Download 1 May 2, 2005 KUFM / KGPR T. M. Power A 10th Anniversary

May 2, 2005
KUFM / KGPR
T. M. Power
A 10th Anniversary Review of the Northern Spotted Owl and Timber Jobs Issue
Ten years ago a federal judge approved the Northwest Forest Plan, a Clinton
Administration initiative to minimize the impact of protecting the Northern Spotted Owl
on timber communities in the Pacific Northwest. As required by that Plan, the US
Forest Service and Bureau of Land Management were to provide ongoing monitoring of
both the biological and the socioeconomic impacts. Those agencies recently released a
massive review of the accomplishments and failures of the first ten years of the
Northwest Forest Plan.
One of the major questions this ten-year review aimed at answering was
whether that Forest Plan succeeded in stabilizing the flow of timber from federal lands
to forest-dependent communities and, if not, what the impact was on timber jobs and
forest-dependent communities. The answer to this question at first appears
contradictory: Timber flows from federal forests to adjacent communities were not
stabilized; they continued to decline, but the impact on timber jobs was very small.
The reason that declining federal timber harvests did not have a significant
impact on timber industry jobs after 1994 was that as federal timber harvests declined,
harvests from non-federal sources increased. More important quantitatively, the export
of unprocessed logs declined and the import of logs increased. As a result, the effective
supply of logs to Pacific Northwest mills actually increased despite the decline in access
to federal logs.
This was not a random coincidence. Normal market forces were at work. As
the federal timber supply declined, the value of raw logs rose sharply. That provided an
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incentive for other timber owners to harvest their trees. It also made the Pacific
Northwest a more attractive place to sell logs. Logs headed for export were diverted to
local mills and logs from outside the region and country were drawn in by the higher
prices. As a result, there was an increase in the logs available for processing in Pacific
Northwest mills despite the decline in federal supply.
Despite this increase in the effective supply of wood fiber, an additional 11,000
forest products jobs were lost between 1994 and 2000. A small number of those jobs,
400 or less than 4 percent, were associated with the decline in local harvest that was
offset by imported logs. The rest of the job loss could not be blamed on an inadequate
supply of logs given that the supply had actually increased.
The source of the job losses was the ongoing restructuring of the forest products
industry in which large international companies built ever larger mills, achieve
economies of scale, drew on their own timber supply, and out-competed smaller, older
mills that were more dependent on federal timber. In addition, but related to this, is the
ongoing adoption of labor-displacing technologies that steadily reduce the workforce
needed for any given level of harvest and processing. Nationwide and international
competition was forcing forest product firms to adopt these technologies to survive. It is
an economic process that has been reducing employment in wood products for threequarters of a century.
This massive loss of wood products jobs despite an expanded supply of timber
is not new. Between 1978 and 1989, when timber harvests rose by almost one billion
board feet, Oregon and Washington lost 28,000 wood products jobs.
Between 1990 and 1994 when federal harvests in Washington and Oregon
declined by 2.5 billion board feet and non-federal harvests also decline by 1.5 billion
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board feet, 19,000 jobs were lost. The fact that non-federal harvests also declined,
suggests that much of the job loss was associated with the recession of the early 1990s
and the fact that the peak harvest levels in 1988-1989 were not sustainable on either
federal or other lands.
The point is that timber jobs have been in serious decline for over 25 years in
the Pacific Northwest. They decline when timber harvests expand. They decline when
timber harvest contract. Clearly it is not just the supply of logs that determines the level
of employment in wood products. Supply matters, but so does demand. National and
international competition also matter as does technological change.
That is what makes naive the Northwest Forest Plan’s belief that if the flow of
logs to communities were stabilized, wood products employment in those communities
could be stabilized too. The timber industry continues to make such assertions as it
seeks to regain control of our public forestlands. These assertions that raw material
supply drives employment are presented as fundamental economic principles when
they are nothing of the sort. Boosting raw material supply is not a reliable way of
boosting employment: Consider our agricultural sectors. We have continuously boosted
production and productivity while the number of farms steadily shrinks. In mining we
have boosted production while employment has plummeted. The same has been going
on in wood products for a very long period of time.
Economics has always insisted that it is the interaction of supply and demand
that matters and that technological change is one of the most powerful forces driving the
economy. Trying to push the local economy by expanding the clearcutting of our public
lands is like trying to push something with a wet noodle. It ain’t gonna to work.
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