There’s good news in environmentally-conscious circles with a new study on recycling— the recycling industry is creating jobs across North Carolina. According to Recycling Means Business! The Impact of Recycling on North Carolina’s Economy, North Carolina’s ‘recycling economy’ is now considered to be one of the fastest growing job engines in the state. Since raising the employment rate is the goal of most economic policy at the state and the federal level, the boom in recycling related jobs should be cause for celebration, as the recycling reports and the underlying study suppose.
Not all jobs are created equal, or at least, not all jobs are created equally legitimately.
The prime example is based upon Bastiat’s essay That Which is Seen, and That Which is Not Seen, which reveals the false reasoning behind make-work employment schemes. Bastiat’s example debunks the famous (and fallacious) “broken window” route to prosperity; his analysis applies equally to pyramid-building, and similar employments that give the illusion of creating economic growth, while instead diverting resources away from other productive uses.
As for the employment benefits of recycling? The North Carolina study notes that recycling requires more employee hours per ton to recycle trash than to landfill it. In any for-profit industry, using more resources than necessary to accomplish a task is no benefit, it just drives up costs.
The demand for labor in any production process is known in economics as a ‘derived demand.’ That means that employment in an industry depends upon the demand for the final product that the industry is putting on the market. The housekeeping industry employs workers because homeowners and hotels want housekeeping services. If hotels and homeowners find that there is a faster or cheaper means to the same end, the demand for house cleaners will fall. If consumers want recycled materials, there will be a corresponding demand for resources to produce them, but how will we know?
Make-work jobs and projects, in the absence of a consumer demand for the product, simply misdirect resources. All resources are scarce, so we can presume that consumers had an alternative use for them. Therefore mandatory recycling—in the absence of a market demand for recycled products—forces resources into a use consumers did not choose. Like pyramid-building, mandatory recycling will utilize lots of resources, but with a command rather than a market approach to employment. The down side of mandatory recycling is that market signals about how much, what kind, and where to recycle materials are garbled and unusable. What’s left is pure guessing or political decision-making. For the same reason that socialized economies never got the quantity or mix of products right in the former Soviet states, U.S. environmental policy is unlikely to hit upon precisely the right mix of manufactured recycling here.
Finally, recycling uses up scarce material resources, and not just labor. Although claims about the benefits of recycling are usually repeated as foregone conclusions, investigation reveals that many types of recycling are more costly than landfills or incineration, produce waste more toxic than the waste it is trying to reduce, and cost communities more than the benefits they generate.
Recycling does not even “save” resources like trees. For-profit industries grow trees with paper pulp in mind, so producers have always been able to determine what the optimum quantity of trees to grow and harvest should be. In fact, some recycling operations have complained that consumers aren’t using enough disposable goods, making recycling uneconomical. This odd twist has some recycling advocates complaining of too little available trash.
How should recycling be handled? Privately, preferably, and by considering costs and benefits through a market lens, as any business would. Firms should develop products made from recycled materials and try to market them to consumers, if they believe they can. Mandates for recycling blindly assign resources and ultimately harm the consumer, as thoughtful critics and advocates alike are realizing. Finally, stop pitching the higher costs and resource uses attributable to recycling as benefits. As many communities have learned, right now they are high-cost jobs of questionable economic value.