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Josephine County economics

Josephine County economics

It’s been at least two decades since Josephine County could be described as timber dependent and over a century since hardrock mining contributed much, if anything, to the local economy.  In the wake of the Northwest Forest Plan and reduced logging on federal lands, Josephine County’s economy did not go into decline. Instead, it boomed as never before. Unemployment was at near record lows for almost two decades—until the 2008 recession. See - They’re wrong on the economy and the facts.

In 2004, Fortune magazine named Grants Pass one of 5 dream towns to retire in. The Grants Pass Courier was full reports of rising property values, new construction and designer homes. Real estate developers and the paper boosted about the “gentrification” of Grants Pass and number of custom homes for sale between a half million and $7 million.

Six years after implementation of the Northwest Forest Plan and dramatically reduced cuts in the board feet coming off the Siskiyou National Forest, Josephine County experienced its lowest unemployment in a decade and in April of that year, the lowest since 1958.

In May, the Oregonian reprinted it’s “9 states of Oregon” series. In the Southern Oregon installment they write:

Michael Burrill, once one of Southern Oregon’s biggest timber barons, expresses few regrets about closing his family-owned mill five years ago.

Instead, as the summer sun streams through the windows of his office behind a massive strip mall on the outskirts of Medford, Burrill folds his arms across his burly chest and describes how much fun he’s having in his successful move into property development.

Now he’s supplying land for the Rogue Valley’s insatiable developers — and he allows with a smile that he owns both of the local parcels identified by a governor’s task force seeking to increase the supply of “shovel-ready” industrial land.

Yet Burrill, an avid long-distance motorcyclist, says he doesn’t always see similar vigor as he tours the state’s back roads through towns with abandoned mills and little economic activity.

In some communities, he growls, “There is a major part of their population that doesn’t want to change.”

Burrill is symbolic, not only of the change sweeping across Southern Oregon, but also of the willingness of this region’s influential business community to embrace such a transformation.

Southern Oregon business leaders have shown a high degree of pragmatism, shifting their fortunes from a timber-based economy to one that is increasingly diverse.

 

But all during the decades of the housing/retirement boom, county officials and those driving local politics failed to plan for the future. It was almost like the crazed days of the gold rush. The gold ran out and the real estate bubble burst. When the mines at Waldo (the first seat of government in Josephine County) were exhausted, the miners washed away the foundations of the few remaining building to get at any remaining gold. The only thing left standing at Waldo were the grave stones.

County governments have been receiving payments from a program where the federal government shares with them a percentage of revenue received from National Forest and BLM lands. The payments had been set to expire several times but were extended each time to avert a crisis. It would have been a much less painful to address the need for fiscal responsibility and find ways to make up the lost revenues when the economy of Oregon and Josephine County was booming but there wasn’t the political will.

So now with the Secure Rural Schools Act extended for only one year, county governments are facing a funding crisis brought on, not by the Northwest Forest Plan, but by the burst in the real estate bubble and the financial crisis of the great recesssion. Rather than looking at the real economy of these counties and what cause the current crisis, state, federal and local officials are blaming the Northwest Forest Plan and looking for solutions that include partially or solely increase logging on National Forest and BLM lands.

“It’s almost impossible for these communities to not use their natural resources,” said Simon Hare, a commissioner in Josephine, a county of roughly 80,000 built during the gold rush and later sustained by logging. “It’s like telling an Iowa community they cannot grow corn or wheat or soybeans anymore.”

Counties say much of their fiscal pain can be traced to the 1994 Northwest Forest Plan, which halted rampant old-growth logging that threatened the survival of the northern spotted owl and other forest species. (Emphasis added)

From More timber, more taxes or bust for Ore. counties, Greenwire, August 20, 2012.

Commissioner Hare’s choice of metaphor may be more apt than intended. Forests are seem by many as crops, like corn and soy beans, to be artificially grown solely for the production of fiber and profit. But the “natural resources” certain factions in Josephine County believe are “theirs” are not found on privately owned, relatively flat agricultural lands like those in Iowa.

There’s thousands of acres of botanically rich serpentine terrain on the Siskiyou National Forest. These lands are “unsuitable” for timber production but they’re host to one of the highest concentrations of rare and endemic plants in North America—some found no where else in the world.  Steve Marsden Photo, Biscuit Hill, June 2012.

