Job Creation

Creating New Jobs

(This article is based on a memo originally written  in March 1992, during the last recession.)

We're all becoming increasingly aware of the weakness in the regional economy and there are indications that it may get even worse before it gets better.  With this in mind, I did some calculations recently to determine the annual growth on the 12,000 acres of land that I help manage for all of you, and how many jobs could be created as a result of harvesting that growth.  I then compared these numbers with the actual annual cut and the jobs it creates and found quite a difference.  The table below illustrates the difference between actual and potential cuts and jobs (Mbf = thousand board feet, cd = cords):

      Annual Growth

      Annual Cut

      Annual Uncut

      3,000 Mbf

      2,000 Mbf

      1,000 Mbf

      3,000 cd

      2,000 cd

      1,000 cd

      24 local jobs

      16 local jobs

      8 local jobs

       

 

 


The job numbers are based on the estimate of 250 Mbf (= 500 cd) per man year in logging, trucking, sawing/splitting and grading. Furthermore, each forest products industry job indirectly creates an additional .4 job for people supplying goods and services to forest products employees and their families.  This is known as the multiplier effect.  The above are the direct and indirect jobs that the timber and wood create in the local economy and do not include further processing of lumber elsewhere by the industrial materials, construction, furniture and cabinetry industries.  Additional processing increases the number of direct jobs 2-5 times, with high grade hardwood lumber creating the most jobs because it is processed much more than low grade hardwood or softwood.

Jobs from 100 Acres

Here's another way of looking at it.  If you own 100 acres which grows 250 bf plus .25 cd/ac/yr, then you grow 25 Mbf plus 25 cd every year, which is .21 man years of local work every year including the multiplier effect.  If you are growing high grade hardwood (or pruned pine), then you could be creating up to 1.05 full time jobs because of the additional processing involved and the multiplier effect in goods and services.  The calculations for 100 acres are as follows:

    Minimal annual local work created from low grade timber and wood:
    25 Mbf + 25 Cd = .15 local man years direct work
     x 1.4 goods & services multiplier
     = .21 man years local work

    Optimal annual total work created from high grade hardwood:
     .15 local man years x 5 (factor for maximum processing)
     = .75 total man years direct work
     x 1.4 goods & services multiplier
     =1.05 total annual man years

Statewide Potential

It's clear from the above calculations that there is much potential for job creation in the forest products industries, especially when you consider that we only harvest about a quarter of the annual growth in Massachusetts.  Extrapolation of the above calculations to the entire state would indicate that employment in timber related industries could increase from the present 5,000+ in Massachusetts to at least 20,000.  Including the multiplier effect, the total number of jobs created by the timber resource could be 30,000.

This maximum of 30,000 jobs would assume that nearly all (instead of less than 25%) of the annual growth was harvested and that nearly all the timber was grade material processed into high value added products by regional businesses (instead being exported or only sawed into rough lumber which represents about 20% of the total potential processing).   The percent of annual growth that is harvested could be increased if more land was under forest management.  The proportion of higher grade timber sustainably produced could be increased by eliminating the practice of high-grading (cutting only high quality trees) which leaves behind a forest of low quality trees.

There is additional potential for jobs in timber stand improvement (TSI), that is, thinning and pruning of young stands.  Short term TSI jobs create many more long term jobs because they make higher quality timber, which also earns you a high rate of return on your forest investment.  Remember too that you are producing a renewable resource which fixes carbon (thereby reducing global warming), cleans and cools the air, stabilizes the soil, and provides wildlife habitat.

Our region has the soils, climate and genetic resources capable of producing some of the highest value timber in the world--a fact which world markets already recognize, as evidenced by the log trucks traveling north on 1-91.  The question is who will benefit from the development and processing of this resource.  Will it be the people of western Massachusetts or will it be people in Europe, the Far East, and elsewhere in the U.S.?