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Forests and employment

K. Theophile

Karin Theophile is a policy analyst with the International Forestry Program, United States Department of Agriculture Forest Service. Washington, DC, USA.

This article considers the relationship between forests and employment. It is not meant to be an exhaustive analysis of jobs in forest-based activities or to weigh the environmental pros and cons of forest development against its employment impacts. Rather, it is a snapshot of the direct and indirect employment provided by forest-based activities.

Forest-based industries are job-intensive compared with other industrial sectors

Employment is critical to economic development. Rich and poor nations alike have national policies and programmes to attain full employment and to avoid the dangers of high unemployment. It is clearly in any country's interest to maximize domestic employment. The benefit to a given country of increased employment in other nations should also be apparent. When trading partners are close to full employment, their economies develop and trade with wealthy nations can trigger growth in poorer ones. For example, one-quarter of the United States economy is dependent on foreign trade and most recent economic growth is driven by exports (The Economist, 1995). Thus, the United States economy and employment rate is affected by economic development and employment in other nations. This is what it me-arks to be part of the global economy.

Forests and forest-based industry are increasingly recognized as key elements of development as they figure prominently in people's lives in terms of social and economic benefits. Increasingly, policies are explicitly constructed to maximize the economic and employment benefits of forests and forest-based industry.

Forest-based industries are relatively job-intensive compared with other industrial sectors, and more so if jobs attributable to recreation, non-timber forest products (NTFPs) and small-scale informal sector employment are included. Forest-based industries generate revenue in rural locations, especially valuable as the number of agricultural jobs wane as a result of increased mechanization and land-use intensification (Laarman and Sedjo, 1992). Additionally, some forestry activities are complementary to on-farm activities, as they occur during agricultural slow periods, and some agricultural skills are easily transferable to forestry and wood processing.

While not as well documented as the timber industry, activities in small-scale forest-based enterprises, particularly those engaged in non-timber forestry activities, make significant economic contributions, provide rural employment opportunities and diversify local economies. Some NTFPs comprise industrial-scale businesses, such as rubber tapping in Brazil, but most are small-scale in terms of investment, revenue generated, business size and employment provision. In developing countries, the small businesses in the informal sector collectively provide a large proportion of employment opportunities.

In the industrialized countries, including the United States, more and more entrepreneurs are harvesting mushrooms, medicinal plants and charging hunters, ecotourists and scientists fees for access to their private land.

Traditional timber-based jobs

Employment in a sector is shaped by consumer demand - what kinds of products consumers want and can afford, and other socio-economic factors such as distribution of wealth, average age of population and the role of exports in the national economy. The demand trends for sawnwood in developing countries differ substantially from those of the industrialized world. During the period from 1965 to 1985 when annual growth rates in sawnwood consumption (used for framing and house construction) were decreasing in developed countries, they were increasing in developing nations. This is due to fewer competitive substitute materials for sawnwood, rapid population growth rates and attendant unmet needs for construction in developing nations (Laarman and Sedjo, 1992). By contrast, developing nations' demand for wood-based panels and pulp and paper products grew at a much slower rate than that of the developed countries. Furthermore, the absolute consumption is also lower: Africa, the developing countries of Asia and the poorest regions of Latin America and the Caribbean basin consume an average of 3-10 kg of paper and paperboard per caput annually, compared with the United States annual consumption of 300 kg per caput. This means that the percentage of people working in high-end products such as pulp and paper production will be greater in wealthier countries. Conversely, employment in low-technology wood and wood products processing will be more common in developing nations.

The most common end use of wood determines the types of forest-based jobs available in a country. In developing countries, an average of 90 percent of all roundwood production is consumed domestically and a great proportion of that, almost 80 percent, is used for fuelwood (FAO, 1987). This has important employment implications because much of the employment ensuing from the fuelwood collection and marketing occurs in dispersed, rural markets which operate in the informal sector. Thus, the many people employed in these activities will not be reflected in official statistics.

