ELGIN — If the Boise Cascade plywood plant in Elgin closes this year, it could cost Eastern Oregon 446 jobs, nearly $21 million in labor income and more than $78 million in economic output within a year.
That’s according to an economic impact analysis conducted by the Eastern Oregon Center for Economic Information, a division of the Eastern Oregon University College of Business.
“The reason I wanted to do something on this is really just to bring people to the table so that they can figure something out, because it would be catastrophic for our region,” said Scott McConnell, an economics professor at EOU who led the forecasting project.
Boise Cascade announced it may close or reduce hours at the plywood plant in Elgin — which employs 230 people — after a permitting dispute with the Oregon Department of Environmental Quality over dioxin-contaminated wastewater broke out in late October 2020.
The EOCEI found the closure of the Elgin facility would have far-reaching effects across Eastern Oregon, but Union County would bear the brunt of the blow.
“Not only will the economic effects affect the lumber and plywood industry, but local area restaurants, schools and grocery stores will feel the economic impacts of this closure as well,” the report stated.
In the fallout of the mill’s closure, according to the analysis, 76% of the job and economic output losses would fall on Union County, particularly in Elgin. That comes to 339 jobs, almost $16 million in lost labor income, more than $59.6 million in lost economic output and about $79,600 in lost tax revenue at the county level.
But the effects of the Elgin plant’s closure would extend across the region. The analysis found that total losses in Union, Baker, Wallowa, Malheur, Umatilla, Grant and Harney counties would be 446 jobs, just shy of $21 million in labor income and almost $78.4 million in economic output.
McConnell said most of the additional losses would be felt in Umatilla County.
The commercial logging industry would lose 52 jobs as an indirect consequence of an Elgin mill shutdown, and another 14 would be lost in support activities for agriculture and forestry. Crop farming, truck transportation, hospitals, restaurants and even real estate also could lose jobs.
The report estimated that tax revenue across all affected counties would drop by more than $195,000 at the county level, more than $920,000 at the state level and almost $2.5 million at the federal level.
“This analysis shows that, along with the direct and indirect economic loss, there will be significant economic losses throughout the region due to the ‘multiplier’ effects of the lost incomes,” the report stated. “These effects will be felt by businesses of all types, primarily within Elgin, but throughout Union County and the greater region.”
Importantly, the analysis did not account fully for the effects of the COVID-19 pandemic. Using data from the second quarter of 2020, the EOCEI found the mill’s closure could yield even greater losses that were predicted in the analysis.
“There is evidence that the impact could be potentially greater with new COVID numbers,” said Cedric Riel, an EOU economics student who helped develop the analysis. “That’s a point of emphasis for me, is that this is developed off of 2018 economic data. With the new COVID data, there’s evidence that the indirect employment loss increased by a factor of 12.”
The COVID-19 pandemic did not reach its state of protracted severity in Union County until the fourth quarter of 2020, which suggests the pandemic could exacerbate the effects of the mill closure. Sarah Buddingh, another student who worked on the EOCEI analysis, agreed.
“The really scary thing is that it could be so much worse,” she said.