Recycling often is considered a necessary evil, something municipalities are required, or even forced, to do — despite limited resources and funds for such efforts. Recycling programs may make residents feel warm and fuzzy inside, but it usually costs big bucks.
Ohio, however, has used recycling to create revenue and jobs.
“Recycling is Ohio's third-largest industry,” says Donna Stusek, research and market development administrator for the Ohio Department of Natural Resources (ODNR), Division of Recycling & Litter prevention. “That's behind [No. 1] automakers and metal-fabrication, the second-largest industry.”
In fact, recycling in Ohio is a billion-dollar success story, according to a recent report, “Ohio Recycling Economic Information Study,” issued by ODNR. The industry generates $22.5 billion in direct sales annually, employs more than 100,000 people and accounts for $650.6 million in state tax revenues.
The report, authorized by ODNR's Division of Recycling & Litter Prevention in partnership with the U.S. Environmental Protection Agency (EPA), Washington, D.C., and the National Recycling Coalition (NRC), Alexandria, Va., evaluates the economic impact of Ohio's recycling industry and supporting businesses. It will be included in a national recycling economic impact profile currently being developed by the NRC.
The study assesses Ohio businesses involved in recycling collections, processing and manufacturing products with recycled materials. Authors looked at 26 recycling and reuse business categories identified through the North American Industry Classification System (NAICS). They analyzed recycling's direct economic affect on these industries and estimated the indirect and induced impacts, as well as government revenues, derived from the recycling and reuse industries.
Among states completing the study, Ohio leads in both employment and sales derived from the industry. Of the state's workforce, 4.3 percent are involved in recycling, which far exceeds neighboring states Indiana, Pennsylvania and New York.
According to the report, 3,177 Ohio businesses are directly involved in recycling activities while another 133 indirectly support it. More than 98,000 Ohioans work directly in the recycling industry, sorting recyclables, operating machinery and manufacturing end-products. And 3,800 support their activities as accountants, attorneys, consultants and manufacturers.
Industry workers earn a combined annual payroll of $3.6 billion, with an additional $60 million going to employees in supporting businesses. Salaries earned by recycling workers average $36,600, which is higher than salaries of nearby states. Also, Ohio's recycling industry's average wage is $8,000 more than the state's average wage.
Approximately 3.7 percent of Ohio's gross state product is attributable to the recycling and reuse industry, with 1.8 percent provided directly by the industry. A majority of the economic activity for the recycling and reuse industries is accounted for by: recyclable material wholesalers; plastics converters; steel mills; and iron and steel foundries. These four categories alone represent 61 percent of all employees, 70 percent of wages and 74 percent of total receipts.
There is a clear distinction between the recycling and reuse sectors regarding company size and average annual payroll. Recycling businesses average 46 employees each, with an approximate annual payroll of $39,000 per employee. Comparatively, the reuse sector is smaller with an average of 7 employees per company and an average annual payroll of $17,000 per employee. Although the reuse and remanufacturing sector makes up 38 percent of total establishments, it comprises of only 9 percent of total employees, 4 percent of payroll and 4 percent of receipts. Together, these direct and indirect recycling businesses generate $490.85 million in state taxes, $89.28 million in fees and $70.47 million in miscellaneous revenues, totaling $650.6 million in state revenues.
Ohio's towns, municipalities and counties are doing an excellent job of recycling, but industry actually is a big key to its recycling program's success, Stusek says.
“Ohio is known for its strong industries [that have] learned to take care of [themselves], whether it's waste reduction or recycling at the end of their processes, taking scrap materials and putting it right back into their stream,” she says. “We also are supporting industry with our recycling market development grant and really pushing … recycling across the state.”
Ohio also operates a strong material exchange program, known as Ohio Material Exchange (OMEX), which Stusek says the industry is using more frequently to sell and buy secondary materials from other industries. ODNR knows it can extract more from the waste stream, but its message is being heard, and businesses are doing a good job of getting materials to market.
In the past five years, according to Stusek, ODNR has pushed to keep materials in Ohio and, more specifically, return the materials to those industries the state has awarded grant dollars to help succeed.
“We're trying to close our own loop in Ohio,” she says. “It's nice because those industries now are doing some retooling and product development to incorporate post-consumer materials. … The more post-consumer materials they can take, the better off the state will be.”
Despite Ohio's lack of state-mandated recycling requirements, the state has accomplished much.
“We just keep pushing the fact that we've got to recycle,” Stusek says. “We're looking more at the message that it is good for the economy — it does provide jobs … — rather than that warm, wonderful feeling … we're all supposed to have when we recycle. We're trying to find different ways to get the message out that recycling is a viable industry and needs everybody's participation.”
To read the economic impact study of Ohio's recycling industry, visit www.dnr.state.oh.us/odnr/recycling.