The truth about the future of coal workers

What will happen in Appalachia? - promoted by hesterprynne


Industrial plant in Buchanan County, VA.

The New York Times yesterday (19-November-2016) published a piece detailing the truth about the future of coal workers. Titled “A Bleak Outlook for Trump’s Primises to Coal Miners”, it is worth a read for those truly concerned about coal workers in West Virginia, Pennsylvania, and Ohio.

From the piece (emphasis mine):

The United States coal industry and the jobs that support it have been in decline for decades as a result of environmental concerns, automation in mining and slowdowns in manufacturing industries that burned coal for power.

And these days, no matter who is president, coal is at the mercy of market economics. Coal’s No. 1 rival is cheap, cleaner-burning natural gas — which could become an even more potent competitor under the incoming administration. The probable easing of restrictions on pipeline building and loosening of rules on gas exploration and production would mean more natural gas reaching the market.

I don’t think the Trump presidency will have a material impact on bringing coal miners back to work,” said Ted O’Brien, a coal analyst at Doyle Trading Consultants, a leading energy industry research firm.

The bleak outlook for coal may explain why some of the industry’s executives have been reluctant to comment on how the Trump presidency may help their business: They may be wary of raising false hopes among their workers. And many may be reluctant to repeat past industry arguments that climate change was a hoax. