This article is from the State of the Industry: Economic Outlook and Impact Study with Presentation of the ISRI Design for Recycling Award session during ISRI2021. If you would like to watch this session in its entirety, you can still register for ISRI2021 here. This session, along with others, are available to attendees on demand.
On Earth Day, Thursday, April 22, President Joe Biden pledged to cut U.S. greenhouse gas pollution in half by 2030. The Department of Labor released its weekly report on new jobless claims, showing 547,000 versus 610,000 expected for the week ending April 17. ISRI2021 celebrated the recycling industry’s economic power and environmental benefits with preliminary data from the 2021 U.S. Scrap Industry Economic Impact Study.
John Dunham & Associates (JDA) compiled the data for ISRI showing the U.S. recycling industry contributes $116 billion in economic output to the national economy. In a discussion at ISRI2021 moderated by Brian Shine, president of Manitoba Corp. and past ISRI chairman, Dunham, with fellow presenter Jason Schenker, president of Prestige Economics LLC, discussed the economic possibilities for recyclers. “All told, your industry creates half a million jobs,” Dunham says. “It’s a big, big industry.”
Recycling’s Positive Impact
The industry’s nearly 160,000 full-time workers earn more than $12 billion in wages, and the industry’s direct economic impact in the U.S. is as much as $46 billion. The industry indirectly supports nearly 347,000 jobs through suppliers and services. “There’s no heroic assumptions being made; all of this is open architecture,” Dunham says of the study. “You can actually trace a job from a facility location all the way through the impact study. Our guys spend a lot of time looking at your facilities: looking at your overheads; looking at your websites; calculating all the jobs you have there and everything you do.”
Tools for Recyclers
The ISRI study provides data on how many ancillary jobs your firm — and the industry — creates in a community. Individual reports for economic development purposes can be created for a firm or a specific impact application quickly and inexpensively. “This data is really good for informing stakeholders; for developing partnerships; for making business decisions; and for community and government relations,” Dunham says.
The study can help corporate planning in many ways. ISRI’s study has:
- A geocoded database of plant locations you can use to decide where to build a new plant or to determine plant service geographies.
- Detailed data on the number and scope of businesses by type and size. This helps determine potential customer locations or customer service areas.
- Information on average (industry level) employment costs and productivity at the state level.
- Details on average tax payments, cost of goods sold, machinery use, and variable costs by commodity by state.
Dunham notes you can use the data to communicate the importance of the industry with your community, other businesses, lawmakers, and the media. “Telling [your firm’s story] helps you work with myriad kinds of issues that you might have. It could be NIMBY (Not In My Backyard) issues that you’re dealing with. It could be important local decisions about traffic planning, like putting a stoplight outside your facility, Dunham says.
The impact analysis identifies linkages among your firm, your segment of the industry, and over 500 different industries throughout the country, Dunham notes. Knowing where your allies are can help during public policy or public affairs issues — it’s always better to have friends with you.
Post-COVID Outlook
Like all industries, 2020 was a rough year for recyclers. According to JDA, recycling jobs fell about 3% since the 2019 analysis. The firm gathered baseline data in January 2021, so the economy was experiencing the effects of the COVID-19 shutdowns. JDA identified about 170 recycling facilities that closed in 2020.
Schenker says the general trend for the rest of 2021 is for global economies to recover some of the 2020 losses, with China, India, and Southeast Asian countries demanding more raw materials. The U.S. economic recovery still is not complete.
The Labor Department’s published unemployment rate is 6%. Prestige puts it in the upper 8% ranges. During the past 57 weeks, U.S. workers filed 80 million first-time jobless claims, and about 2 million are collecting unemployment benefits, so the actual unemployment rate could be 11%. Teleworking remains high among high-wage earners, and working from home as a pandemic-era trend could set off a war for talent among competing industries. “Companies in higher-cost areas are trying to scoop up people from lower-cost areas, and not even requiring them to move [to the high-cost area],” Schenker says. “In Austin, Texas, we’ve had companies in California trying to steal talent.”
Consumer inflation remains low, but asset inflation remains at the beck and call of commodity prices, and the global shipping backups. More uncertainly comes as the U.S. stares down its $28 trillion debt, and the effects of “helicopter money,” the Congressionally approved COVID-19 stimuli and the Biden administration’s proposed $2 trillion infrastructure and jobs plan; and the projected insolvency of Social Security by 2035. Real estate prices remain at record highs in all markets.
You can depend on the U.S. dollar, Schenker says. “You really can’t have a world that operates at bitcoin speed; it just isn’t fast enough. I think the dollar is going to be important for a long time to come,” he says. Whether Uncle Sam will let you keep all that green is another story: Schenker predicts taxes — corporate, income, payroll, and more — may rise when U.S. politics catch up to federal spending policy.
Sessions for Success
Week Two of ISRI 2021 will feature presentations on diversity; environmental justice; government policy; global economics; and more — all designed to give you an edge in business. “As the industry is gathered virtually for our ISRI2021 annual convention this year, we are proud to celebrate how recycling plays an essential role in not only our environment, but also in the U.S. and global economies,” ISRI President Robin Wiener says. “As the world recovers from a global pandemic, the resilience of the recycling industry once again shines through with a total economic output that is up 6.4% compared with pre-pandemic levels.”
