Thinking about the Libby and Lincoln County Economies

The announcement of the closure of the Stinson plywood mill in Libby and the loss of its 300 jobs represents yet another shock to the economies of that beleaguered town and Lincoln County. The city was already wrestling with the impacts of widespread asbestos pollution and the consequent slow but lethal poisoning of many of its citizens. In addition, over the last decade and a half, the city and county have seen two mines and another mill close. In over a thousand relatively high-paid blue-collar jobs have been lost. It is no wonder that Libby and Lincoln County feel battered and threatened.

In the past most of this economic pain has been blamed on environmentalists and the federal government. Libby and Lincoln County have been hotbeds for the anti-government, anti-environmental movement. With the latest mill closure the explanations were a little more honest. The primary blame was put on extremely low plywood prices nationwide, partly tied to imported plywood from Scandinavia and other nations. Since Stinson had not been trying to buy logs from the Kootenai National Forest and the flow of logs from the fires of 2000 is beginning to flood the market, not much was said about harvests from the National Forests except for a gratuitous jab or two at the environmental appeal process. For a change the finger pointing was accurate: It was national and global economic forces that were shutting down the mill.

But Libby’s and Lincoln County’s economic travails have never been primarily tied to environmental constraints on its natural resource industries. It was not environmentalists who poisoned Libby and its population with asbestos. It was the mining company, W. R. Grace. It was not overly stringent environmental regulations that allowed that asbestos poisoning to continue over the years, but the very opposite: a mining company’s cover-up and the lax enforcement of environmental standards by the state and federal government.

But one can go back further. Libby and Lincoln County have had double-digit unemployment rates for almost three decades, since the early 1970s. That was despite the gargantuan federal Libby Dam project, the harvesting of huge amounts of timber from the Kootenai National Forest, and the operation of two mines. Environmentalists were not able to block any of this. Yet this bonanza of high paid jobs did not solve the region’s economic problems either.

In fact, the high unemployment rates can be traced back to the building of the Libby Dam. Thousands of workers poured into the Libby area and when construction of the dam drew to a close in the early 1970s, many of them decided to stay and enjoy the natural amenities that Lincoln County had to offer despite the limited employment opportunities. High unemployment was there to stay.

High levels of timber harvest did not solve the problem. Between 40 and 50 percent of Montana’s National Forest timber harvest came from the Kootenai National Forest, partly because environmental objections were so ineffective up there. That federal harvest did not peak until 1987-1988. At that time the Asarco and Grace mines were also operating full bore. Yet the unemployment rate still stood at close to 12 percent. In the late 1990s, after the mines had shutdown, a mill had closed, and National Forest timber harvests were only about a quarter of what they had been in the late 1980s, the unemployment rate had actually declined slightly.

It was not just unemployment rates that moved in ways that did not appear to match changes in the historical economic base. In the decade when the Asarco mine opened and federal timber harvests were reaching their peak, average pay per job fell by almost $8,000 per year in real terms. The following decade, as the mines and mill closed and federal timber harvest plummeted, average pay declined by another $3,000, not good, but a superior performance compared to the previous decade of natural resource expansion.

During the 1990s, as the natural resource industries contracted, the population grew by 1,300, new housing starts continued at a brisk pace, and property values grew. Total jobs actually expanded relative to the levels in the late 1980s although most of that employment growth was among the self-employed.

This is not to suggest that things are hunky-dory in Lincoln County. They obviously are not. The loss of close to 1,300 well-paid blue-collar jobs over the last decade or so has damaged individuals, families, and communities. The lingering effects of the asbestos poisoning add to the tragedy.

The point of recalling this history and its complex economic aftermath is simply to remind us that the economies of Libby and Lincoln County are much more complex and resilient than is usually suggested when that region is described solely in natural resource extraction terms. Libby and Lincoln County are not about to be abandoned because of these economic reverses. Most of their primary assets remain: A hard-working and disciplined workforce, a growing contingent of entrepreneurs committed to making a living there, a sense of community and place associated with their relative isolation, and a spectacular natural setting that will continue to hold and draw people and economic activity. As the Flathead Valley and Sandpoint areas become increasingly congested and suburbanized, Lincoln County, for better or worse, is going to look like an increasingly attractive alternative, representing what the Flathead and Sandpoint areas used to have. In addition, and somewhat ironically, the pursuit of environmental quality is about to become Libby’s primary industry as the asbestos cleanup moves into full swing.

Libby and Lincoln County are about to discover how just important high quality living environments can be to their local economic vitality and well being.