Jobs and tech change

Continued from previous page

THE IMPACTS OF LAND-USE DECISIONS

Since the early eighties, technological change
has been much less of a factor in forest sector
job loss than has regulatory change and removals
of lands from production. Certainly that has
been the case in the U.S. Pacific Northwest,
where job loss due to injunctions in support of
the northern spotted owl caused roughly 50
percent reductions in timber harvesting on fed-
eral lands between 1988 and 1992. This led to
the loss of nearly 30,000 forest sector jobs.

These job losses were not linked to technolog-
ical change; the U.S. industry would otherwise
likely have been experiencing employment
increases by 1992 similar to those of the Cana-
dian industry as it rebounded from the reces-
sion of the early 1990s. Instead it was visited
its own special form of hell; a hell of community
breakdown, dislocation, poverty and broken
dreams. In the words of the Forest Ecosystem
Management Assessment Team that surveyed
the consequences of the spotted owl plan: “A
sudden drop in harvest levels creates more
than an economic shock or the sudden loss of
jobs. It creates a social shock that can reduce
the ability of a community to respond to eco-
nomic change. Persistent poverty, increased
commuting, emigration of community mem-
bers, the breaking up of family and community
support networks, changes in leadership, low
morale, uncertainty, heightened conflict...”

Much has been made recently of the overall
growth of the economy of the Pacific Northwest,
as though that shows no real harm has been
done by the devastation of many timber towns.
As the FEMAT study warns, “much of this
regional economic growth is apt to be centred
within the more metropolitan areas of the
region, and hence these statistics mask much of
the hardships that individuals and communi-
ties may be confronted with in the decades
ahead. Many communities are already dis-
tressed and additional job loss would be forth-
coming. The changes in federal forest manage-
ment will indeed represent severe impacts to
many of the individuals, firms and communi-
ties within the region.”

_ This concern not to “mask” severe specific
impacts with penena es indicators of prosper-
ity was shared by B.C.’s Forest Resource Com-
mission in its 1991 report:

“In generalizing the impacts of particular
actions, we get a false picture of what’s really
going on in the economy. For example, a 10 per-
cent reduction in logging and forest activity
would produce a net effect of less than 2 per-
cent on the provincial GDP. But it would have a
devastating impact on the small communities
Beate the 10 percent reduction actually takes
place,

This is clearly shown in a 1995 study by Dr.
Robert Lee of the University of Washington.
Surveying the economic and social impacts of
the owl reductions, Lee shows that whereas
there has been a net gain of jobs in all but four
of the 72 “owl counties” from 1988 to 1992, “this:
apparent robustness clouds a significant decline
in average county employment earnings (as
well as yet unmeasured employment and earn-
ings losses for individuals, families and commu-
nities that had relied on wood products employ-
ment).”

Many counties showed increases in employ-
ment but a decline in average wage and salary
earnings, a finding that shows that “family
wage jobs in the wood products industry are
being replaced by subfamily wage jobs in the
service sectors.”

This is consistent with I.W.A. CANADA’s
findings in a joint union-federal government
study that compared forest workers’ economic

rrospects between 1978 and 1985. The Forest
Bectae Labour Adjustment Study found that

“invariably” workers who left the forest indus-

over that period “suffered a heavy battering
of their real incomes — a one-third income loss
was common in B.C., closer to one-fifth or one-
quarter in the East.” Those who remained
unemployed of course suffered even heavier
loss of income.

The point, then, is that it is quite wrong to
believe that land-use decisions don’t eliminate
jobs and that they cannot have even worse
impacts than technological change. As one
LWA. faller put it, “at least with tech change,
we've still got an industry.”

It’s also wrong to believe that overall regional
or national prosperity compensates for acute
job loss and community dislocation as a result
of land-use choices. As the FEMAT study notes,
people are unlikely to feel better about their
own misfortune merely because there is gener-

alized prosperity in the
region or the nation.

There is no question, then,
that there are economic and
social costs or impacts of
large-scale removals from
production: the issue is really
one of the incidence of those
costs or impacts. People
must ask whether they truly
think that it’s fair for a small
number of workers and their
communities to take the
brunt and pay the full price
for social changes judged to
be of benefit to everyone.

THE CONTRIBUTION OF THE
FOREST SECTOR

The forest industry is
Canada and British Colum-
bia’s chief source of export
earnings. According to the
federal government report
The State of Canada’s
Forests for 1995-6, the Cana- |
dian forest industry had
exports of $32.4 billion in
1994, contributing a positive
balance of trade of over $27.8
billion. The one-year
increase in exports from 1993
was 21.5 percent, while the
10-year average increase
was 7.9 percent.

Forest products’ contribu- fo
tion to the balance of pay- directly.
ments grew even more
rapidly, showing a one-year rise of 24.5 percent
and a 10-year average jump of 7.2 percent. This
should give the lie to claims that the forest sec-
tor does not strongly contribute to Canada’s
economic well-being. In fact, as the federal
report points out, “during the past 10 years,
Canada’s net exports of forest products have
been critical to its ability to maintain a positive
trade balance, particularly during the global
recession.” In the absence of strong forest sales
abroad, the report warns, “a $4.5 billion deficit
would have been recorded in Canada’s balance
of trade in 1994.”

