We have tried the “Quick Fixes” and they have failed. Government efforts of throwing money at our structural problems have not restored our economy and jobs.
The path to restoring our economy, jobs and human health is to address the structure of the problems.
For example, we can’t afford to use other people’s oil because every time we begin to realize economic growth the price of gasoline shoots up and blunts our success.
The answer is that American consumers should buy American-made electric cars.
The basis of my economic analysis is here. Automobile manufacturing in America creates 13-20 jobs per 100 cars produced. These jobs offer the highest wages in American manufacturing. Today there are approximately 698,000 auto manufacturing jobs. Buying 13 million American-made cars would represent 1.6 to 2.6 million jobs. A commitment by the American consumer to annually buy 13 million American made cars would cut our current unemployment level to around 7%. Because new jobs create new jobs due to local salaries being spent locally the potential is for a reduction of the unemployment rate to what economists define as full employment or around 5-6% unemployment levels.
Utilize American Buying Power. There are over a 137 million cars in the United States. If American consumers purchased 13 million electric cars every year for the next ten years, we would forever slash our dependence upon foreign oil.
Slashing our dependence on foreign oil will create additional economic growth and new jobs. The United States imports 4.3 billion barrels of oil a year. At $100 per barrel, that represents $430 billion of the American consumer’s money going out of the country and into someone else’s pocket. According to the Dallas Federal Reserve about half of our nation’s oil consumption is used to produce gasoline. So if the American consumer would switch over the next 10 years to electric cars from gasoline cars approximately $200 billion would be put back into our economy rather than shipping it overseas (assuming that the price of oil in ten years is only $100 per barrel). $200 billion a year is about half of what President Obama proposes for a one time job-creation program to spark new job growth.
Lower health care expenditures would be another economic benefit if the American consumer buys electric cars. American Lung Association research on the health care cost benefits created from more energy efficient cars in California projected $7 billion of annual savings. The potential for the entire United States could be as high as $35 billion in annual reduction in health care costs. This is the type of constructive path America needs to take to address the negative impacts of our country’s economy and jobs growth created by escalating health care costs.
There are also economic and environmental benefits that electric cars can create if they are recharged from a grid using renewable energy. In a recently posted article I profiled a winery which offers of FREE recharges to their customers from an electricity supplier that invests heavily in renewable energy. Ford is offering a solar recharging station as a purchase option with the launch of their 2012 electric vehicles. Imagine being able to buy solar power from a company like SunRun that guarantees a 20 year electricity price that is competitive with today’s utility-supplied electricity. Imagine using this energy to power your electric car. This combination of solar power plus electric cars holds the potential to eliminate the depressing effect that volatile and higher pump prices have upon our economic growth.
Most importantly to car owners, there is emerging evidence that operating an electric car costs less to operate than gas powered alternatives. One Chevy Volt owner reported in a comment on my article profiling test drives of the Volt and Mitsubishi i Electric Car that the cost of driving 3,900 miles was $60 in gasoline plus $1 per day in electricity. This is the substantial cost savings most American families need to rejuvenate their family budgets.
Am I preaching to the wind? Possibly not based upon research by the American Lung Association that found, “Fully three-quarters of voters support “stricter limits” on smog emissions and three-quarters say that Congress should NOT stop the EPA from updating these smog standards.”
This survey’s findings inspired this article. We don’t have to vote for change or depend on an elected official or a government agency to create jobs and restore our economy, our health and the environment. The power to create change is in our collective buying power.
The path for change requires leadership. This leadership needs to have the financial strength to overcome the economic risk of buying a new technology like an electric car.
I nominate the affluent to be our buying leaders. There has been a lot of political debate on raising income taxes of the wealthiest Americans. Some higher net worth individuals like Warren Buffet and Bill Gates have supported this higher tax as a fair solution to the country’s debt problem.
Another step that these high net worth consumers could take now on behalf of our country is to buy an American-made electric car. This would be hugely important for two reasons. First, if they did then the rest of us would take notice. Early adopters purchase a cutting-edge new product, then increased product demand occurs among a broader set of consumers, which creates marked traction. My Mid-western parents called it “keeping up with the Jones.” Moving consumer perception of electric cars to a level of “coolness” comparable to owning a BMW or Mercedes would be a huge contribution those with higher incomes could contribute toward the adoption of American-made electric cars.
A second benefit will be lower prices for all consumers if the affluent began mass purchases of electric cars. Volume purchases of American-made electric cars would generate economies of scale in manufacturing which could lower per unit prices if cost savings are past onto consumers by competing car manufacturers.
This is a unique moment in history for the American consumer. Can we collectively come together to buy products like American made electric cars that will realize the jobs growth we increasingly demand of our politicians and CEOs?
Most specifically, can we collectively commit to buying American-made electric cars as the solution to restoring our economy, jobs and our health?
Bill Roth is the founder of Earth 2017, a company that connects businesses with customers seeking smart, healthy and green solutions. His book, The Secret Green Sauce, profiles business best practices for making money and a difference.