The Institute of Scrap Recycling Industries’ (ISRI) recently completed jobs study analysis concluded the U.S. scrap recycling industry is a major economic engine that supports 471,587 jobs. In addition, the study determined the recycling industry generates $11.2 billion in tax revenues for governments across the country and a total, positive economic impact of over $105.8 billion (2013).
This study demonstrates the recycling industry’s ability – clearly, recycling is more than a sub-tier of the waste industry. And as the recycling industry continues to grow, the need for separation from the waste disposal industry must happen.
The North American Industry Classification System (NAICS) is the standard used by federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing and publishing data related to the U.S. business economy. With specific NAICS codes developed for recycling and the underlying sectors of the industry, such as composting and reuse, the recycling industry would finally be recognized as the strong industry it is.
Stuck in the shadow of waste
Today, there are just a few NAICS codes related to recycling, but those fall under the main industry code of waste disposal. In the waste sphere, 71 separate NAICS codes exist, according to census.gov. For comparison, there are 412 codes assigned to the construction sector and 197 in automotive.
Of those 71 waste codes, only four are specific to recycling. These include codes for recycling dry cleaning fluids, degreasing solvents, wash water and inkjet cartridges. No codes exist for either composting or reuse.
How could the development of more recycling-specific codes help lift materials recovery as a whole? One important element is that such codes could open up tax incentives and other critical funding mechanisms.
Currently, the NAICS system is used by the federal government to make decisions on where tax monies go or where to devote resources for growth in specific areas of the country. Without a system like NAICS, there would be no means of collecting, analyzing or publishing statistical data for each sector within each industry. Due to the lack of representation of recycling within the coding system, recycling’s impact to the country isn’t given its full due and is missing out on valuable assistance.
For example, the growth and maturity of the industry has led to thousands of new recycling jobs, a fact that means we need bolstered infrastructure around job training and development. Job growth can be supported by updated curriculum in our educational institutions (allowing students to learn about the industry earlier), as well as standardization throughout the industry so that industry workers can move from one job to another without the need for major retraining.
In addition, there is the need to provide strong opportunities for entrepreneurs and others to enter the industry and develop these new jobs. These opportunities may come in the form of tax incentives, job grants, low interest loans and more. All of this can be possible if governments understand the value of these new businesses in a growing industry identified by the NAICS codes.
The regulatory repercussions
New laws and regulations can of course be both positive and negative for the industry. Landfill bans, mandatory recycling and deposit legislation are examples of laws that have pushed recycling activities in locales across the county. New processes are being developed to take items from the waste stream and turn them into valuable commodities. The ability to recycle, reuse, repair, compost or harness other value-added technologies generates more investments, more jobs and more taxes.
The industry must be given the credit for these taxes and economic impact on the U.S. economy. By using NAICS codes, it would be easier to identify, survey and mobilize recycling industries to advocate for consistent, beneficial and fair laws and regulations, from state to state and region to region.
Unfortunately, the fact that the NAICS system is in place does not necessarily mean there is coverage for every type of business or even every sector within the country. There is a disconnect between our ever-changing world of technologies and advancements in industries like recycling.
The lack of proper identification of jobs, revenue and taxes, for the recycling industry by the NAICS system is hurting the industry as a whole by not properly identifying the expanse and diversity of the recycling industry.
The National Recycling Coalition’s Jobs Task Force is working to change this, and we invite you to join us in this effort.
Gary Bilbro is a board member of the National Recycling Coalition and is co-chair of the organization’s Recycling Jobs Task Force.
The National Recycling Coalition (NRC) is North America’s leading nonprofit organization on issues of waste reduction, reuse, recycling, composting and buying recycled products. The NRC can’t do this important work without you – please consider supporting the organization with a tax-deductible donation of any size. Donate to help move recycling forward.
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@example.com for consideration.