Two tales of a single county

 

Dear HCN,


In your recent article ("Beauty and the Beast," HCN, 4/14/97), Paul Larmer painted a rather bleak picture of the Kane County, Utah, economy. That negative economic portrait was part of an effort to explain why it was "no wonder everyone was hopping mad when the president took that hope (of the Andalex coal mine) away (by establishing the Grand Staircase-Escalante National Monument)." Larmer described the changes in the Kane County economy in the following terms:

"Not long ago, tourism was balanced by a substantial natural-resource-based economy. The scales tipped during the early 1990s, when Kanab lost more than 500 timber and uranium mining jobs. Families that had a primary breadwinner earning $20 to $30 an hour suddenly had to move or change occupations. Those who wanted to stay had to send Dad to work as a trucker or laborer in a distant city and add Mom, Grandma and the kids to the work force, most often cleaning hotel rooms and flipping hamburgers for tourists at $5 an hour.

"In 1990, 1.5 people per Kane County household were in the work force and the average income was $25,000, according to a recent economic report prepared for the county. Today, 2.6 people work per household and the average income has eroded to $18,000."

Unfortunately for your readers, Larmer stretched too far in providing an economic explanation for this anger over the establishment of the national monument. Every one of the quantitative factual statements made in this quote are grossly in error if they were intended to characterize the overall Kane County economy.

It would not have taken an economist to spot the exaggerations contained here. Some back-of-the-envelope arithmetic would have shown that these numbers simply could not be true. Consider the following:

These numbers imply that earnings per job (as opposed to earnings per household) fell from about $17,000 to about $7,000, a catastrophic crash to well below minimum-wage levels.

These numbers imply that an employment boom of major proportions took place in Kane County. To provide each of the growing number of households with 2.6 jobs, employment opportunities would have had to more than double, adding an additional 2,800 jobs to the economy.

These numbers imply that every man, woman, and child in Kane County, regardless of age and health, was "driven" into entering the workforce. The projected number of people per household in 1997 in Kane County was 2.8; apparently, fully 2.6 of them were actively employed in the commercial economy.

Kane County was gaining population through immigration, not losing it throughout this time period. People do not usually move towards economic catastrophe to work for less than minimum wage.

In addition, one might expect that regularly available state and federal data sources would have been consulted to see if these startling reported changes could be confirmed. State and federal data indicate the following:

In 1990, only one in 15 Kane County households earned the $50,000 per year implied by the $20-to-$30-per-hour wages cited. Such wages do not even remotely characterize a typical household.

The jobs added in Kane County during the 1990s did not pay $5 per hour. The average annual wage in the expanding sectors, $16,300, was above the county-wide average, not below it and is closer to $10 per hour.

Average incomes were rising significantly, not falling precipitously. Per capita income rose 33 percent in nominal terms and 15 percent in real purchasing power. The number of workers per household was declining modestly, not surging upward. This is what would be expected after major layoffs and before the economy can fully adjust.

This is not an attempt to paint a rosy picture of the Kane County economy. It has been through some wrenching shocks and some households have been badly hurt. The Kane County economy, however, has shown impressive vitality and resilience and can be expected to continue to do so.

How does one explain the startling contrast between the economic story that High Country News and local Kane County officials tell and the story that the economic statistics seem to tell? A good part of the answer, I suspect, lies in the fact that neither High Country News nor local officials like the economic changes that are taking place in the West. Their objections are not, however, economic. They are social and cultural. The new residents, the new businesses, the additional tourists, etc., carry with them values that the newspaper and Kane County officials do not much appreciate. Both wish that the land-based natural resource industries of the past could have prospered instead. Even if the new jobs paid good wages and provided stable employment, they would be objectionable on cultural and social terms.

These social critics, however, do not have the courage of their convictions. Instead of resting their case on their cultural and social objections, they wish also to show that the economic changes are causing economic decline. This is where things get confusing. Cultural objections that are legitimate and important to contemplate are restated in economic terms that are patently false. It is not clear that this helps inform the public dialogue.

If Kane County's residents and leaders are going to retain those things about their communities that are most important to them while adapting productively on their own terms where they have to, they need an accurate picture of where their economy is now and where it is heading.

Telling and re-telling false economic stories that reinforce their anger at the federal government and "outside" environmentalists does not equip them to protect what they want to protect. Instead, it simply weakens and confuses them, making it more likely that they will face the outside pressures for change in a passive and helpless posture. High Country News is not doing them a favor by repeating uncritically these false economic stories. It is also not doing its readers a favor by reporting as economic facts what is primarily economic propaganda from the anti-environmental backlash.

Thomas Michael Power
Missoula, Montana

The writer is professor of economics and chairman of the economics department at the University of Montana. A paper detailing the calculations reported here can be obtained by e-mailing him at tmpower@umt.edu.