Where Did All The Jobs Go?

This analysis of Northwest economics and employment indicated in 1992 ago that industry claims about lost jobs were nothing but finger-pointing.

Economic Facts Argue for Forest Bill

By Tom Giesen

Thursday, conservationists had a bill introduced in Congress to establish an ancient-forest reserve system that will protect all or most of the ancient and native forests in the pacific Northwest.

I believe that the opposition to this bill will focus on economic issues - but, as always, on distortions of economic issues. I say that because the economic facts provide some of the strongest arguments for why we need such a bill.

Let's look first at logging statistics and numbers of jobs in the timber industry. Comparing the years 1980 and 1989, the volume of logs cut on the national forests in Oregon increased by 908 million board feet, and the overall volume of logs cut (all ownerships) in the entire state increased by 1.718 billion board feet. Overall, that is a 25 percent increase, and 38 percent on the national forests.

But during that same period, jobs in lumber and wood products dropped by 2600. With 25 percent more trees cut down, we got 2600 fewer jobs. For a 38 percent increase in national forest tree cutting, we got 3.7 percent fewer jobs.

Let's look next at out overall job situation. What will we do for jobs if lumber and wood products employment is shrinking? Fortunately, that is not an issue. Oregon is creating a lot of jobs. Looking again at this period 1980-1989, total manufacturing jobs grew by 2100 - despite the loss of 2600 timber jobs. That means that non-timber manufacturing grew by 4700 jobs. The Oregon economy has already become diversified. In the same period, total employment in Oregon increased by about 162,000 jobs. Since 1984, the growth in wage and salary jobs has averaged 39,983 per year. In each of these six years, the number of new jobs created in Oregon equaled 59 percent of the total employment (66,900 in 1989) in the timber industry.

What is our overall economic situation? Oregon is growing rapidly in population, and in jobs, and boasts a very low unemployment rate. construction has boomed in the past few years. These are good times.

Is the timber industry hurting? Claims have been made that these are not good times in lumber and wood products - many tales of mill closures and other hardships have been in the press recently. And certainly, those 2600 workers discharged by (or retired from) the timber industry probably do not feel kindly about losing their jobs. But their loss had little to do with conservationists, and everything to do with exports and automation.

Random Lengths, a market reporting newsletter for the wood products industry, reports in its March 9 edition that 165 lumber/wood products plants have closed in the three Northwest states since 1980 - including 46 since the start of 1988. That sounds terrible - until you see the associated production numbers:

From 1980 to 1989, lumber production rose from 16 billion board feet to 23 billion board feet, a 43.75 percent increase. Structural panel production went from 8 billion board feet to 8.8 billion board feet, up 10 percent.

The timber industry simply made a lot more product with fewer workers and many fewer plants. Plant closures have not been related to conservationist activities causing a timber supply shortage. That is a myth.

There may be some local dislocations related to protecting ancient forests for future generations. These dislocations will come anyway as we run out of our stock of ancient forests - the only issue is the timing of the loss.

The timing of the change to second growth is a critical issue because the ancient forest is almost gone. It is, in addition, also an interesting issue because it turns out that this is the best time to quit cutting ancient forest from an economic point of view. These are good times, which are the best times for change.

Industry's shedding of 3100 jobs in 1985, for example, took place in a year in which wage and salary employment grew by 23,100. Consequently, we heard very little about it. No system of government assistance beats an opportunity for real, market-generated work if you change your job. A growing economy is a helpful cushion for the required, inevitable change to a second-growth timber supply.

The current growth of about 40,000 jobs a year, and the current large migration into Oregon, are both dependent to a large degree on the maintenance of an attractive environment. Clearly, the clean, clear, cold water, abundant wildlife, pleasing vistas, and recreational opportunities that are a part of that attractiveness depend on saving the ancient forest. The perception that we care to save our remaining ancient forests is important for folks deciding where to live, raise their children, and/or where to move their businesses.

For the sake of our economy, we need to save our remaining ancient forests.