Newcomers allow towns to wean economies from logging and mining

Here at the Center for the Rocky Mountain West, we’ve been closely monitoring economic conditions in areas closest to public tracts of Western forests.

By Larry Swanson
for Headwaters News

We’ve found that across the region, rural communities are no longer isolated places with slow-growing populations whose fate is tied to the rise and fall of extractive industries.

In fact, most are fast-changing and, for the most part, growing places whose future vitality increasingly hinges on protection of the qualities that make these places desirable places to live.

The big picture

The largest landowner in the United States is the American people through their national government.

Within the 48 contiguous states, these public lands total around 810,000 square miles, more than 90 percent of which, about 740,000 square miles, are in the 22 contiguous states west of the Mississippi River.

Included are 280,000 square miles of public forest administered by the U.S. Forest Service (see federal lands map).

Much of these Western forests extend in a long belt from the Cascades of Washington south to and along the Sierra Nevada range of California. Another belt extends along the Rocky Mountains from Idaho and
western Montana south through Utah and Colorado into the Southwest.

Tensions in forest lands management

Considerable attention has always been focused on how these Western forest lands should be managed. A central tenet in this discourse has been the widespread belief in a fundamental "economic
imperative" that emphasized economic needs of communities, particularly small, resource-dependent communities.

Other values people associate with forests — as habitat for wildlife, viewscapes and scenery, generators of streamflow and protectors of water quality and sources of recreation — were secondary priorities.

The new-found growth now occurring in these areas is providing a bridge to the future …

For many years, this economic imperative required public forests to be actively used, tapped for their mineral resources and wood material, and tapped at levels that sustained these economic activities.

Long-standing tensions in forest management have largely been borne of extreme differences of opinion, scientific and otherwise, about what these levels of extractive use can be if other forest values and
forest ecosystems are to be sustained.

Economic trends near public forest lands

Using GIS software, we’ve isolated 409 counties in the West whose geographic center lies within 30 miles of these public forest lands (see Forest Lands map).

Thirty-seven of these counties contain incorporated cities greater than 50,000, and another 121 are near large metropolitan centers.

The remaining 251 counties are largely non-metro or rural in character, having no cities greater than 50,000 and at locations removed from large metro centers.

Some of these non-metro counties, while not having large cities, do have cities that serve as regional centers: places such as Medford, Grand Junction, Flagstaff, Idaho Falls, Pocatello, Eureka, Bend, and
Missoula.

There are 29 of these "regional center" counties among the 251 non-metro forest land counties. Another 109 counties, while not containing regional centers, are located next to these counties.

The remaining 113 counties from the group are largely "isolated rural counties."

The 251 forest land counties were evaluated for their economic dependence on the wood-products industry. Counties considered heavily dependent are those where the industry accounted for more than 10
percent of all labor income generated by all employment during a three-year period from 1976 to 1978, a time when the "cut" coming from these forest lands was relatively high and before the dramatic
declines in the industry over the past two decades.

Of the 251 non-metro counties near these forests, only 43 were found to have been "heavily dependent" on this industry in the late 1970s.

Somewhat surprisingly, only nine of the 113 isolated rural counties were wood-products dependent in the late 1970s, contrary to the widespread myth that most rural communities near these lands are or were
timber-dependent.

Over the past 20 years, labor earnings by those employed in wood-products manufacturing of all types in these 43 counties fell from $3.1 billion in 1978 to less than $1.8 billion in 1991.

This is a decline of more than $1.3 billion or a loss of 42 percent of the industry. From 1991 to 1998, industry earnings declined by another $235 million.

With these declines, the wood-product industry’s share of total labor earnings in these counties fell from 22 percent in 1978 to less than 9 percent.

And among the entire 251 non-metro counties near these lands, the industry’s share of total labor earnings fell from 7.5 percent to 3.2 percent during the period.

Repercussions

While declines of this magnitude in a primary industry would ordinarily portend massive erosion of the area economy, this hasn’t happened; at least, not in the past decade.

Population growth more than doubled in the 43 wood-products dependent counties in the past decade. Overall employment increased by a total of nearly 145,000 jobs between 1990 and 1998, with total
employment increasing by about 20 percent.

And while the largest manufacturing sector in these areas saw massive declines, total manufacturing employment in the counties in 1998 totaled nearly 90,000 jobs, compared with just under 92,000 in 1980.

Construction activity, far from collapsing in the midst of these wood-products industry declines, increased by 30 percent during the 1990s, rising by more than $305 million in inflation-adjusted dollars.

In the other 208 non-metro counties not heavily dependent on wood-products manufacturing, construction labor earnings rose by more than 44 percent.

