Economy hits recycling industry

Recycling is a $3 billion industry that provides 20,000 jobs in Minnesota. The market for recycled materials, however, has slowed considerably in the past few months in response to the economic downturn. Recycled plastics, aluminum, scrap metal and paper have declined 50 to 75 percent in value. Wayne Gjerde, recycling market development coordinator for the Minnesota Pollution Control Agency, said demand for recycled material skyrocketed in 2008 as China stockpiled material for the Olympic Games. The demand ended âÄúalmost overnight,âÄù however, as Chinese markets pulled out to utilize the high-priced raw materials purchased before the market dropped, he said. But China is slowly coming back into the market. Gjerde said ChinaâÄôs small supply of lumber will leave them looking for recycled paper supplies again soon. In response to the market decline, some recycling companies have had to reduce employee hours and temporarily lay off employees. Others are stockpiling materials until there is more demand. Julie Ketchum, director of Government Affairs for Waste Management of Minnesota, said drops in the value of recyclable material happens to the recycling industry periodically, but this year is one of the biggest the Minnesota industry has ever faced. Waste Management is stockpiling materials until the prices come back up, but they can only do that for a certain period of time with certain products, she said. Newspaper, for example, itâÄôs not as durable as aluminum and plastic, and canâÄôt sit in a warehouse for a long time. âÄúItâÄôs been a huge impact on our company nationwide,âÄù she said. Compared to markets on the coasts, MinnesotaâÄôs recycling industry is not being hit as hard by the loss of Chinese markets, because itâÄôs not as dependent on export markets due to an emphasis on local use, Gjerde said. âÄúAll West Coast companies did was export,âÄù Gjerde said. âÄúThatâÄôs never been our philosophy here in Minnesota. Now is the time when [our] philosophy pays off.âÄù Minnesota state law mandates that materials collected to be recycled cannot be thrown out . But for most materials, recycling makes economic sense, Jeffrey Schneider, recycling coordinator with the Minnesota Pollution Control Agency, said. Incinerating 10,000 tons of waste creates one job, while recycling the same amount creates 36 jobs, according to the MPCA website. âÄúA large portion of our economy is based upon the recycling markets now,âÄù he said. âÄúWe have built the infrastructure and there is a market out there that depends on the material supplied by recyclers; we canâÄôt drop out as soon as the prices fall off.âÄù Dana Donatucci, recycling coordinator for Facilities Management at the University of Minnesota, said the University has not been impacted as much as other markets by the economy. âÄúTypically what I try to do in the past is budget for low revenue periods so we are not hit with a budget shortfall,âÄù he said. Although he was prepared for a downturn, Donatucci said it âÄústill hurts.âÄù In the long term, pricing for recyclables is expected to increase along with the rest of the economy, Gjerde said. Experts say the key is to keep recycling, not just for the economy, but for the original goals of sustainability. âÄúItâÄôs important to remember that when recycling first started, people didnâÄôt recycle because there was an economic gain, they did it because there were environmental concerns,âÄù Schneider said.