Tuesday, March 29, 2011

Jobs vs. the Environment: Again?

An effort to change the language in the Montana Constitution that guarantees a “clean and healthful environment” failed in the state senate this week by a vote of 26 for and 89 against. The change is promoted by supporters because the wording gets in the way of energy and other development in the state – it is either jobs or the environment. But is it?

A recent paper in the Journal of Economic Geography - The Rural Growth Trifecta: Outdoor Amenities, Creative Class and Entrepreneurial Context by some economists at the Economic Research Service and the University of Tennessee suggests otherwise. They wanted to look at the economic performance of counties that attract members of the “creative class” – Richard Florida’s label for those well-educated entrepreneurial types that engage in business startups and who possess high levels of social capital. The creative class includes professionals who work in high-tech sectors, financial services, the legal and health care professions, and business management; technicians working in materials engineering, medicine and research. They may be people who apply their problem solving skills to management or business processes. Creativity is a valuable commodity. The almost 40 million people that make up this cohort make twice the salary of the so-called “working class” or “service-class” worker.

Creative class workers are relatively footloose in their choice of where they live and work. They are drawn to places that offer interesting lives as well as interesting work. For many, not all, rural areas have a lifestyle appeal. If your income is generated by ideas, you can live almost anywhere you choose. With good access to the Web and the occasional airplane trip to do business, many rural locations are great places to raise a family and enjoy a healthy lifestyle in a desirable climate.

Here is what the authors found. Recruitment of creative class members was not in itself sufficient to explain economic well-being as measured by business startups and job growth. Rather, it was those counties with a high level of local outdoor amenities that demonstrated the highest levels of economic success. The counties that performed best were those with high numbers of members of the creative class, a very entrepreneurial context (i.e. friendly to small business) and high levels of outdoor amenities. Conversely, those counties that did not do well engaged in “smokestack chasing”. These low amenity counties rely on outside employers and access to low-cost labor and natural resource endowments.

The lesson for Montana is that preservation of our quality of life – a clean and healthy environment, diverse recreation opportunities, and intact scenic beauty, are good for our economy. I published a paper that demonstrated this fact almost 20 years ago, others have been reinforcing the point ever since. The tradeoff is not jobs or a clean environment. The lesson is that our constitutional right to a “clean and healthful environment” is good for Montanans and good for our economy.

There are things the legislature can and should do to ensure our environmental values leverage a healthy economy. I will address those in a future post.

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