With the recent logger/trucker work stoppage at J.D. Irving and the looming shortages of wood at mills, logging labor is finally getting coverage in the news. Many readers, however, are confused by some of the economic arguments, which do not correspond to what they learned in Economics 101. Maine forestry labor economics follows a different logic. But once you get the knack of it, it all starts to make sense. To see how well you understand this logic, try answering the following questions:

1. Logging is a demanding, dangerous job that requires long hours and long travel from home. It involves operating expensive, complex machinery, having knowledge of tree species and timber markets and knowing complex laws and best management practices. It is also restricted seasonally. In light of these, hourly logging wages are:

a) right up there with steelworkers, undersea divers and other occupations with similar risks;

b) about the same as paper mill workers or other industrial workers;

c) similar to McDonald’s burger flippers in Portland.

The answer is, similar to burger flippers. In fact, average logging wages in Maine are about half that of paper workers.

2. Thousands of loggers have been displaced by mechanization over the last few decades. This means that:

a) there is a surplus of loggers;

b) a shortage of loggers.

The answer is a shortage. By law, landowners cannot hire bonded Canadian workers unless there is a shortage of American workers. In 2003, landowners in Maine hired 649 bonded Canadian workers to do jobs ranging from operating logging equipment, driving trucks, supervising operations and even engineering. That means there must have been a domestic logger shortage.

3. Given that there is a labor shortage, loggers are telling their children to:

a) get in the business to fill the labor shortage;

b) avoid the business.

The answer is avoid. Several recent surveys of loggers in Maine have shown that the majority of loggers are telling their children to not get into the logging business. The average logger in Maine is in his late 40s, and there are inadequate replacements coming in for the future.

4. Given that there is a labor shortage and given that productivity has gone way up, due to mechanization, logger wages relative to inflation in the last several decades have:

a) increased;

b) decreased.

While one would think that if there were a shortage of workers that employers would attract more workers through higher wages and benefits and increased training, the answer is that over the last two decades, real (inflation-adjusted) wages have fallen. According to the Department of Labor study, since the 1970s, logger productivity increased 74 percent, landowner profits went up 169 percent, but inflation-adjusted wages for loggers declined by 32 percent.

5. Workers’ compensation costs have been declining over the last decade due, in part, to logger training programs and increased mechanization. As a result of such cost saving (WC had been up to 45 percent of payroll), loggers are seeing:

a) increased wages;

b) no benefit.

A Department of Labor study concluded, “No one has reported to us that contractors have had any ability to retain benefits of lower WC costs or improved productivity for themselves and their workers.”

6. Loggers in northern Maine have few choices for lands to cut on and few choices of mills to sell to. Such markets, dominated by few buyers, are referred to as “oligopsonies.” They are not characterized by major competition. The big companies set take-it-or-leave-it prices. Forest industry representatives argue that loggers should not be allowed to organize because:

a) collective bargaining is a threat to industry’s economic domination of an imperfect market;

b) collective bargain is a threat to the free market.

The answer is threat to the free market. Industry representatives claim that the loggers and truckers are not employees, but independent contractors who would be violating anti-trust laws by doing collective bargaining.

7. The federal government sets a minimum wage that can be paid to Canadian bonds so that there will not be an undue impact on Maine workers. Knowing that markets are skewed in northern Maine by market domination, and knowing that low minimum wages would price Maine workers out of the market, the government is setting minimum bond wages:

a) above;

b) at;

c) below where wages would be in a free market.

The answer is below. The DOL report estimated that if there were a free market, wages would be 36 percent higher.

While the correct answers may seem to defy common sense, there is a pattern behind them. Large landowners have tried cutting costs where they can, and labor, because of an imbalance of economic power, is one area where they can. Government, rather than restrain this behavior, has enabled it.

The result has been a steady decline in job security for loggers. Loggers are not working 12 to 18 hours a day because they love the job more than being with their families, but because they must. The “shortage” of loggers in a region with high unemployment and many displaced loggers is a shortage of people who want to work long hours, in difficult conditions for low wages.

With reserve wood supplies dangerously low at many mills, we are beginning to see another cost of logger attrition. Logging contractors have little incentive to have extra capacity for times of higher demand and better prices. They cannot afford to pay for unused, expensive machinery during slack markets. There also is a smaller pool of surplus loggers who are available to work when demand is high – unless wages rise significantly. While mills are trying to cut costs to be able to survive global competition, cutting the cost of loggers who supply their wood is not a long-term solution.

The cost of mill shutdowns is greater than the cost of paying loggers a living wage. According to a 1996 economic study by the Maine Forest Service and State Planning Office on the impact of the forest referendum in 1996, wood only makes up 6.4 percent of the cost of making paper and 21 percent of the cost of making lumber. Because so much of logging is mechanized, labor only represents around one-fourth the cost of cutting wood. Increasing only compensation for labor, but not machinery by 25 percent would increase the cost of making paper by four-tenths of 1 percent. Increasing all the costs of logging by 25 percent would increase the cost of making paper by 1.6 percent.

As the average age of loggers increases, one wonders who will be cutting wood decades from now. Few young people are attracted to work at difficult jobs with long hours, low pay, low security and low status. Large landowners cannot depend on Canadian bonds for such labor in the future. The average age of these is higher than that of Maine workers. The Canadians, like Maine workers, are telling their children to find another profession.

The logging profession in Maine needs decent wages and benefits, professional training, and higher status if it is to retain current wood cutters and attract new ones. The state can help by allowing collective bargaining in a constructive framework. The state can also use the current crisis to look for ways to make the whole forestry system work better – not just improve one sector at the expense of another. While some representatives of big landowners or mills have claimed that paying loggers more will hurt the forest industry, they seem to forget that loggers are part of the forest industry too. Indeed, without loggers to cut the wood, there would be no forest industry.

Mitch Lansky, a resident of Wytopitlock, is the author of “Low-Impact Forestry: Forestry as if the Future Mattered.”