Study: Jobs, wages generally increase during wildfires

Study: Jobs, wages generally increase during wildfires

03 November 2012

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USA– The economic impact of this summer’s wildfires in Kittitas County might be more complicated than the picture painted by burned out houses and miles of blackened forests left behind.

Research released this summer by the University of Oregon’s Institute for a Sustainable Environment found that local employment and wages in rural counties generally increase during large wildfires as government agencies spend sometimes millions of dollars on suppression efforts.

The county was hit by two large fires in August and September. The Taylor Bridge Fire, which started Aug. 13, charred 23,500 acres between Cle Elum and Ellensburg and destroyed 61 homes. The Table Mountain Fire started Sept. 8 and burned more than 42,000 acres northwest of Ellensburg. The latter fire caused weeks of poor air quality in the county, which affected sporting events and outdoors activities.

So far, any evidence for or against an economic boost from the wildfires remains purely anecdotal, says Kittitas County Chamber of Commerce CEO Jim Armstrong.

Revenue collected from sales tax and lodging tax often is used to gauge local economic activity at any given time, and those totals are not usually available for three to four months, Armstrong said.

“We’re just curious to see what’s going to happen,” Armstrong said.

In Kittitas County, insurance companies have begun pumping millions of dollars into the county’s economy to help homeowners rebuild. Local contractors expect a slight increase in construction activity this spring.

Financial hit

Some businesses say they’ve taken a definite financial hit from the fires.

Marc Rich, a Realtor with Windemere and president of the Kittitas County Association of Realtors, called the fires, combined with restrictions on groundwater wells in the Upper County, a double whammy for the county’s real estate agents.

“In our office alone, we had multiple listings that were lost to the Taylor Bridge fire,” Rich said.

One of those properties was two days from closing when the house burned to the ground.

“If you’re selling a half million dollar property, and you have a commission check coming in, that commission check is gone,” Rich said of the situation.

Rich estimates the average property with a home in the Taylor Bridge burn area is worth between $400,000 and $600,000, and he thinks his office has about 50 properties in the area. Even properties where homes were saved could have lost 60 to 80 percent of their value, if all of the ground cover vegetation burned, Rich said.

“It was huge devastation for people who lost all of their vegetation,” Rich said.


Ellensburg State Farm insurance agent Scott Rollins estimates his firm alone reimbursed between $8 million and $10 million damage caused by the two fires. He thinks, countywide, insurance companies might have paid out as much as $40 million.

Home insurance policies generally cover fire damage, but a typical deductible for home insurance leaves a homeowner responsible for the first $1,000 in damage done to a house. So Rollins believes some homeowners may have dealt with small-scale fire damage, like smoke damage, without insurance claims.

“I’ve seen some devastation,” said Rollins, who once worked for State Farm as an adjuster during a hail storm in Dallas. “But as far as Central Washington, Ellensburg, Cle Elum, this was the biggest event we’ve had.”

State Farm handled about 40 to 45 claims for lost structures during this year’s fires, and about six claims involved completely destroyed homes. Claims for the completely destroyed homes averaged between $400,000 and $500,000, Rollins estimated. The smaller claims, he thinks, averaged about $15,000 each but varied greatly.

“The range is from very minor to they lost everything in the world,” Rollins said.

Rollins said that, despite the large dollar figures for damage, reimbursing clients during a disaster shouldn’t financially hurt an insurance company of any size.

State Farm sent additional employees to the area as soon as the Taylor Bridge Fire erupted, and by the second day of the blaze, the company had three full-time adjusters staying in local motel rooms.

Cleanup work started immediately after the fire, and most of the small jobs have already been completed. Rollins said it could take a year to get things back to normal for some homeowners.

Rollins predicts the insurance money and reconstruction work will provide a good boost to a building community that has been ailing.

“I hope even though the tragedy occurred we can make the best of it here and put some people back to work.”

The numbers

The county has, so far, lost about $7.13 million in property value from fire damage, according to Kittitas County Assessor Marsha Weyand. The assessor’s office is still collecting forms from property owners wishing to file for reductions in their property valuation due to fire damage.

Those numbers are separate from suppression costs, or what it cost to fight the fire. The Taylor Bridge Fire cost $9.9 million to suppress, according to an August report from the incident management team. The Table Mountain Fire cost $17.9 million suppression costs, according to the U.S. Forest Service.

The fires brought thousands of firefighters to Kittitas County from around the country. Fire camps were set up at Cle Elum-Roslyn High School, the Kittitas County Fairgrounds, the Swauk-Teanaway Grange and Rotary Park at different points in August and September. The yellow shirts of firefighters could be spotted convenience stores and gas stations, and local businesses were called on to help with laundry and other services.

The fires also resulted in widespread forest closures and weeks of poor air quality that took a toll on some tourism-related businesses.

“(Business) was non-existent basically for this season,” Nathanial Rowley, co-owner of Sahaptin Outfitters in Cle Elum, said of the summer and early fall weeks after the fires erupted. Research

A University of Oregon briefing paper focused on Yakima County’s 2008 Cold Springs Fire acknowledges that fires can be disruptive to families, workers and employers.

Cassandra Moseley, director of the Ecosystem Workforce Program at the University of Oregon’s Institute for a Sustainable Environment, notes that often employees can’t go to work while a wildfire is burning, especially if they work in the woods. She says industries like tourism can be especially hard hit.

In addition to the Cold Springs Fire, researchers at the University of Oregon studied more than 130 other fires that burned across the West between 2004 and 2008.

The researchers found that large fires also lead to more instability in local labor markets. In areas where the labor market already fluctuate with the season, fires usually lead to more dramatic fluctuations, Moseley said.

The portion of suppression money that is spent locally during firefighting also has an important impact on how a fire affects local economies, said Moseley.

U.S. Forest Service public affairs officer Roland Giller said the Table Mountain firefighting effort involved multiple agencies, making it more difficult to provide a detailed breakdown on spending. The Forest Service is waiting until spring to award many of the contracts for rehabilitation work in the Table Mountain Fire’s burn area. Washington Department of Natural Resources officials were not immediately available for comment regarding where suppression funds used to fight the Table Mountain Fire were spent, but that effort also was led by a multi-agency team.



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