44 



equaled those of the late 1970's, new investment essentially re- 

 placed labor in the sawmilling sector which — it created jobs in the 

 manufacturing sector. 



Remanufacturing involves adding value to basic lumber, to 

 produce products such as specialty timber, doors, windows, and 

 cabinets. The net loss of jobs on the north coast of California has 

 been largely — in part because this region has lagged behind other 

 parts of the industry in investing in new remanufacturing plants 

 and product lines. 



I would like to give an example of a successful transition from 

 an old-growth-dependent industry to one involving the remanufac- 

 turing of new wood products. Last year, I conducted a survey of 

 wood remanufacturing firms across the State of California. The 

 owner of one firm I spoke with, during the 1970's had one product. 

 She produced large plankings from old-growth redwood to make 

 house siding for her market in Hawaii. 



During the 1980's, the supply of old-growth planks totsdly dried 

 up. However, she did not have to lay off one person in the 110 peo- 

 ple she had employed. During the 1980's, she made a successful 

 transition to a totally new range of different products that could be 

 made from old-growth redwood — ^from young growth redwood and 

 Douglas-fir. This type of job growth is the only strategy that has 

 proved successful on a regional level in creating more timber jobs 

 in the State of California. 



The second key trend not captured by the standard view of forest 

 counties is that the forest industry no longer dominates the local 

 economies as it once did. While slightly more than 8 percent of 

 Humboldt's workforce is in the timber industry, the economic stim- 

 ulus provided by the timber industry is nowhere near the estimates 

 of one-half to two-thirds that will be mentioned in these proceed- 

 ings. When all sources of income are accounted for — this includes 

 wages, Social Security payments. Medicare, retirement benefits 

 from interest and dividends — the role of the timber income has 

 dropped substantially. 



In the early 1970's, $1 out of every $3 of economic stimulus in 

 the north coast region came from the timber industry. By 1990, it 

 had dropped to $1 out of $9. 



Most evidence also suggests that the new residents who have 

 brought in much of this new income have moved to this area be- 

 cause they value the high-quality environment. The much dis- 

 cussed income or employment multipliers that drive the creation of 

 local jobs is essentially the same for both timber 



Mr. Rose. Let me ask you a question. I know I have had to be 

 away for the first part of this, but — what is the point you are try- 

 ing to make by this. The basic thing here seems to be they have 

 the trees and you don't. 



Now, what point — ^what are you adding to that? 



Mr. Stewart. What I am sa5dng is in historic 



Mr. Rose. I know it may not be as important. Are you trying to 

 say this is not as important an item for the local economy as it 

 used to be? 



Mr. Stewart. I am saying that the impact of taking a large por- 

 tion of this old growth out of the timber inventory into wilderness 

 will have a significant local impact in terms of — less lumber will 



