Scrap Recycling in U.S. Has Increased Economic Impact

According to a recent study – published by Washington-based Institute of Scrap Recycling Industries (ISRI), Inc. – purchasing, processing and brokering old materials to be manufactured into new products provide more than 470,000 persons with jobs and generate nearly 106 billion dollar annually in economic activity in the United States.

This analysis, conducted by the independent consulting firm of John Dunham and Associates, New York, documents the contribution of the scrap recycling industry to the economy of the country in terms of employment, tax generation and economic benefit. The authors of the study found that in 2015 round about 149,000 jobs are being directly supported by the manufacturing and brokerage operations of the business branch. In addition to this, more than 322,500 jobs in the U.S. economy are indirectly supported by the scrap recycling industry through suppliers (firms providing goods and services to scrap recyclers and brokers) and the indirect impact of the industry’s expenditures (re-spending of wages by workers in the direct and supplier sectors).

As reported, the U.S. scrap recycling industry accounts for 0.68 percent (or 105.81 billion dollar) of the nation’s total economic activity. This makes the branch similar in size to the data processing and hosting industry, the dental industry and the automotive repair industry. Federal, state and local governments benefit also from the scrap recycling industry, because this sector of the U.S. economy generates about 4.39 billion US-Dollar in state and local revenues annually. Another sum of 6.76 billion US-Dollar in federal taxes is paid per year by the industry and its employees.

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In the United States exports of scrap commodities account for 26.79 percent of the industry’s economic activity and are connected with some 125,000 jobs. The authors of the economic impact study found that in this year about 39,000 jobs are directly supported by the export activities associated with the processing and brokerage operations of U.S. scrap recyclers. Further jobs (more than 86,000) are created as a result of supplier operations and through the indirect effects of scrap recycling exports. All of this activity generates 28.34 billion US-Dollar in economic benefits in the United States and contributes 1.31 billion US-Dollar in tax revenues for the federal government and 1.65 billion US-Dollar in state and local taxes, concludes the report.

The export plays an important role in the industry. Many materials (such as ferrous and nonferrous metals, post-consumer paper or electronics) would probably not be recycled because there is no demand for them in the United States, says the ISRI study. According to the information, China imports large quantities of paper for reprocessing because wood pulp is expensive in Asia. This also applies to electronic products. As reported, there is not enough demand in the United States for the more expensive post consumer materials (like gold and titanium) that may be smelted out of circuit boards, capacitors and other electronic parts. But countries like India, where the demand for gold is high, would see value in these materials.

The growing international demand for all manner of commodities ranging from iron and steel to paper, nonferrous metals such as aluminum, copper and zinc, plastics, rubber and more sustains the U.S. foreign trade activities. In 2013, the industry exported nearly 23.7 billion US-Dollar in commodity grade scrap products to more than 160 counties.

Photo: © Peter Titmuss |