D. Dowd Muska

 

A Clear-Cut Prospect for Economic Growth

February 06, 2014

It’s probably news to a Burlington barista or Rutland reflexologist, but more than 5,000 Green Mountain State residents earn their livelihoods from the murder of trees.

That’s the finding of “The Economic Importance of Vermont’s Forest-Based Economy.” Published by the North East State Foresters Association (and “funded by the U.S. Endowment for Forestry and Communities through the Northern Forest Center and the Vermont Department of Forests, Parks and Recreation, with assistance from the Vermont Agency of Commerce, Vermont Woodlands Association, Vermont Wood Manufacturers Association, The New England Society of American Foresters, and the Plum Creek Foundation”), the report puts the annual payroll for direct timber workers at $34 million. The comparable figure for employment in primary and secondary wood manufacturing is $116 million.

When businesses that harvest and process trees can’t be exterminated in the state with the most hippies per square mile, it’s worth taking notice.

Notwithstanding the wailing of populists -- vote-begging pols and talk-radio gabbers on the right, union activists and industrial-policy wonks on the left -- America stubbornly continues to “make things.” Mining is thriving, due in part to Federal Reserve-hating gold hoarders and ravenous demand abroad. The real energy sector -- hydrocarbons, not solar panels, wind turbines, and fuel cells -- is undergoing a renaissance that conventional “wisdom” did not anticipate. (Exports of natural gas and oil are not far off.) Factories have experienced remarkable job growth -- 568,000 new positions in the last four years, with hundreds of thousands more vacant for want of skilled labor. And although it doesn’t draw much media coverage, the wood industry is on the upswing.

In the 1950s, the U.S. employed over 100,000 lumberjacks. Jobs dipped, as labor productivity soared, the postwar housing boom faded, wood alternatives stole market share, and “environmental” activism intensified. When the Great Recession arrived, America had 59,200 loggers. Employment hit bottom at 47,400, in October 2011, but nearly 5,000 jobs have returned.

The story’s the same for forest-products manufacturing. It was brutalized by the twin blows of the housing bust and Bush-Obama economic apocalypse. Between 2005 and 2009, lumber output declined by 42 percent. Many sawmills closed, and others operated at greatly reduced capacities. More than 240,000 jobs vanished between 2006 and 2011. Happily, around 20,000 have come back.

A falling birthrate and economic malaise likely ensure that domestic wood demand will not regain its peak. But globalization supplies salvation. The U.S. Forest Service recently reported that compared to 2012, during the first three quarters of 2013, the value of lumber exports increased by over 14 percent, while the value of log exports rose by more than 28 percent. Shipments to China are driving growth, with sales surging from next to nothing a decade ago to over $2 billion in 2013. Wood pellets offer a fresh export opportunity. Gulf Coast Renewable Energy is building two facilities in Mississippi with a combined capacity of 640,000 tonnes per year. A competitor, Green Circle Bio Energy, is augmenting its Florida plant with one in the Magnolia State. (Europeans, deeply mired in the thrall of climate-change hysteria, mix the pellets with coal to reduce the continent’s “carbon footprint.”)

What’s needed for wood’s rebound to last? Workforce issues are paramount. The North East State Foresters Association warns that the industry it represents is “old and getting older.” According to the Arkansas Forest Resources Center’s Matthew Pelkki, the average age of a logger in his state is 55. With pols and educrats peddling the expensive and dunderheaded notion that everyone should go to college, young adults with no appetite for book learnin’ need to consider the wonderful world of wood.

Energy poses another obstacle. Cheap natural gas is welcome, and evidently here to stay, but chopping, transporting, and processing trees consumes quite a lot of gasoline, diesel, and electricity. Tax hikes, unnecessary air-quality regulations, and mandates for “green” power all threaten to drive up energy costs.

Finally, too much of the Republic’s forestland is under Washington’s thumb. Almost 70 percent of the West’s timber is controlled by government agencies -- with the Forest Service as top boss. Allocative efficiency is impossible when politicians and bureaucrats, rather than producers and consumers, make decisions. The federal government needs to exit the land business, pronto. Market-driven tree harvesting -- accountable to shareholders, customers, and science-based environmental protections -- would create more jobs and wealth than the current system of “public” management.

Four centuries after civilization came to the New World, we’re still cutting trees and putting them to use. There’s no reason to stop.

D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.

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