A 10 percent increase in mining activity would benefit the Duluth-Arrowhead region more than three times as much than a similar tourism boost, according to a new study by the Praxis Strategy Group.
The study, sponsored by advocacy group MiningMinnesota, concluded a 10 percent increase in mining would create 567 new jobs compared to 161 in the tourism-impacted areas. Average earnings in those created jobs would average out to $66,300 in mining and $25,000 in tourism.
“The results of the Praxis study confirm that the Duluth-Arrowhead region depends heavily on the success of both industries,” said Frank Ongaro, executive director of MiningMinnesota. “Mining provides the high-paying industrial jobs we need and tourism creates an appealing quality of life for both visitors and residents.”
Mark Schill, Praxis vice president and the study’s author, called it a tangible look at how the sectors impact the region independently. Schill’s background is in economic and regional development, and he said in an interview Wednesday the study is more proof the industries need to coexist for the area’s betterment.
“It’s helpful to view this in the context of what’s best for the region’s residents,” Schill said, adding the signature mix of industry and tourism puts the Duluth-Arrowhead at a competitive advantage. “This back and forth isn’t helping.”
The study comes at a time when mining and tourism divisions are at an all-time high over two proposed copper-nickel mines in northeastern Minnesota. Twin Metals, an underground conceptual project near Ely, is at the heart of that division, pitting mining advocates against environmental groups claiming the mine could irreparably harm the Boundary Waters.
The Praxis study, and a February study sponsored by environmental groups, show two industries contributing to the local economy, but Schill said the sheer comparable numbers point to mining as the cornerstone.
Without mining, the Praxis study says, the region would potentially be without 9,446 jobs at an average wage of $68,444. He includes in those numbers more than 5,100 direct mining industry jobs, and hundreds more in health care, retail, government, construction and other spin-off industries.
Combined, he added, those jobs created $646 million in earning and $183 million in tax revenue.
The study found current iron ore mining and related industries employ 5,140 people earning $419 million annually, when all of the region’s operations are open and running. That compares to about 6,400 direct tourism jobs that total $116 million in earnings annually.
The mining jobs average more than four times the annual pay of the average tourism job, the study found.
And having industry similar to mining, those in the business of exporting product, can help the Duluth-Arrowhead region’s wages increase and its industry diversify. Currently, Schill said, the national wage average is about $47,000. Northeastern Minnesota is about $40,000.
“Duluth is lagging,” he said. “There’s a lot of assets here, there’s a lot of potential for growth.”
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