These dramatic increases in overall employment and construction activity are pushing area economies, even as their long-standing extractive industries continue to decline, as evidenced by high growth in
health care, local government, financial services, business services, wholesale trade and many other sectors central to growing economies.

Income from "non-labor" sources, such as investment income and transfer payments, also is growing more rapidly than from labor sources in these areas.

For all counties near forest lands, per capita income gains between 1990 and 1998 averaged 12.6 percent for the 29 "regional center" counties, 13.2 percent for the 109 counties near these centers, and 15.7
percent for the 113 isolated rural counties.

These gains compare with 12.6 percent for the entire 22-state West and 12.9 percent nationwide.

Sea change

While many Western politicians argue that lower levels of logging and mining are destroying local economies, rumors of the economic death of these communities is largely premature.

The main reason for this is a "sea change" in migration patterns in the West.

During the 1980s, much of the population growth in the West was in and around the largest cities.

However, during the ’90s, much of the growth shifted to smaller cities and non-metropolitan areas.

Much of this shift is associated with an older and more mobile population, with more mobile sources of income and greater flexibility in locations of employment.

More and more people are finding it easier to move to where they want to live. Migrants flee some areas – those with high crime, too much traffic, high living costs, poor amenities – and gravitate to other
areas, largely places perceived to be nice places to live.

This new-found freedom has meant a lot more people living near public forests. The 29 regional center counties, which had net migration of only 7,600 during the ’80s, have had a net influx of 180,000
people during the ’90s.

And this considers only those who actually changed their permanent address. It does not include the large numbers gravitating to these areas as part-time residents (see population change table).

The 109 forest land counties near these regional centers experienced net migration of nearly 186,000 people, up from only 4,900 during the ’80s.

And the 113 isolated rural counties, which lost nearly 32,000 people through net out-migration in the ’80s, gained nearly 116,000 people through net in-migration in the last decade.

For the entire group of 251 forestland counties, more than 481,000 more people moved to these areas in the ’90s than moved away.

And this massive reversal in migration is pushing economic growth and restructuring, even as traditional industries continue their consolidation and slow decline.

The future

A 1999 study by the USDA’s Economic Research Service found that "population change in rural counties since 1970 has been strongly related to their attractiveness as places to live."

The study further found that "employment change in rural counties over the past 25 years has been highly related to natural amenities. Counties low on the [amenities] scale had relatively little growth, while
high-scoring counties had an average of three times as many new jobs in 1996 as in 1969." (Economic Report No. 781).

The question becomes: "What does this mean for public forest management in the future?"

The biggest mistake decision-makers can make is to deny this economic transition is taking place.

This is essentially what was done in a recent assessment done for policy-makers in Montana, Idaho, Washington, and Oregon ("Columbia Basin Socio-Economic Assessment," Barney & Worth/E.D. Hovee, June
1999).

In time-honored fashion, the study surmised that rural communities in the Columbia Basin "are falling further behind their urban counterparts" and attributed the "Columbia Basin’s decline in the 1990s … to
federal policies: on timber harvest, grazing allotments, endangered species, environmental regulations, etc." (p. 1).

The assessment, funded by the U.S. Economic Development Administration, is meant to provide a basis for a "collaborative effort to design a comprehensive Economic Adjustment Strategy for the entire
Columbia Basin."

We can’t afford to plan for economic development by viewing the future through the rearview mirror.

The new-found growth now occurring in these areas is providing a bridge to the future, providing employment and growing sources of income as their economies change and restructure.

Population growth offers both an opportunity and a challenge. The opportunity lies in the potential to redefine area economies and to better position communities for the future.

Without this recent surge in population growth, this restructuring would be much more difficult.

The challenge lies in properly planning for and managing this growth as it occurs. Without adequate planning, rapid growth may degrade the very amenities that make these communities attractive places to
live, jeopardizing their economic growth and vitality.

As the economies of these areas fundamentally change, so too, does the role played by public forests.

They are not becoming less important as economic assets to these communities; they are in all likelihood becoming more important because of the high values an increasing number of people attach to their
amenities.

In the old economy, the economic imperative led many forest managers to err on the side of extractive industries. But in the new economy, there is a new imperative, one that many in the West resist. And it is
this:

The economic futures of these communities will increasingly hinge on how carefully these forest lands are managed for the values they impart to nearby communities — values that make these communities
attractive and vital places to live for more and more people.

(Editors note: The maps to which this story links are large files and will open in a separate browser window. Close or minimize that window to return here.)

Larry Swanson is an economist and associate director of the O’Connor Center for the Rocky Mountain West of The University of Montana.

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