The forest sector is also a major source of
con jobs. That’s partially because the lion’s
share of forest wealth in Canada and British
Columbia is captured by labour. According to a
recent study by Drs. Richard Schwindt and
Terry Heaps of Simon Fraser University, for
example, a stable two-thirds of all forest-gener-
ated wealth goes to forest-sector workers. This
is the share that particularly fuels local
economies as workers spend, save and pay
taxes. .W.A. CANADA and other forest unions
can take full credit for this fact, as well as for
the contribution forest workers’ high wages
make to their communities, the economy and
government treasuries.

The “multiplier” effect of Canadian forest sec-
tor spending, for instance, created 741,000
“indirect” jobs in 1995, on top of the 247,000
“direct” jobs in the industry, according to Price
Waterhouse.

This impact is particularly strong in forest-
based communities: of 55 economic sub-regions
in B.C. studied by the provincial Ministry of
Finance in a 1993 study for the B.C. Round
Table on the Environment and the Economy,
fully 22 generated at least one third of basic
income from the forest sector. The federal

~ “State of Canada’s Forests” report indicates

that across the country over 300 communities
depend on the forest sector for over half their
basic income. This is the wealth that “drives”
the economies of those communities and allows
other, secondary and tertiary sectors to thrive,
the B.C. study notes.

In addition, forest sector wage levels have
tended over time toward setting “community”
wage rates: they help to pull up the wages of
others, both unionized and non-union workers.

But forest sector wealth is also important to
the economies of major cities. A 1995 Chancel-
lor Partners ESpere| for instance, shows that the
forest sector substantially impacts the economy
of Greater Vancouver: direct forest employment
in the Vancouver metropolitan area totals
19,500, or 2.4 percent of the total.

That is only a small part of the story, how-
ever: the forest sector outside Vancouver pow-
erfully stimulates the city’s economy. In fact,
“the total number of jobs in Metro Vancouver
supported by the forest industry in 1993 is esti-
mated at 133,000 or 16.3 percent of the region’s
total workforce,” the study concludes. In fact it
notes, of the 258,000 people estimated to depend
directly or indirectly on forest-generated
employment, 52 percent of them live in Metro

e Across Canada, over 300 communities depend on the forest sector
for over half their basic income, employing nearly 250,000 workers

Vancouver. Fully 44 percent of the B.C. forest
sector’s $14.2 billion contribution to the provin-
cial GDP was generated in Greater Vancouver.

Forest sector workers also help fuel federal
and provincial treasuries. According to Price
Waterhouse’s 1995 survey, “The Forest Indus-
try in Canada’, forest sector income tax remis-
sions on behalf of the industry’s workforce
totalled $4.6 billion, “a $233 million increase
over 1994, resulting from higher employment.
levels and employee earnings.” This does not
include sales tax or Goods and Services Tax on
forest workers’ spending.

In British Columbia, 1995 was the first full
year of the Forest Renewal Fund; income tax
remissions of $1.9 billion still exceeded in
stumpage, royalties and rent which totalled
$1.8 billion, according to Price Waterhouse.

CONCLUSIONS

Forest sector employment and revenue, then,
remain powerful stimulants to provincial, fed-
eral and local economies. This force comes from
the impact of direct forest sector employment,
indirect employment generated by the forest
sector and huge forest export earnings.

It is misleading to say that the forest sector
is an insignificant or unimportant factor in the
economy of Canada or of British Columbia: it
remains Canada’s largest single source of
export earnings and the largest overall source
of employment. It remains crucial to the
economies of many forest-based communities,
but also has a substantial effect on the economies
of large cities. Canada is after all, with a few
exceptions, a land of single-industry towns;
forestry is a big part of that mosaic.

It is also misleading to state that the number
of net jobs in the industry is declining: forest
sector employment for both Canada and British
Columbia has increased through the nineties,
particularly with the growth of value-added
production and the development of more strin-
gent regulations that require more environ-
mentally sound and labour intensive forest
management practices.

It is misleading and self-serving, as well, for
environmentalists to claim that while tech
change eliminates jobs, land-use decisions
somehow have no impact on employment.

Finally, it is misleading to state that techno-
logical change necessarily eliminates jobs. To
the extent it allows more efficient production
and enhances an industry’s ability to compete,
new technology likely protects as many jobs as
it eliminates; the failure to introduce new equip-
ment is just as likely to eliminate jobs as is the
introduction of new technology. It is important
to understand and analyze the twin effects of
the business cycle and new technology.

Productivity improvements make possible a ~
higher standard of living. In our imperfect
world, it is part of the challenge faced by unions
that we must constantly struggle to justify and
win the wage gains that productivity allows.

EET

LUMBERWORKER/DECEMBER 1997/15