Logging the Brule Part 2: The Economics

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“Politics: a strife of interests masquerading as a contest of principles. The conduct of public affairs for private advantage.” Ambrose Bierce

Ambrose Bierce was a late 19th – early 20th century journalist and short story writer. He is best remembered for “The Devil’s Dictionary,” a collection of satirical definitions of American society. Last week I discussed the changes to the Brule River State Forest to increase the acreage available for logging. The state has mandated that 75% of state forests be managed for logging. This mandate certainly fits Bierce’s definition of “conducting public affairs for private advantage.” This article looks at some of the economic issues around logging our public resources.

We know that logging in the national forests has been a money loser for the taxpayers. The U.S. Forest Service (USFS) spends so much money administering timber sales, building roads for access, reforestation, and repairing ecological damage after logging, that the timber sales program is a net money loser. Taxpayers lose hundreds of millions of dollars per year on logging. The USFS timber sales program functions as a destructive form of government subsidy to private logging companies.

Environmental groups claim the government could completely stop timber sales, employ every logger to do ecological restoration and save millions of dollars for taxpayers (see Environment NOW http://www.environmentnow.org/forest.html). As for the economic benefits of logging, the report “The Economic Case Against National Forest Logging” says “Recreation, hunting and fishing on our National Forests contribute at least $111 billion to the gross domestic product and generate 2.9 million jobs each year. These uses contribute 31.4 times more value to GDP and generate 38.1 times more jobs than the timber sale program” (http://sustainable-economy.org/wp-content/uploads/The-Economic-Case-Against-National-Forest-Logging.pdf).

Is this the case with our state and county forests? Perhaps they do a better job because little road building is required in state and county forests. But we just don’t know. Apparently studies have not been done for public forests in Wisconsin. Repeated Google searches turns up none. There are many items on the value of the forest products industry to the economy written by industry related organizations and supporters. There is no dispute that forest products and related processing and manufacturing activities are a significant part of Wisconsin’s economy. No one advocates that we should stop using wood products. How we use them, and specifically how we use our PUBLIC lands, is the issue.

Should our public resources be used for private gain? Historically our natural resources have been used for private gain and the public was left with the costs. In the 19th century a few timber barons became very wealthy. The logging workers made a pittance and were left with the injuries and early death from the dangerous work. The public was left with a denuded landscape and severe wild fires when the slashings burned. Mining and grazing on public lands have similar histories.

Under a supposed free marketplace, private profit should be generated by private investment not public subsidy. In Wisconsin 68% of forested land is owned by private individuals and businesses. With about 17 million acres in forest there is considerable opportunity for supplying the raw materials for the forest products industry. Our state forests are only 5% of the forested land (county, state and federal forest is 32%). Few people advocate that we should not harvest trees from our state forests. Many people do question how much should be harvested. If it is 75%, then the acreage should be managed primarily for logging.

Would the forest products industry and the Wisconsin economy suffer if we reduced logging on our public lands? At the national level less than four percent of U.S. wood supply comes from our national forests. Environmentalists say this could easily be replaced through more recycling or less waste. Commercial logging of our national forests is not only ecological damaging and economically wasteful, it is also unnecessary (Environment NOW http://www.environmentnow.org/forest.html).

Some simple arithmetic puts the local situation in perspective. The DNR says in the Brule River State Forest 7,998 acres were harvested between 2002 and 2015 (615 acres per year). This generated income of $6,173,636 for the state. With a state population of 5.7 million that is about 8 cents per year per person. Not exactly a budget saving bonanza for the Wisconsin taxpayers. Total state and county revenue for logging for 2014 was $46.8 million or $8.20 per person. These are gross figures. They do not account for any timber sale costs. Obviously taxpayers are not going to suffer greatly if we logged less.

How about jobs? Environment vs. jobs is a false issue. Environmental protection, like other economic changes, may shift jobs but it doesn’t reduce jobs. Logging jobs have been declining for years due to mechanization. The U.S. Department of Labor says Wisconsin had 2540 “logging equipment operators” in 2015. This does not include all the jobs, such as truck drivers, created by logging activities but it does show that the lumber jacks are a very small occupation.

Estimates of the total employment in forest products related businesses range from 55,000 to 62,000. These figures include every job remotely related to wood or work products. The industry is a sizable part of our economy at about $26 billion. To put these numbers in perspective, Wikipedia says Wisconsin’s gross state product was about $248 billion. Tourism accounts for about $19 billion. Manufacturing (including wood products), agriculture, and health care are big players in our economy.

So it does not seem likely that Wisconsin’s economy will crash if we manage more of our public forests for objectives other than logging. We could manage more acreage for old growth. We could foster more diversity for the whole ecosystem. We could restore damaged habitat. We could have some wilderness where we don’t presume to know better than nature. Given enough time, we could even restore the magnificence of some of the pre-settlement forests destroyed by human greed. To do so we need a better balance in the management of our forests. We need to make sure our public policy serves the pubic and not just “private advantage.”