Published on the Autonomy blog
What is the transition economy?
The green transition has been presented as a win for both workers and the environment: this is the promise that underpins its tenuous legitimacy as public policy. In its most radical incarnation, that of the Green New Deal, the transition to a low-carbon economy would benefit everyone. Supposedly. Capitalists would get government support for new investments; government would revitalise industry and ensure economic growth while stopping climate change; and workers would get good, secure jobs as well as a stable climate. Every report and every government pronouncement all say the same thing: the green transition will produce millions of jobs.
Yet it’s not turning out that way.
It should be obvious that there are not as many green jobs as were promised, and like in the rest of the economy, far more badly paid and ‘bullshit’ jobs are being created than well-paid, secure ones. To do otherwise the transition would have to push against the broader trend towards continued deindustrialisation and servicisation characterised by stagnant real wages and deteriorating conditions. The transition isn’t counteracting these broader trends, however – it is leaning into them.
The installation economy and the endless horizon of low-waged ‘green’ work
So far, what the green transition looks like is an installation economy.
Installation work is the labour of setting up and assembling systems and equipment on-site or in a specific location. From IT to construction to manufacturing, an under-appreciated amount of what we think of as manufacturing consists of setting up things made elsewhere. Within green capitalism, the labour of assemblage has displaced manufacturing as the key sector of job and business growth. A perfect example of this is the solar industry.
Employment in the European and US solar industry is booming. Most of this solar ‘industry’, around 80 per cent, in Europe and the US is a service and not a manufacturing industry. There are currently over 600,000 solar installers across Europe, with that figure set to climb to over 1 million by 2025. In the US, installation work is rapidly expanding, growing by 250 per cent over the past decade. And while there are some large employers, the bulk of the industry is based on agency work.
Solar installation in the US is like any other kind of agency work. Payments are often late, and workers frequently face days without enough money for bills or food, plus rising debt and overdraft fees. Installation work involves moving from site to site, producing a large iterant workforce, shorn of the protection of a local community. Workers report sharing hotel rooms or sleeping in tents and cars near remote sites, and many have horror stories of travelling to remote sites just to be told there is no work for them. Sick pay, days off, holiday pay – all of these are either non-existent or poorly enforced among many installation agency companies.
From glaziers and insulation installers to heat pump technicians, the green economy is an installation economy. Despite being labour-intensive work, it is better understood as part of the broad service sector rather than the manufacturing sector.
Importantly, the installation economy differs from other service sectors in terms of how demand is generated. While some demand is driven by consumer choice in a ‘pure’ sense (i.e., compelled by the desire to reduce emissions or have some kind of energy autonomy), most demand is generated through government subsidies and legislation. As with other service industries, sector growth is predicated on the continued expansion of employment – it needs job growth generated in other sectors in order to stimulate demand. As an industry with high up-front costs, however, it also relies on there being sufficient demand from those wealthy enough to afford the installations. In recognition of high up-front costs, government subsidises purchases, making sector growth dependent on government programmes and legislation.
While much installation work is precarious and low-waged, this is not a universal labour condition. There are substantive differences between different labour regimes, and within sub-sectors. While heat pump installers in Britain are paid well, as their labour is considered plumbing work and paid accordingly, the same cannot be said for solar panel installers. In the US there are substantive differences between unionised solar installation work on large arrays, and the far more precarious work of domestic panel installation. German workers in the installation economy are often paid slightly more than other skilled manual labour, UK workers receive around the same, while US workers are often paid significantly less.
One crucial cleavage in the installation economy is between those workers who command a high level of autonomy thanks to their skills and qualifications, and those who labour under much more precarious conditions doing semi-skilled or unskilled work. This cleavage plays out in wages and conditions both between industries and within them. Installation companies typically employ a mix of the two types of worker, assigning them very different conditions and rates of pay (something long fought over within the construction industry). Such a divide can impede the production of a shared class perspective, as interests diverge.
Installation work is often distributed through piece work or individual contracts, making it largely an extension of some of the least secure forms of existing service industry practices, not a break with them. In contrast to the promises of secure manufacturing jobs, the installation economy actively builds on the global neoliberal trend towards ‘non-standard’ work forms – zero hour contracts, precarious and sub-contracted employment, informal or grey market jobs. Close to 60 per cent of all new jobs in the OECD since the 1980s have been non-standard, with the average level of such work across OECD countries now running at 30 per cent. The installation economy is unlikely to arrest this trend; if anything, it will accelerate it.
Although big firms dominated the headlines, the reality is that most green jobs are in small or medium sized firms. Around 60 per cent of employees in Britain work for small or medium-sized enterprises (SMEs), while the figure in the US is just under 50 per cent of all private sector jobs, and 68 per cent in Europe. Across all three, SMEs make up over 90 per cent of all businesses, making it the single largest sector. While SMEs are highly diverse, in general their wages are lower and their conditions worse than in larger firms; job satisfaction too is often lower. There is little reason to think that green SMEs are run any differently to the rest of the sector.
In 2024 there were over 22,000 recorded net zero business in Britain, with small and medium sized enterprises making up almost 95% of these, supporting 270,000 jobs. If you include the supply chains, that rises to 950,000 jobs – 3% of total British employment.
The solar industry exemplifies this. Britain has just over 2000 solar panel installation businesses with almost 7000 employees (some reports claim 13,000). Businesses are small and labour-intensive. Wages start at £11,000 per year for apprentices, while the average wage is around £31,000 per year.
Growth is projected to be strong at 10%, matching broader net zero business growth. They typically have profit margins double that of other small businesses. Despite this, they have higher-than-average insolvency rates due to high capital costs, policy uncertainty, and consumer demand’s dependency on government support.
It is tempting to see the SME community as a narrow demographic. And yet there are millions of SME owners – not including the millions of people who are self-employed and share similar economic relations. SMEs are thus the key terrain of the transition economy buildout, giving small business owners incredible political power.
It is also one where bosses often experience work as precarious and at risk. In the US and Britain, 20 per cent of small businesses go bust in the first year. Forty per cent of American small businesses go bust in the first three years, while close to 60 per cent fail within Britain. The self-employed are twice as likely to be living in poverty as full-time employees. This struggle is the reason why over half of SME owners report having poor mental health over the past year.
There is no security to be found in this class, nor in the work of transition itself, despite the fact it is one of the few sectors of the economy posting high growth rates.
In place of new manufacturing jobs and the renewal of industry, what the transition economy produces is installation work organised through small and medium sized businesses, often working at the very edge of financial viability. Far from securing a green future, the transition is cementing many of the most socially destructive aspects of over 30 years of neoliberalism.