Douglas County's scenery draws in people. And then what?

“It's not enough to be in a beautiful area,” Douglas County Commissioner Doug Robertson said. “Ultimately, people have to earn a living.”

The Umpqua Valley's natural wealth has always been the main attraction.

The Hudson's Bay Co., global experts on capitalizing on a land's resources, built Fort Umpqua at the confluence of Elk Creek and the Umpqua River in 1836 to trade with Native Americans. More than a decade later, pioneer Jesse Applegate helped forge a path for the farmers, ranchers and miners to come. A railroad was the first large manmade structure to cut through the county. A network of roads developed to bring logs to mills. Many of those logs came from the federal forests that cover more than half the county.

The natural resources allowed the county to prosper. Wages were comfortable, and government services well funded. Homegrown 20th-century businesses, such as Roseburg Forest Products and Umpqua Dairy, grew in classic rags-to-riches fashions.

Today, those companies and others still thrive. But overall, the economic numbers aren't good.

Douglas County has the highest unemployment rate in Western Oregon, and household incomes are below state and national averages. County government services rely on increasingly meager federal payments intended to make up for logging restrictions on federal lands.

According to the 2010 census, the county has low percentages of adults with four-year degrees and adults born after 1964, the last year of the baby boom.

Since taking over six months ago as executive director of The Partnership for Economic Development, Alex Campbell said he's heard people complain about a “brain drain.”

Campbell said some ex-Douglas County residents may come back if they had something to come back to.

“Some of those amenities that bring people here to begin with, coupled with a good job, might bring some of these people back home,” Campbell said. “I think there is an opportunity to connect with those people.”

The wood-products industry still forms the backbone of the county's economy. But even before the recession and construction slowdown, Southwest Oregon's wood-products industry was shedding jobs.

An Oregon Employment Department economist, Guy Tauer, tracked employment over the past decade in the region's “forest cluster,” an assortment of jobs ranging from logger to cabinet maker.

He found that even during the peak of the building boom from 2004 to 2006, forest cluster jobs in Douglas, Coos, Curry, Jackson, Josephine and Lane counties were slowly declining.

Automation allowed mills to ramp up production with fewer workers, he said. “You don't have to pay a machine for a sick day.”

The recession accelerated, by a lot, the loss of jobs, he said.

Employment data doesn't accurately capture everyone who works in the wood-products industry. Mill workers hired through temporary employment agencies or employees in corporate offices aren't counted, for example. Still, Tauer said he's confident in concluding that employment in the broad-range of forest-related industries declined by about 30 percent between 2001 and 2010.

Mill employment has been further damaged because logging has shifted from public to private lands.

While raw logs from federal and state lands can't be exported, logs taken from private lands can be shipped overseas. The competition for logs has increased the price of raw materials, even as demand for finished products has remained soft.

“Mills are being squeezed in the middle because you have to pay higher prices for logs, yet lumber prices are low, historically,” Tauer said.

Forest cluster employment may rebound a little if construction picks up, but it's unlikely homebuilding will resume quickly enough for the wood-products industry to lead the recovery, Tauer said.

Tauer mentioned health care, caring for the elderly, tourism and retail trade as sectors that may supply new jobs, with health care as a particularly fertile field for well-paying jobs.

After a period of uncertainty, Veterans Affairs recently reaffirmed its commitment to increasing services at the Roseburg VA Medical Center. The agency estimates it will spend $55 million in the coming years to expand the hospital, build clinics and form partnerships with other hospitals.

The wine industry is another high-profile source of hope for an economic engine. Central Douglas County is home to about three dozen grape growers. The Southern Oregon Wine Institute at Umpqua Community College teaches students the art of growing grapes and making wine.

The economic development chairman for the Downtown Roseburg Association, Aaron McManus, said he believes small businesses will drive job growth in the county.

An adjunct faculty member at Phoenix Charter School, McManus will be joined today by students opening a downtown store at 714 S.E. Jackson St. to sell art, jewelry, candles, lotions and other locally made items.

“We have a lot of people making things in the area and a lot of vacant storefronts,” McManus said.

McManus said students will learn how to run a business and encourage them to become job creators.

“We have to involve people to get them thinking in that direction,” he said. “If people wait for jobs to come, they're going to be waiting a long time, I'm afraid. Let's go out and create new jobs.”

Campbell said the county can't turn the clock back to the good old days, but it can tap its traditional industry to attract new jobs.

Furniture makers, for example, would find the raw material and workers they need here, he said.

Campbell said he wants to recruit businesses large and small, leveraging the county's natural strengths, which he said includes outdoor recreation and a stable work force. Campbell said a local manufacturer told him that because employees tend to stay with the company for many years, it saves money on recruiting and training new workers.

The county's experience with new large employers outside the wood-products industry has been mixed.

Alcan Cable ended a two-decade run when it closed its Wilbur plant at the beginning of this year. Bayliner Marine shut down its Wilbur boat-building plant in 2008.

Then there was the infamous “pajama day.” In a morale-building exercise, Dell Inc. employees came to work on a day in 2007 wearing pajamas only to find the doors of the company's Roseburg call center locked for good.

American Bridge on Bolon Island near Reedsport saw its employment drop from 110 to 22 after a rail line abruptly closed in 2007. The Oregon International Port of Coos Bay recently reopened the line. American Bridge hosted a celebration.

Robertson said the county must continue to try to diversify its economy, but it also needs a new federal forest management plan that allows more timber harvests.

“We can't change our geography,” he said. “We're still in the middle of some of the most significant tree-growing areas in the nation.”

• Reporter John Sowell can be reached at 541-957-4209 and jsowell@nrtoday.com. City Editor Don Jenkins can be reached at 541-957-4201 or djenkins@nrtoday.com.

WHY WE'RE HERE The weeklong Why We're Here series is looking at the features of Douglas County that give it a sense of place and make it home for more than 100,000 people. The series also looks at the county's problems and limitations that lead to some people leaving. The series: Sunday: Douglas County's population turns grayer. Residents pinpoint seven virtues and seven vices of Douglas County. MONDAY: Douglas County launches the careers of young professionals. TUESDAY: Ex-residents explain why they left. WEDNESDAY: Transplants from other regions describe what strikes them about Douglas County. THURSDAY: The county has a surprisingly vibrant arts scene. TODAY: What it will take to erase the negatives that hold the county back.