The forests and minerals they believe are theirs are found on some of the steepest, ruggedest, most biologically and botanically diverse, river and salmon-rich National Forest and BLM land in the nation.[1] These heritage lands belong to all Americans, to be held in trust for current and future generations and for much more than just timber production. If these public lands and their Wild and Scenic Rivers were in Iowa, they’d surely be preserved in perpetuity as a National Park.

Five Congressionally designated National Wild and Scenic Rivers and six  Forest Service Eligible Wild and Scenic Rivers flow though the Siskiyou National Forest in Josephine and Curry counties. Barbara Ullian Photo, National Wild and Scenic Illinois River.

But that aside, the county government’s financial woes are real and there’s serious poverty in the area. To find solutions, rather than look to the past, with expectations of an unending mythical supply of timber and wildly exaggerated mineral wealth,  let’s look at the real socioeconomics and ecology of the region. For example, this graph shows that the current high unemployment is tied to the overall financial crisis and the recession of 2008, not to the reduction in timber harvest on federal lands.[2]

Even during the years when logging on federal lands was at its lowest, unemployment in Josephine County remained low until the 2008 recession hit. Headwaters Economics.

Headwaters Economics provides us with tools to examine the local economy and demographics. Below are a few facts from the profile they ran for Josephine County. You can download the full socioeconomic report here (451 kbs).

  • From 1970 to 2010, personal income in Josephine County grew by 256% compared to 201% for Oregon as a whole.
  • From 1970 to 2010, population in Josephine County grew by 128% compared to 83% for State of Oregon.
  • From 1970 to 2010, personal income in Josephine County grew by 256% compared to 201% for Oregon.
  • From 1970 to 2010, labor income grew from $460.7 million to $1,102.1 million (in real terms), a 139% increase.
  • From 1970 to 2010, non-labor income grew from $248.5 million to $1,425.7 million (in real terms), a 474% increase.[3]
  • In 1970, non-labor income represented 35% of total personal income. By 2010 non-labor income represented 56% of total personal income.
  • Between 1990 and 2011 unemployment remained relatively low until the 2008 recession (see graph above).[4]
  • From 2001 to 2010, the three industry sectors that added the most new jobs were health care/social assistance (1,590 new jobs), finance, insurance (531 new jobs), and real estate, rental, leasing (412 new jobs).
  • In 2010 the three industry sectors with the largest number of jobs were health care/social assistance (5,537 jobs), retail trade (5,145 jobs), and manufact. (incl. forest products) (3,767 jobs).
Protecting the exceptional place where we live and developing a sustainable future should not just be based on economics and jobs. However, a better understanding of the local economy and the past will help us work toward these goals.

Non-labor personal income in Josephine County.
Other references
 Anyone can run socioeconomic profiles and other reports for specific geographic areas for free at Headwaters Economics Analysis Tools. You can also find other tools and reports at their website including:
 Read about the proposed O&C Trust, Conservation and Jobs Act at KSWild.org
Notes
[1] According to Wikipedia 39% of Josephine County’s 1,642 square miles is National Forest land and 28% is BLM land.The National Forest lands in Josephine and Curry counties (the Siskiyou National Forest of the Rogue River-Siskiyou National Forest) include some of the most valuable salmon and steelhead habitat in the United States. Five National Wild and Scenic Rivers and 6 Eligible Wild and Scenic Rivers flow through the 1 million acre National Forest, which is also the most botanically diverse Forest in the nation.

[2] Timber production on National Forest and BLM lands in the Pacific Northwest slowed dramatically at the beginning of the 1990′s due to the spotted owl lawsuits. Many timber sales were enjoined because they were in old-growth forest habitat. The Northwest Forest Plan was developed under the Clinton Administration to lift the injunctions and comply with the laws the previous administrations had broken. It was designed to provide for timber harvest on some lands and to protect the habitat of the owl and other old-growth related species—including salmon, steelhead, cutthroat trout and other aquatic species— on others. The plan was implemented in 1994. The low unemployment numbers from 1990 and 2007 are one economic indicator that Josephine County’s economy boomed during this period despite the Northwest Forest Plan and the reduction in federal land logging.

[3] Non-Labor Income is defined as: Dividends, interest, and rent (money earned from investments), and transfer payments (includes government retirement and disability insurance benefits, medical payments such as mainly Medicare and Medicaid, income maintenance benefits, unemployment insurance benefits, etc.) make up non-labor income.

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