Current market conditions have led to very difficult times for many in the recycling industry. The substitution of recycled content for virgin material universally saves energy in the manufacturing process. Therefore, when energy prices are depressed, recycling’s value declines. The current strength of the dollar exacerbates the downward pressure on our commonly collected commodities. The outlook for the next few years does not present a promising picture.
What do we do? In the 1990s, there were stories in the press about warehouses of baled material that had no buyers. This is not the case today. Industry has built a manufacturing base that consumes all we collect and would like to have more. Prices are lower, but demand still exists.
The value of recycling is far greater than the price paid for the bale. Indeed, the recycling industrial community employs tens of thousands, purchases capital and supplies for operations, and puts consumer goods and packaging back into the marketplace.
“That recycling is beneficial for the environment is probably an uncontested proposition,” says Frank Hefner, a professor in the College of Charleston’s Department of Economics and Finance. “What is becoming increasingly more obvious is that recycling contributes to economic health.”
Economic ripple effect
The positive impact driven by the material in the bin goes beyond the jobs and expenditures created from these companies buying the bales from materials recovery facilities (MRFs). The suppliers of goods and services to them generates many indirect jobs in addition to the jobs resulting directly from recycling material demand.
Further, there is a ripple effect when those employees in the direct and indirect jobs spend their income, the money turns over in the economy again and again, spurring more economic activity and greater job growth.
Hefner of the College of Charleston has evaluated the impact of recycling in South Carolina, calculating the direct, indirect and induced jobs in the Palmetto State. In his report, he cites that the South Carolina recycling industry has grown from 340 companies in 2006 to more than 520 companies in 2014. He attributes 22,403 South Carolina jobs to recycling.
The Southeast Recycling Development Council recently engaged Hefner to perform similar work as part of the group’s work in developing a comprehensive and tactical report focused on Alabama, called “A Plan for Boosting Residential Material Recovery and Recycling in Alabama.” In this report, Hefner calculated a similar number of jobs that are attributed to the total impacts of recycling. Recycling is putting people to work and continues to do so.
So we find ourselves at a crossroads. Our MRFs are not receiving sufficient sales revenue to cover operational and depreciation costs, and collection costs strain already tight municipal budgets. But we need the material – industry is depending on urban mining, and businesses are creating jobs in the process.
Finding a solution for all parties
The process of recycling can be boiled down to simple terms. The consumer leaves his or her cart of material on the curb and the city takes possession. From there, the paper and containers soon transition from public hands to private, corporate ownership. It’s not exactly like trying to get the Hatfields and McCoys to work together, but it does involve two sectors driven by very different interests.
The challenge we face is to find the adjustments to the value chain of material that will keep feeding and growing the economic machine we have developed. All parties win when we find the solution – and it won’t hurt the environment either.
Will Sagar is executive director of the Southeast Recycling Development Council. He can be contacted at [email protected].
The views and opinions expressed are those of the author and do not imply endorsement by Resource Recycling, Inc. If you have a subject you wish to cover in a future Op-Ed, please send a short proposal to [email protected] for consideration.