Small-scale forest-based enterprises make significant contributions to rural employment

Despite these facts, encouraging developing countries to develop their forest industries is highly controversial. Critics argue that promoting timber industry on the basis of employment and economic benefits to the poor nation is false, as the collective employment directly attributable to formal sector forest industry is normally less than 1 percent of the total labour force in most developing countries (Repetto and Gillis, 1988). Another issue is the fact that many of the employment opportunities created by the development of forest industry in developing countries are often filled by imported or urban skilled labour, thereby reducing benefits to local populations. This is particularly true in the case of large-scale, high-technology industry. On the other hand, although the direct impact of large-scale industries may be limited in the surrounding rural area, the impact may be significant in terms of employment generation in related industrial sectors.

Employment opportunities in His pulp and paper sectors are concentrated In industrialized countries

Non-timber forest products and nature-based recreation

Data describing the economic and employment contributions of forests and forest industries typically focus on timber harvesting and processing, stemming from the widespread conviction that these activities provide the best economic rents among the alternative uses of forested land. This is being challenged now, and data quantifying alternative uses, notably NTFPs and non-extractive uses of forests such as nature tourism, are emerging, although still scant. Many are labour-intensive, creating full-time and seasonal jobs. Moreover, rapidly rising export revenues from NTFPs suggest that employment in this area has significant growth potential. For example, in the coastal areas of the American and Canadian Pacific Northwest, businesses involved in the harvesting and processing of greens for the floral industry were valued at nearly $130 million, in 1989, employing 10000 people in seasonal and permanent positions (Brooks, 1993).

With respect to the industrialized countries, NTFPs play a bigger role in many developing countries because of the greater population concentration in rural areas relying directly on forests. Typically, developing nations have fewer rural non-farm employment opportunities. Many developing countries, in recognition of the significant employment role of NTFPs, are actively developing the processing and manufacturing capacity of related industries. Overall, the role of NTFPs in developing nations' employment is significant and likely to grow [Ed. note: see the article on non-timber forest products by Tewari and Campbell].

In addition to NTFPs, nature-based tourism provides revenues and jobs in many countries. In the United States, recreation is one of the most important benefits supplied by forested land generating billions of dollars in revenue as well as jobs. In many developing countries, nature provides an important source of revenue (Laarman and Gregersen, 1994). While there is little quantitative data about the employment impacts of forest-based tourism, revenue figures suggest that this labour-intensive industry could create many jobs in developing countries [Ed. note: see also the article by Colvin]. However, the sustainability of both NTFPs and ecotourism is in question.

The informal sector

A discussion of forest-based employment would be incomplete without consideration of jobs in the informal sector. Relative to other types of enterprises, forest-based informal sector enterprises are a large provider of jobs. An extensive FAO survey showed that forest-based activities are one of the most common types of small enterprise, often comprising the highest percentage of small-scale enterprises in the rural sector of developing countries. In comparison with traditional, large-scale timber industries, the informal sector provides an equivalent or greater number of jobs in many developing countries (FAO, 1987). A 1984 study of the wood-processing sector in Lima, Peru concluded that the informal sector provided up to four times the number of jobs as did the formal furniture industry or twice that of the overall national wood industries sector for the whole country. During the economic downturn of 1965 to 1969, and again from 1980 to 1984, when the formal sector employment waned, numbers employed in the informal sector grew (FAO, 1987). In Jamaica, of all small-scale enterprises, forest-based businesses comprise 34.8 percent (FAO, 1987). The number of people employed in handicrafts is also significant; in India alone it is estimated that more than two million people are engaged in full-time craft production (Pye, 1988). In Nepal, the figure is 13 percent of the total workforce. Thus, the aggregate employment of small-scale forestry enterprises is often substantial (Laarman and Pedro, 1992).

Forest-based activities in the United States

Direct employment in the United States related to forest-based activities was more than 1.9 million as of 1990. This represents about 1.4 percent of United States employment in all sectors, providing $14 billion in wages and salaries (American Forest & Paper Association, 1995).

In most regions of the country, timber and other solid wood product industries rank in the top three industries in terms of net jobs generated (USDA Forest Service, 1990). This varies considerably regionally, depending on the amount of forested land and the degree of other types of industrial development.

