Greening the U.S. Economy

During the Greater Washington Economic Conference held today, January 16 in Tysons Corner, Virginia Stephen Fuller, Ph.D. (Director, Center for Regional Analysis, School of Public Policy, George Mason University, Fairfax, Virginia), along with local industry professionals presented the ‘drivers, challenges and outlook going forward’ for the Washington DC area economy.

Peter Coy, Bloomberg BusinessWeek, reported that the GDP measures change in consumption, inventory, government, and net export. As of today consumption is stable with unemployment dropping, businesses have capacity to invest in future growth, government is shrinking while spending is increasing, global trade deficit is dropping, and the U.S is currently the largest producers of electro carbons in the world. However, these trends can easily be overturned by policy makers, the Federal Reserve actuating inflation, or spikes in oil production & prices in the Middle East. The takeaway from this conference are that economic factors support the belief that the economy will grow moving forward.

Multi-family and single family construction adds the greatest value to the economy, i.e., growth in GDP, spurs investment, and rise in consumer spending. The five growing sectors are professional/business, construction, education/health, hospitality, and state/local. DC is the 5th largest economy with its private sector driving the market; professional and business sector service is DC’s largest sector. The questions we were left to ponder are:

1.       Will qualified workers fill the jobs?

2.       Will supply of housing house future workforce at an affordable cost?

3.       Will infrastructure support future growth?

There is a need for growth in value added jobs (mid wage and high wage jobs) according to Stephen Fuller, which have the potential to drive the future economy surpassing current projections; from 2010 - 2013, low wage jobs have surpassed low & high wage jobs. The creation of “green” jobs can address this issue and stimulate the economy. The green economy is based on six main factors: renewable energy, green buildings, sustainable transport, water management, waste management, and land management according to Van Jones seminal book, The Green Collar Economy.  There are opportunities in the Washington DC region to improve on our pattern of consumption. For example, transit oriented development can counteract  land constraints inside the Capitol Beltway and the acceleration of vehicle miles traveled in this region. Studies show that smaller apartment units, called micro-units, are appealing to the millennial generation; they are occupying less square foot of space. There are opportunities to repurpose and modernize how we move forward in growing our economy.