April 09, 2010
Corn Commentary (Blog): Ethanol and Jobs
New jobless claims took another jump last week and unemployment for the month of March continued to be just a couple of ticks below 10 percent nationwide. That’s a whole lot of people out of work.
But it is interesting to note that four of the six states with the lowest unemployment rates are top ethanol producing states (IA, NE, SD, and KS).
The 2010 Ethanol Industry Salary Survey by Ethanol Producer Magazine, estimated that the ethanol industry is directly or indirectly responsible for almost 500,000 jobs nationwide. More than 75% of those workers earn at least $50,000 per year and virtually every one of them has health care benefits. Many of those jobs are in rural areas that have literally been revitalized by ethanol plants, as Renewable Fuels Association president Bob Dinneen noted in a January editorial in the Huffington Post. Towns like “Janesville, Minn., where a new 120 million-gallon-a-year ethanol plant is now not only the town’s largest employer, second only to the school district, but also one of the biggest property taxpayers in the county.”
These are real jobs for real people in real America. But recent studies indicate they could be lost if the ethanol tax incentives are allowed to expire at the end of the year.
A study prepared by IHS Global Insight determined that it could cost as many as 160,000 full and part-time jobs. Another study, done by the University of Missouri’s Community Policy Analysis Center, found that six states would see the largest declines in jobs due to removal of the ethanol import tariff – NE, IA, IL, MN, IN, and SD. Three of those are states that currently have unemployment levels as much as half the national average.
More research done by economist John Urbanchuk shows that even non-traditional ethanol producing states like California, Texas, Georgia, Colorado, and Tennessee would be hit by job losses due to the expiration of the Volumetric Ethanol Excise Tax Credit (VEETC). The number of jobs losses ranges from as few as 16 in Louisiana, to nearly 30,000 in Illinois.
Amazingly, the coalition that includes the Grocery Manufacturers Association, the American Meat Institute, and other groups representing food corporations, oil companies, environmentalists and boat manufacturers is now claiming that corn ethanol is bad for rural communities! That claim is backed up on their new website – FollowTheScience.org (or is it FollowTheMoney?) – by a single study done by AMI and the poultry industry that alleges some 5500 jobs were lost in 2008 when meat processing plants closed because ethanol made the price of feed too high. Yet the Congressional Budget Office report released in April 2009 and a recent report from the UK found that it was mainly higher oil prices that drove prices for both food and feed higher in 2008. That was proven true last year when the amount of corn used for ethanol increased from 2008, but feed and food prices went down.
At a time when America is bleeding jobs, we can’t afford to lose good ones like those created by the ethanol industry. Renewing the VEETC and the tariff will help retain those jobs – increasing the blend rate to 15 percent will help increase them. Ethanol – Real Jobs for Real People!
