Miners and loggers feel the pinch
JERRY Davis knows firsthand the difficulties facing rural Americans who earn their living from the land. He worked for eight years in the forests of Washington State, ``until the timber industry started going to pieces.'' He then moved back to his native west Texas, where he got a good job in his specialty, herbicides -- eradicating weeds around the region's hundreds of oil rigs. But with this year's precipitous drop in the price of oil, many of the low-producing rigs have been plugged up, oil companies have cut back on field maintenance, and Mr. Davis is once again experiencing the worry of financial uncertainty.
``It all depends on what happens over yonder,'' he says, referring to the OPEC oil cartel, and specifically to Saudi Arabia. ``We're hoping they'll get their act together, but in the meantime everybody around here is operating pretty much on a day-to-day basis. And every day there's less work, and less people working.''
Davis is living in the latest trouble spot on the map of the nation's depressed natural-resource-based industries. Oil and gas, timber, and mining enterprises are reeling from the effects of a five-year-old recession and competition from cheap, abundant imports.
Since much of the production and processing of America's natural resources takes place in rural settings, these areas bear the brunt of the slump.
``The economic recession of the early '80's hit the non-metropolitan areas of the country harder than the metropolitan areas, a fact that's not very well known,'' says Calvin Beale, director of demographic research at the US Department of Agriculture. He says it took longer for rural areas than for cities to begin recovering from the high unemployment of a few years ago, and since the recession ended, metropolitan areas in general have increased their advantage over rural America in the rate of job creation.
Going down a list of resource-based, largely rural industries -- agricultural services, mining, timber, textiles -- Mr. Beale notes, ``Nothing has been working very well there.''
Timber is a case in point. The Canadian lumber industry, using timber from government-owned forests that is sold to them at prices below market rates, has been able to increase its share of the US market from 18 percent in 1975 to more than 35 percent today, a jump that has cost the American lumber industry more than 30,000 jobs.
``In essence, Canada is exporting unemployment to the United States,'' says Charles Thomas, president of the Georgia-based Southern Lumber Manufacturers Association. He says these imports have put a particular damper on the Southeast, where more than two-thirds of the lumber is in the hands of small landowners.
``And it's not that the Canadians sell a better product, or are more efficient,'' adds Mr. Thomas, responding to suggestions that American lumber needs to become more competitive. ``Be it fair and equal, we can compete.''
In less than 10 years, at least 629 lumber mills have closed across the country. And as lumber manufacturer Robert Hixson of Pine Bluff, Ark., notes, ``Many of those mills were the backbone of their communities.''
Thomas says he's confident Congress will act this year to pressure Canada, through the threat of tariffs, into rethinking its ``unfair trade practices.'' But Mr. Hixson, while supportive of congressional action, says he sees a worse threat in the form of newly planted pine forests in Brazil, a country where cheap labor costs will make subsidies such as Canada's unnecessary.
``In the not-too-distant future,'' says Hixson, ``pine from South America is going to make the Canadian problem look like a Sunday school picnic.''
Minnesota's Iron Range has not fared any better. The region's economy is closely tied to taconite, marble-sized iron pellets used to make steel. When the industry began to decline five years ago, the region started through an economic wringer that is only now showing signs of easing.
``It's just been sliding further and further all the time,'' says Eldon Kirsch, District 33 director of the United Steelworkers of America. Five years ago, his union had 13,000 members working in the industry. Today, there are 3,200.
``It's tough,'' says Bill Kauppinen, who was laid off by Evelyth Mines in mid-1982. In his last full year in the mines, he earned $28,000. Last year, welfare payments and his wife's part-time job brought in just under half that for the five-member family. He's still looking for a job.
``We'll never see the income that we enjoyed in the late '70s and early '80s,'' he says. ``There are some jobs that a person could pick up. [But] I can't support a family on that.''
Any new jobs on the range pay $4 to $8 an hour, according to the Hibbing Chamber of Commerce, compared with the $12- to $13-an-hour basic wage that the mines used to pay. This contraction of income has not only hurt miners. Construction jobs are down; homes have lost substantial value. Even in Hibbing, where the economy has fared better than in smaller towns of the region, school enrollment is down by nearly a third since 1980, a drop attributed to the departure of families seeking better opportunities.
In west Texas, Ricky Coon is experiencing what Texas A&M agricultural economist Carl Anderson describes as a ``double-whammy'' on the two economic pillars of rural Texas: agriculture and oil.
A Texas A&M study last year showed that one-third of Texas farmers derive income from oil leases. Dan Fergus, president of the West Central Texas Oil and Gas Association, estimates that better than 10 percent of the farmers around Abilene, Texas, earn extra income as ``pumpers,'' maintaining oil pumps on the farmland they rent.
``I was helping work about 1,500 acres [of cotton], and I really loved it,'' says Mr. Coon, a 19-year-old newlywed from Seminole, Texas. ``But last year prices got so bad I finally quit; it was either that or go broke.'' So he took a job servicing oil rigs.
He now watches warily as his new employer, Bonner Lease Service, cuts slowly back on its work force. ``You just have to have a wait-and-see attitude. I'm not sure what's going to happen tomorrow, so it's pretty much impossible to plan what I might do next year.''
About a third of the 100 or so small towns of west Texas are registering healthy growth. But another third are on the wane as the number of people involved in farming and oil declines and as the greater diversity of the region's 10 metropolitan areas siphons off the towns' youth.
``Some of these towns are destined to be no longer,'' says Phil Neighbors, development director of the West Texas Chamber of Commerce in Abilene. Towns that depended on local oil taxes to maintain schools and other services are faced with raising taxes or cutting back, a choice that could lead more people to move out. Adds Dr. Anderson, ``Conditions are causing a good many people to pull up stakes.''
Such movement is not new to west Texas, where the vagaries of the oil industry have created fluctuations in employment for decades. But the relative wealth of the last decade has encouraged more people to stay put, maybe even to buy a home, which can make moving now more difficult.
``I think we could begin to see episodic hunger and other residual effects of unemployment in west Texas within a year if things don't improve,'' says Hugh Parmer (D), a state senator from Fort Worth. Two years ago Senator Parmer undertook a study of hunger that included the ``new poor'' in the so-called Golden Triangle, an oil-dependent region east of Houston that was knocked out by the fall in oil prices after 1981.
That study found people who all their lives had disdained ``government giveaways'' now filing for food stamps and other assistance. It also revealed that rural hunger, while smaller in magnitude than urban hunger, is compounded by the lack of mechanisms for delivering services to rural areas.
``A lot of these people are out of work after 15 to 20 years with the oil business,'' says John Hall, county director of the US Agriculture Department's Stabilization and Conservation Service in Seminole. ``Most of them have their homes paid for, so I feel a lot of them will stay,'' he says. ``But as the farm service companies go out, and the oil people start going out, you're going to see things shrink.''
Part 3 of a five-part series. Next: What does the rural upheaval mean for the nation?