*Comprised of the following labor market areas Juneau, Ketchikan, Lynn Canal Icy Straits, Prince of Wales, Sitka and Wrangell Petersburg.

EXHIBIT F

INTRODUCTION

The purpose of this analysis is to assess the significance of changes in the annual rate of harvest of trees from the Tongass ilational Forest. A change in the rate of harvest will affect, most significantly, the employment, and the wages and salaries earned by that employment, in the timber management, logging, and wood processing industries in Southeastern Alaska. 1/ The respending pattern of those wages and salaries will affect employment of other Southeastern Alaska residents. The former effect will be called the direct effect, the latter the indirect effect; together they constitute our first order approximation of the significance of the forest products industry to the residents of Southeastern Alaska.

Assuming that the average level of employment per unit of harvest approximates the marginal rate of employment per unit of harvest, then average employment and wage and salary data for the various industries will be aggregated and indexed by the rate of harvest for a representative year. Cyclic and secular trends in the rate of harvest and in the level of employment necessitate the thoughtful selection of a representative year, while time, data, and money constraints prohibit a very detailed analysis. With these considerations in mind, 1974 was selected as the representative year. As uniformly as possible, data depicting the volume of the timber harvested from Southeast Alaskan lands in 1974 and the 1974 employment and wages and salaries attributable to that timber harvest will be compiled and Summarized.

In some instances, data are available only for the fiscal year 1975, it will be identified as such. The U. S. Forest Service and the Alaska State Department of Labor are the primary sources of the employment and wage and salary data. Any identifiable employee of a firm which is directly involved in some seguent of the timber products industry will be included in this analysis. However, employment may be estimated by an apportionment procedure if only a portion of the industries' or agency's employment is attributable to timber managing, harvesting or processing activities.

U.S. Forest Service

2/

Employment in the timber management industry is almost entirely restricted to the U.S. Forest Service, the Forest Service also being the institution managing the harvestable trees in question, as well as the lands upon which the trees grow. Since Forest Service personnel are employed to manage resources other than trees, Forest Service personnel and their wages and salaries, will be apportioned to a timber management category on the basis of ratio of expenditures for timber management activities to total expenditures. Expenditure categories will be segregated according to their functional descriptions. 3/ Regional office personnel, assigned to Juneau but spending a portion of their time ministering to the needs of the Chugach National Forest, are apportioned to the Tongass ¡lational forest on the basis of the ratio of the Tongass area office expenditures to Regional Area Office expenditures. All Forest Service expenditure and wage and salary data are for fiscal year 1975; and in order to ensure that Forest Service wage and salary data is comparable to the other wage and salary data, the forest Service data will be adjusted for general price changes through the use of Anchorage consumer price index (the index is used to adjust for the price changes which are captured by the data during the first six months of 1975).