9/10/2001
KUFM / KGPR
T. M. Power
Are the National
Forests the Cause of the Declines in Forest Products Employment in Montana? A
Comparison of Maine and Montana
In the exaggerated partisan political attacks that pass for public policy dialogue in Montana, it is often asserted that the reason employment in forest products is in decline and many small mills have closed is that much of our timber land is owned by the federal government. The paranoid story line here is that “radical environmentalists” who care more for wild critters than they do for their fellow human beings, in league with weak willed and permissive liberals, have managed to “lock up” most of the timber in our National Forests, shutting off what once was the dominant source of wood fiber for our mills. Without access to the necessary raw materials, the mills have had to shut down, laying off workers in one of our high paid industries.
Because timber harvests from the National Forests in Montana have declined dramatically since the historic peak harvest year of 1988, there is some plausibility in this tale. One quick test of the argument that it is the failure of the National Forests to sell trees that have cause the declines in forest products is to look at areas where the forest products industry is also important but does not rely on National Forests for its timber supply.
Maine fits that description. Maine is the most forested state in the nation, but there is almost no National Forest land in the state. Only a tiny corner of the White Mountain National Forest juts into the state. Almost all of the Maine’s forests are in private ownership; much of it in owned in very large blocks by multinational corporations, and managed for commercial timber purposes.[1]
Clearly in this setting it is private corporations that make the decisions about the level of timber harvest, the number of forest products jobs, and when mills operate or shut down. It is not federal timber managers who are calling the shots.
So how has employment in Maine’s forest products industry held up in this almost completely private and commercial regime? Not very well! Between 1989 and 1998 about 5,000 forest products jobs were lost in Maine. In Montana during the same period, the job loss was only a third of that, 1,600. The primary reason for the smaller job loss is that Montana’s forest products industry is substantially smaller, only a third the size of Maine’s. In percentage terms, Maine lost about 16 percent of its forest products jobs while Montana lost 14 percent. But the loss to the overall Maine economy was more substantial because the Maine economy is not that much bigger than Montana’s even though its forest products industry is three times as large. “More of the same” is rarely a good economic development strategy. It simply sets up a region for instability and decline.
Obviously the forest products job losses in Maine were not due to the federal government failing to sell enough trees. In fact, the job losses had nothing at all to do with inadequate timber supply. While forest products jobs were tumbling in Maine, timber harvest was increasing by thirty percent! That is, the very solution to forest products job loss that is preached in Montana, namely increased harvest, actually took place in Maine, yet they lost forest products jobs at three times the rate in Montana. Clearly cutting more trees does not necessarily protect forest products jobs.
What then explains the decline in employment in forest products employment in Maine if it was not the National Forests failing to sell trees or declining timber supply? The answer is the same as in all mature natural resource industries. The decline in the number of farmers and ranchers or the number of miners or metal smelters is not due to inadequate supplies of agricultural land or inadequate supplies of minerals or smelting capacity. In almost no other industry do we blame reduced employment on inadequate supplies of raw materials. Only in the timber industry do we hear that non-economic whining. In all other sectors of the economy, we admit that it is usually either weak demand for the product and or labor displacing technological change that leads to layoffs.
That was what was going on in Maine. It was not a new phenomenon. For almost a half-century, technological change has been reducing the number of jobs associated with each million board feet of timber harvested by about 30 percent. Every twenty years, the jobs generated per unit harvested have been cut in half. Maine’s forest products jobs were partially protected by steady increases in harvests for most of that period. But over-cutting has now reached a point where that offset to labor saving technology can no longer operate. Forest products is projected to continue to lose thousands of jobs in the coming years primarily to technological change. In addition, the weak market conditions of recent years have also led to job loss and mill closures, just as in Montana.
Montana is lucky to have a handy whipping boy, the federal government and the U. S. Forest Service, on which to take out its economic anxiety. Think of the frustration of Maine residents who have to face up to the fact that they have hitched too much of their economic wagon to an increasingly weak industrial horse. Unlike Montanans, they have to face economic reality squarely and plan a diversification strategy. In Montana we are lucky enough to be able to continue to delude ourselves and hide from economic reality. Along with our governor and her natural resource industry cronies, we can continue to blame all of our economic woes on the federal government and environmentalists and not bother to make any difficult or, even, thoughtful decisions. Our anti-government ideology is really a dangerous, addictive drug that distracts us from reality and renders our public policies ineffective or counter-productive. We have turned ourselves into junkies, stumbling around helplessly, flailing dramatically but ineffectually at economic reality.
[1] The exception is Baxter State Park that was created by private purchase of previously logged land in north central Maine by an ex-governor and donated to the state. There is also the Allagash Wilderness Waterway that provides a narrow protected corridor along a series of lakes and rivers. Finally there is Acadia National Park along the Maine coast.