Taking note of the paper industry - Industry Overview

Monthly Labor Review, Sept, 1997 by Cynthia Engel

Consumer participation in recycling, improvements in technology, increased consumption of paper products, and liberalization of international trade together have had an enormous influence on employment on paper-related industries

Paper is an indispensable component in the production, packaging and delivery of a wide variety of products used daily by most Americans. For many it begins with breakfast. Most of us would be lost without our newspaper, coffee filters, napkins, cereal boxes, and milk and juice cartons. In some cases, our entire breakfast is baked, sold, reheated, and served in its original paperboard box.

Americans consume more paper than do the citizens of most countries. Compared with the 1994 world average of 97 pounds, the U.S. per capita consumption of paper is more than 700 pounds, approximately 2 pounds per person per day. Per capita consumption of paper products in the United States has grown 43 percent since 1980.(1)

Steady increases in paper consumption have had divergent impacts on employment in manufacturing production, in wholesale trade distribution, and in recycling collection. Employment in paper manufacturing, which historically has been volatile, has fluctuated less in recent years. Employment gains have been elusive, however, and 16,000 jobs have been lost, on net, since 1990.(2) At the same time, employment in recycling collection and paper distribution reflects a steady and increasing rate of growth. Increases in these jobs in recent history have far outweighed employment declines in paper manufacturing.

Employment is driven in part by changing regulations and consumer demands. New government regulations and an environmentally conscious population have required industry to use more recycled waste and to produce fewer contaminants in production. These changes have led to costly, but necessary, investments in new equipment. Improvements have been implemented with state-of-the-art technology, resulting in less labor-intensive employment. While increased productivity within paper manufacturing has allowed output to grow even in times when employment has not, recycling and exports have buoyed employment in the paper-related industries.

This article examines the changing market for paper, including the demand for recycled products and exports, and its effect on employment trends.

Types of paper

Paper manufacturers produce both paper and paperboard products. The designation "paper industry" generally refers to the production of both products. Paperboard is used to make items for the packaging of products, such as cardboard boxes, shipping containers for produce, and appliance containers. "Paper" may also identify the subgroup of products that excludes paperboard, such as newspaper, catalog paper, bond paper, tissue paper, and computer paper. In this article, the term will be used to identify the broader group, including both paper and paperboard products.

Paper products are classified according to content. Products with recycled content contain various amounts of recycled paper, with the balance made up of mill scraps, which often include virgin fiber. Other paper products contain only virgin fiber. To extract the cellulose, which makes up less than half of wood fiber,(3) lignin and other substances are removed. The remaining cellulose is then bleached, beaten, and rinsed, resulting in a pulp to be used for papermaking.

Recycling plants must purchase wastepaper rather than wood, repulp the fiber, and feed the pulp into an ink removal system. At this point, both virgin and recovered pulp go through the same processes.(4) The labor requirements for producing recycled fiber are similar to those for producing virgin fiber, although total costs of recycling are approximately 20 percent less.(5) Production using recycled paper takes less energy than production using virgin paper.(6)

The profitability of recycled products has caused some companies to replace pulp mills with deinking plants and to expand their use of recovered paper in existing mills. Companies are increasing domestic recycling capacity, as worldwide demand for recovered paper is expected to rise to 150 million tons by the year 2000, up from 110 million tons in 1993.(7)

Where the jobs are

Paper-related employment is scattered among several industry categories. The largest block of workers is involved in the manufacture of paper and allied products,(8) which employs 681,000, down slightly from its peak employment of 697,000 in 1990. The second-largest category of paper-related employment is in the paper and paper products component of wholesale trade, where 259,000 are employed in the distribution of paper products. Not included in the 259,000 are another 130,000 jobs in recycling activities undertaken by scrap material brokers and dealers, also found in wholesale trade. While a significant portion of these jobs are directly tied to paper recycling, others support metal or other material recycling. Scrap material brokers contract with those who actually collect wastepaper, these companies are primarily found in the refuse component of sanitary services (some portion of 156,000 jobs). This list does not exhaust all the remaining jobs that are hidden among the various categories of the Standard Industrial Classification structure: those employed in government transportation services, and those who produce the new equipment, chemicals, and processes to be used in the mills. However, when adding up an abbreviated list of categories, we find well over 1 million jobs supporting the consumption and production of paper in the United States.