After the Company Leaves: The Long Term Impact of Job Creation Economics

McNary Arizona is a community marooned by the changing tides of economic growth and shares many attributes with other company towns abandoned by extraction industries after the wealth has been removed.

Located on the White Mountain Apache Reservation and split between Apache and Navajo counties, McNary is the second highest community in Arizona at 7,316 feet. Elk and Bear mix with cattle in the fields and forest surrounding the community. In some places, the wilderness is over taking the collapsing infrastructure of past enterprise. Here, community renovation projects dim beneath angst-ridden graffiti, an all-too-common characteristic of old company towns from Appalachia to the North-West.

Community members fondly remember a period of postwar prosperity when McNary was a booming lumber town with a movie theater, roller rink, and a state champion basketball team.   The boom was not to last.  A major factor in the collapse of the local economy was the advent of plastic and cardboard. The local mill serviced the pine wood packaging industry, and when a fire damaged the mill in 1979, the owners shifted remaining operations to Flagstaff, to take advantage of its more technologically advanced operations and its access to national rail and highway systems.

Today, the estimated per capita income hovers around $13,000 with 84% of the population living below the poverty line, including 96.6% of those under the age of 18 and 100% of those age 65 or over. In 2104, economic reports indicate that the unemployment rate was 15.9% compared to a national average of 6.9%. McNary has experienced negative job growth in the last decade with a 2.65% decrease in the last year.

The town of McNary has gone through several names in the last 200 years. The Apache name for the region is Chaabito. In the late 1800’s the town was named Cluff Cienega for a mormon Bishop, it was changed in 1919 to Cooley who had been a famed army scout and then again in 1923 when it was renamed at the behest of the Cadey Lumber company relocating from McNary Louisiana. The company moved west after depleting the yellow pine forest of the South East. The company relocated its largely African American workforce to Arizona town after leaving behind the virtual ghost town they created of McNary down south in Louisiana.

The Cadey Lumber company leased the land from the Bureau of Indian Affairs as well as obtained the logging rights for National Forest land extending almost to Flagstaff. The company made an initial 3.5 million dollar investment in the construction of an electrical plant, sawmill and railroad service.

McNary grew as a typical company town, with Cadey owning and operating the town infrastructure as well as most of the commercial and public services. The workforce was divided between African American, Native American, Anglo and Hispanic groups which remained segregated through much of McNary’s history as a company town.

James McNary, one of two partners that brought the lumber business West, planned to accumulate vast wealth and retire a “man of leisure.” He was a contributor to Republican politicians and friends with Presidents Harding, Coolidge and Hoover. In 1956, he published his memoirs entitled, This is My Life.

Since the 1970s, the milling industry has become increasingly mechanized with industry consolidation into a few capital intensive production facilities.

McNary shares many of the same quality of life indicators with mill towns across the country that have suffered the impact of economic dislocation resulting from consolidation.

A national, as well a global, map littered with economically devastated towns demonstrates that the promise of economic growth from the job creation associated with the extraction industry is an illusion. Rather than fostering sustained improvement in the regions, these industries have a visible impact of arresting local development and fostering conditions of dependency.

The underlying economic and political relationships are based on unequal economic and political power, with corporations operating to maximize the profits of actors that have no investment or stake in the sustainability of the region.

In many company towns, a political as well as economic dependency develops in which the majority of questions concerning education, food distribution, infrastructure maintenance and civic organization are managed by distant corporate managers, and not people with roots in the region. While the physical infrastructure may grow, the organizational infrastructure and social capital decline. The skills, networks and experience are diminished and the development of other economic activities and skills essentially comes to a halt.

When the company leaves and the wage jobs that create no wealth disappear, communities are often left in an organizational and economic vacuum.

The Highland Support Project has partnered with community leaders to form a community garden so that local families have access to healthy, organic food. We have a short term goal of assisting ten families with the infrastructure and training needed to be successful in producing sufficient produce to meet their needs. Beyond that, our medium term goal is to construct a roadside farmer’s market to serve the community with a long term goal of fostering the growth of a produce cooperative to supply growing tourism and the government contract market.

Karen Mayorga