Study traces impact of Potlatch plant closing
A new study lists $40.3 million in lost revenue, including taxes, related to Potlatch's sale of its printing papers division.
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The Paper, Allied-Industrial, Chemical, Energy Union released the study Monday during a noon meeting at Brainerd City Hall. PACE represents paper workers in Brainerd and Cloquet.
Dick Blin, special projects specialist for the national union, said Potlatch severance package of full pay for 26 weeks after the mill closed will conclude in mid-November. Blin said the study was based on thorough research and it looked at the area job market data for Crow Wing, Aitkin and Carlton counties.
Looking at overtime, premium pay and wages, the study found the average annual paper mill salary in Brainerd and Cloquet was $49,037. That salary was expected to decrease to $31,368 in the first year after the mill's closing, including severance pay and jobless benefits. In the second year after workers left the mill, the paper worker was expected to make a yearly salary of $25,101, nearly a 50 percent cut from earnings while in the Potlatch mill, the study reported.
"I don't think Brainerd has felt the impact and they won't until February," said Ken Zelinske, retired Potlatch employee and Local 164 union president. Bob Harting, Local 79 union president, also noted the effects of union meeting spending, including $20,000 a year or more for meetings at area resorts and another $10,000 spent annually for gatherings at the Moose club. Union leaders also had concerns for people now going without medical benefits.
Brady Nelson, PACE local union president from Cloquet, listened to Brainerd Mayor James Wallin at a meeting, which announced new study findings about the economic effect of closing the Potlatch Brainerd mill.
Blin said the message was to hold the line on union negotiations in Cloquet and to support the state's efforts to remove the non-compete clause from the Brainerd mill.
The study reported beyond the laid-off workers who did not seek retirement, about 829 between the two mills, another 1,215 jobs were expected to be lost in the ripple effect for a total job loss of 2,044 in lost jobs in the three study counties.
The study looked at layoffs and proposed pay cuts by Sappi Limited in Brainerd and Cloquet and measured wage and revenue shortfalls during the next two years. The study, done by the Chicago-based Center for Labor and Community Research, showed a combined tax loss of $36.5 million to date and predicts another $3.8 million in tax losses if current cuts to workers and loggers in Cloquet remain in place.
The study reported the layoffs will cost local, state and federal government $27.2 million in tax revenue, $9.3 million in unemployment benefits for a total cost to government of $36.5 million.
The data combined the 616 jobs lost in Brainerd and hourly and salary layoffs for 280 workers in Cloquet. The study used statistics from the census, Department of Labor Bureau of Labor Statistics, Minnesota Department of Economic Security, Minnesota WorkForce Center in Brainerd and area job market guides for Crow Wing, Aitkin and Carlton counties by the Minnesota Implan Group in forecasting community tax base drops and ripple effects.
PACE union representatives from Sappi mills in Michigan and Maine attended the meeting. Skip Hodgdon, Local 9 from Skowhegan, Maine, said he found he had a neighbor in Maine from Brainerd, proving again how small the world is. Hodgdon said he was in Brainerd to show the members elsewhere are concerned with what happens here. They were bringing negotiating experience from mills that Sappi purchased earlier.
"It also sends a message to Sappi," said Steve Keglovitz, union president in a Sappi mill in Muskegon, Mich. "We are disappointed in their tactics. There is no reason they can't let another employer in here. ... Businesses watch out for each other's back and the unions have to do the same."