In tandem with the growth in demand for more pulp and paper products in the United States (as compared with a slowing in demand for sawnwood and wood-based panels), the jobs associated with these industries comprise almost 30 percent of the total wood-based jobs. This is due to the scale of the operations and the overall number of firms in the sector, not to relative labour-intensity. In contrast to other timber industries, pulp and paper is capital-intensive, providing a large proportion of highly skilled jobs but, overall, providing fewer jobs (Contreras-Hermosilla and Gregersen, 1991).


Standard data for timber-related jobs do not include jobs in the labour-intensive milling and processing industries. Instead, these jobs are aggregated with other manufacturing data, including non-timber manufacturing such as steel, making it difficult to disaggregate timber-related jobs. Nevertheless, it is clear that the timber-related industries exert a powerful multiplier effect. For every job directly related to the private timber industry, jobs are created in other related industries such as transportation and marketing. One estimate suggests that, for every ten persons employed directly in modern, large-scale forestry enterprises, another eight jobs are created in related sectors (Contreras-Hermosilla and Gregersen, 1991). This would mean that beyond the 1.9 million direct, forest-based jobs in the United States private sector, there are usually an additional 1.5 million not accounted for. This adds up to almost 35 million people, or about 2.5 percent of the United States workforce excluding government employment. If federal employment figures are included, the numbers are even more impressive. A Forest Service analysis of combined private and government employment estimated that the National Forest System (NFS) generated 3.1 million jobs, 2.7 million of them in recreation and 98 200 in timber. In dollar terms the multiplier effect can be seen as well. The same analysis assessed $123 billion in 1993 to the NFS, almost 2 percent of the gross domestic product (USDA Forest Service, 1995).

Another factor resulting in an underestimation of forest-related jobs is that some income and employment related to small-scale activities, particularly those that operate on a cash or barter basis, are not included in standard data. In many developing countries, these activities are a significant portion of the total. Small-scale and informal forestry sector employment is discussed in greater detail below.

In terms of national economic health, the job intensity of forest-based industries is more meaningful if compared with other industry types. Overall, the relative job intensity of forest-based industries is greater than many other industry types, suggesting that investments in forest-based industry are effective in generating employment.

In addition to providing employment, forest-based informal sector enterprises transfer technology and skills to rural populations and form an essential part of a broader industrial continuum which includes large-scale sawmills and furniture plants. Furthermore, average salaries for forest-based labour are often higher than for other unskilled work, averaging approximately 50 percent more than those for agricultural labour (FAO, 1987).


A universal objective of public policy is to increase employment in view of its importance to a nation's productivity, rate of economic growth and social stability. Full employment enhances government revenue because it spreads the tax burden across the greatest possible number of people. Conversely, unemployment is often the starting point for the self-perpetuating cycle of poverty which entails an increased need for government to provide basic services to the poor (Mansfield, 1989).

A large number of jobs are provided by forests in the United States and also in many developing countries, particularly if the multiplier effect, NTFPs, recreation and the informal sector forest-based activities are taken into account. Many of the related activities are labour-intensive, maintaining rural employment Opportunities and diversifying local economies.

Forest sector employment opportunities related to recreation management are increasing in importance

Overall, forest-based activities, whether undertaken on a small or an industrial scale, are an integral part of the economic health and employment of forested nations. This argues for increasing attention and investments in forest-based industry to ensure the long-term viability of the world's forests. Collectively, the economic and employment benefits of industry founded on the principles of sustainable forest management make a compelling case for increasing investments in them.

However, the forestry sector is still lacking recognition of its employment-generating role in line with and proportionate to its actual importance. This is due to a lack of systematic attention to the employment dimension in forest sector statistics. Such statistics usually cover production and trade of timber and industrial products. Information on employment is very scarce and seldom reliable, comprehensive or up to date. This lack of attention to a major social impact of the sector's activities has a severe impact on its credibility among higher politicians and decision-makers engaged in resource allocation and investment. The image portrayed by the sector concerning the contribution of conservation and utilization activities is weak. This link between the two is clear only to informed persons within the sector itself. There is an urgent need for more systematic collection and analysis of the employment impact of forestry activities both to inform policy-makers and the public about the actual importance of the sector and to maximize employment-generation as economically viable in the development of forestry activities within the sector itself.


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