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They’re wrong on the economy and the facts

They’re wrong on the economy and the facts

Southern Oregon Resources Alliance is wrong on what caused the downturn in the economy of Southern Oregon and who to blame. In their anti-Wilderness video, they claim:

Ever since the Northwest Forest Plan decimated our timber industry, we’ve had chronically high rates of poverty and unemployment.

But it was not the Northwest Forest Plan or the resulting (and needed) reduction in federal land logging that tanked the economy. The plan was implemented in 1994. The record shows that rather than impoverishment, the economy of Southern Oregon was booming, retirees were streaming into the area and unemployment was at record lows—until the housing bubble burst and banking deregulation and Wall Street greed took down much of the global economy. In the year 2000, Josephine County experienced its lowest unemployment in a decade and in April of that year, the lowest since 1958.

Following that and until 2008, unemployment rates were relatively low and the economy supercharged.  The graph below lays out exactly when unemployment in Josephine County went through the roof.

Yes, things are bad now, but after more than a decade of growth, prosperity and record low unemployment, you can’t blame it on the Northwest Forest Plan or reduced cut levels from federal forests.

The area’s timber industry jobs were in decline long before the Northwest Forest Plan:

The decline of the region’s timber industry can be explained in part by the overcutting of the suitable timber base, leading to the closure of area mills. This is not so much a supply issue as a function of unsustainable harvest practices combined with a mismatch between a sustainable timber supply and overbuilt mill capacity.

More significant is the role of timber demand and price, which fluctuate with business cycles and new housing starts. The most recent recession, which was characterized by a severe downturn of the housing market and fall off in demand for lumber, made this point amply clear. Finally, the timber industry has pursued a long-term strategy of increasing productivity through capital intensive investments in machinery. As a result, the same output requires fewer and fewer workers over time.

For example, while the region lost 5,726 timber jobs from 1998 to 2007, it added 45,555 new non-timber jobs over the same period. In other words, the broader economy and its ability to grow has decoupled from timber. In fact, the region’s economy can now accurately be described as a services economy (66% of all jobs in 2008), especially if one considers government (15% of all jobs in 2008) a service provider. Together, services and government account for 81% of the all jobs in the region.

In the Siskiyou region, from 1970 to 2008:

  • Population grew by 69% compared to 49% for the U.S.
  • Employment grew by 127% compared to 97% for the U.S.
  • Personal income grew by 166% compared to 165% for the U.S.

The above is excerpted from a 2010 Headwaters Economics Report for the Siskiyou Region. Read the full report at Headwaters Economics. See also Headwaters Economics interactive map for National Forest Timber Sales and Timber Cuts, 1980-2010.

Some timber companies closed their mills to take advantage of the booming real estate economy.  The Oregonian just republished a series of articles from 2003 called “The Nine States of Oregon”. Read Southern Oregon—growing its own way. The Southern Oregon story includes an interview with Michael Burrill, who discusses closing the family mill in 1998 to embrace the new economy.

Part of that new economy is retirement based. In 2004, Fortune Magazine listed Grants Pass as one of five dream towns to retire in.

There was poverty in the area then also, but overall, there was a lot of wealth. For example, a 15,000 square foot Grants Pass area home, listed for $6.5 million, was featured on MTV in 2010 as a “Teen Crib.” The home was built as a tribute to the family’s logging heritage (See Grants Pass Courier, May 12, 2010).

 

We don’t have specific numbers for Josephine County, but Headwaters Economics writes this about personal income in the Siskiyou Region:

From 1970 to 2008, labor earnings in the region grew by 94%. Over the same period, non-labor income grew by 360%, or almost four times as fast as labor earnings.

Taken as a whole, non-labor income is the fastest growing and largest source of personal income in the Siskiyou region.

In 2008, non-labor income amounted to $16 billion in the region, or 47% of total personal income. Transfer payments account for 27% and dividends, interest, and rent 22% of all non-labor income in this year.

The numbers for non-labor income maybe lower in 2012, but that can’t be blamed on the Northwest Forest Plan or a perceived timber sale gridlock. It’s because of the reckless risk taking of the financial services industry and the global economic downturn it caused.

So if Southern Oregon Resource Alliance got it this wrong about the economy of the area, maybe their solution—exploitation of public resources for private profits and socialization of the costs—is wrong too? If people are coming to the area to retire, they’re not doing it to live next to a nickel strip mine or to have the O&C parcel next door or upstream sprayed with herbicides and managed as an industrial tree farm. To solve the problems of today we need new thinking and good information.

Click here for a list of major employers in Josephine County in 2008.

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