Study says mining and tourism can and do work together

Mark Schill addresses the SME conference Wednesday.

A new study on the economic realities of mining and tourism jobs finds they both have value and can co-exist. Praxis Strategy Group, however, found that mining jobs remain the cornerstone of Northeastern Minnesota’s economy.

“Mining and tourism are so often positioned as adversaries,” said Frank Ongaro, Mining Minnesota executive director. “The results of the Praxis study confirm the Duluth-Arrowhead region depends heavily on success in both industries. Mining provides the high-paying industrial jobs we need, and tourism creates an appealing quality of life for both visitors and residents. 

Under no circumstances, however, can tourism jobs replace mining jobs, he said.

“The average annual salary for mining workers comes in around $81,500, well above the living wage guideline for a family of four in Northeastern Minnesota,” Ongaro noted. “These high-paying jobs improve quality of life for workers, giving them the opportunity to go out with their families and enjoy the outdoor amenities that make our region a great place to live.”

Regional leaders should create good jobs and prosperity, said Mark Schill, vice president of research for  Praxis.

“Mining does that directly and tourism contributes by helping to attract good talent, and that benefits all of us,” he said.

A recent study by Friends of the Boundary Waters Wilderness had similar findings, they said, stating “outdoor recreation and nature tourism is characterized by seasonal employment and tends to be associated with lower wages when compared to extractive industries, it can play avery complementaryrole in balanced regional development.”

The mining landscape supports tourists, Ongaro noted. There’s an off-highway vehicle park in Gilbert, the Mesabi Trail and bike trails. “Everything’s reclaimable,” he said. And Duluth’s shipping industry is “a tremendous tourist attraction,” Schill added.

The study examined the state of the Duluth-Arrowhead economy and reached some interesting conclusions:

  • Northeastern Minnesota’s economy has not kept pace with regional peers
  • Growth in both jobs and economic output has lagged
  • Per capita income in the region’s metropolitan counties is below the national average
  • High-quality, high-paying jobs increase the quality of life in the region
  • Without mining, Northeastern Minnesota would lose many jobs in healthcare, retail, government, construction and tourism

It’s critical to have industries like mining that infuse new money into the region, Schill said.

“The jobs multiplier for mining is 2.4. For tourism, it’s about 1.25. That doesn’t mean tourism isn’t important, but in economic terms, it’s just not a substitute,” he said.

“And without mining jobs, tourism becomes more difficult,” Ongaro added.

It’s important to note there is not an “us versus them” relationship between mining and tourism, said Kelsey Johnson, president of the Iron Mining Association of Minnesota. At times, however, mining opponents suggest it has a negative impact on tourism.

“When I talk with iron miners, they say they love to vacation in the Boundary Waters or go up the Gunflint Trail, and they have the means to do it. We need to unite behind a common message that this entire region is open to business and open to tourists and we’re welcoming,” Johnson said.

The Arrowhead faces stiff competition from other cities in the region, Schill said. 

“We’re getting beat by communities like Mankato, St. Cloud and Rochester. We’re right at the bottom. We need to do a better job of creating more small businesses. We have to do a better job of fostering entrepreneurship,” Johnson said. “We come from a background of assuming government that can create jobs when actually it’s business that creates jobs.”

The mining industry wants to contribute to economic growth, Ongaro said, and mining firms will invest here if they can make a profit.

“From our perspective, we have a great pie, and a solid slice of it is mining.  We have an opportunity to grow that pie – even double it. Why wouldn’t we,” he said.

“There just seems to be such a great opportunity to cooperate. This region just has so much potential. There are just so many competitive advantages we could be pursuing,” Schill said.

The region, defined in the study, includes the counties of Carlton, Cook, Douglas, Itasca, Koochiching, Lake and St. Louis. The Duluth-Arrowhead mining cluster employs about 5,100 workers and the tourism cluster about 6,400. The average annual salary is $81,500 for mining employees. Jobs in the tourism sector are often part-time or seasonal, averaging a salary of about $18,000 per year.