7/19/99

KUFM / KGPR

T. M. Power

 

Remembering the Timber Panic of the Early 1990s

 

            As the 1990s draw to a close, it is worth recalling some of the economic panic that characterized the first part of this decade in Western Montana and much of the Pacific Northwest.  It was in May of 1991 that federal district judge William Dwyer issued his spotted owl decision, a ruling that banned all new timber sales on 24 million acres of federal land in Oregon, Washington, and Northern California.  This was the timber basket of the Pacific Northwest and the ban led the harvest off of federal lands in the Cascade region to fall by 86 percent compared to the 1988 peak harvest.

            Western Montana, of course, was not directly affected by the spotted owl ruling.  But other environmental constraints, especially water quality concerns, limited federal logging activities in Montana.  By 1996, the cut off of federal lands in Western Montana had fallen to only about a quarter of what it had been in the late 1980s.

            The loss of most of the federal timber supply in regions that had long been considered “timber dependent” led to very dire economic predictions.  The federal government, we were told, was creating a “new Appalachia” of concentrated and enduring poverty.  In the Pacific Northwest, timber interests predicted that over a hundred thousand jobs would be lost in small towns and rural areas where the wood products industry was concentrated.  In Western Montana it was predicted that more than ten thousand jobs would be lost.  The federal government, we were told, was “taking our villages.”

            With the distance that time has provided, we can look back and evaluate what actually happened.  Did the sky fall?  Did our economies collapse as a result of these reductions in federal timber supply? 

            By many measures of economic vitality, quite the opposite happened.  Oregon and Washington, for most of the 1990s, considerably outpaced the nation in terms of job, population, and total income growth.  Western Montana counties also gained population at a rate well above the national average.  During the first half of the 90s, there was substantial net inmigration as people, voting with their feet, judged Western Montana to be a superior place to pursue their and their families’ wellbeing.  In a belt stretching south through Western Montana from the Canadian border to the Wyoming and Idaho borders are found the fastest growing counties in the state:  Flathead, Lake, Missoula, and Ravalli.  All lost mills during the 90s and saw federal timber supplies plummet.  The same was true in the Bozeman area where the economy also expanded rapidly. Even Lincoln County, Montana’s timber basket, in extreme northwest Montana, gained 1,300 new residents during the 1990s.  While real earnings in wood products declined 13 percent in Western Montana, total income expanded 31 percent as employment grew by 33 percent.  Population expanded by 16 percent.  Our communities wrestled with the problems associated with digesting this rapid growth rather than coping with the predicted economic depression.

            The doom-sayers, however, can turn away from these signs of maybe a little too much economic vitality, and point to low pay and income levels.  If the economic data is phrased carefully, one can show that Montana lies at the bottom of the economic barrel.  That, arguably, could be said to represent our descent into Appalachian status.  If, for instance, instead of focusing on pay per hour or pay per worker, one focuses on pay per job, Montana is among the lowest states in the nation and there has been some ongoing decline in the 1990s.  If, instead, one focuses on pay per hour or pay per worker or average income, one sees real ongoing improvement during the 1990s and a much more modest gap relative to the rest of the nation.  If, further, we compare ourselves not to Los Angeles, New York-New Jersey, Chicago, etc. but to the other small cities of the nation, we are not doing badly at all. 

That shouldn’t be surprising.  After all, those new inmigrants moved here after Montana’s economic statistics had deteriorated and in spite of the bleak picture some would paint of economic life here.  Those inmigrants, many of whom previously had lived in Montana and had spent years exploring the possibilities in other parts of the nation, could have gone elsewhere.  In making their hardnosed comparisons, the potentials associated with life in Montana appeared superior, not inferior.  The fact that most of the rest of us did not leave, indicates that we have made similar judgements.

            Finally, the declines in these economic statistics relative to national averages took place during the 1980s when harvests from federal lands and total timber harvest was building to an all time peak level.  Clearly high levels of timber harvests in the second half of the 1980s did not lead to rapidly improving pay and incomes.  It is a little far fetched after federal timber harvests have declined to point to low pay that became a reality during a period when federal timber harvests were rapidly rising to peak levels.  At least a little causal consistency would be nice in these public discussions.

            Next time a particular special interest group is predicting economic collapse if it does not get its way in public policy, just remember all of the past industry predictions that the economic sky was going to fall.  When they offer us economic hard hats in the form of bad public policy, just smile and confidently decline the offer.