components of the Green New Deal also have overwhelming support. And so, while you may hear that these are somehow radical proposals, unviable, every one of their components are extremely popular, from the universal healthcare, which is the component that enjoys seventy percent popularity, to the Job Guarantee component that has sixty-five percent popularity, to the Green New Deal that is also in the sixties. Essentially it’s a mainstream program. So what we really need to have, I think, is a groundswell of support from the public. To use FDR’s words, when he was putting in place the New Deal, he basically told his electorates, “Make me do it.” And I think that that is what is going to have to happen. There has to be enormous pressure, and I think we see it. So I’m cautiously optimistic that whether presidential hopefuls or future members of Congress will feel enough pressure to start doing something meaningful.

DHARNA NOOR: Ok, well as we see where that groundswell of support takes us, we’d love to talk to you again. Again, we’ve been speaking to economist Pavlina Tcherneva. Thank you so much for being on today.

PAVLINA TCHERNEVA: Thank you for having me.

DHARNA NOOR: And thank you for joining us on The Real News Network.

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Pavlina R. Tcherneva is an assistant professor of economics at Bard College. She previously taught at Franklin and Marshall College and the University of Missouri-Kansas City. During 2000-06, she served as the associate director for economic analysis at the Center for Full Employment and Price Stability, where she remains a senior research associate. In the summer of 2006, she was a visiting scholar at the University of Cambridge Centre for Economic and Public Policy, and since July 2007 she has been a research associate at the Levy Institute.

Tcherneva conducts research in the fields of modern monetary theory and public policy, and has collaborated with policymakers from Argentina, Bulgaria, China, Turkey, and the United States on developing and evaluating various job-creation programs. Her current research examines the nexus between monetary and fiscal policies under sovereign currency regimes and the macroeconomic merits of alternative stabilization programs. She has also examined the role, nature, and relative effectiveness of the Federal Reserve's alternative monetary policies and the American Recovery and Reinvestment Act during the Great Recession.

Tcherneva is a two-time recipient of a grant from the Institute for New Economic Thinking for her research on the impact of alternative fiscal policies on unemployment, income distribution, and public goods provisioning. Her work has appeared in the Review of Social Economy, Journal of Post Keynesian Economics, International Journal of Political Economy, and Rutgers Journal of Law and Urban Policy, among other journals, and she is the co-editor of Full Employment and Price Stability: The Macroeconomic Vision of William S. Vickrey (Elgar, 2004). In January 2013 she received the Helen Potter Prize, awarded annually by the Association for Social Economics to the author of the best article in the previous year's Review of Social Economy.

She holds a BA in mathematics and economics from Gettysburg College and an MA and a Ph.D. in economics from the University of Missouri-Kansas City.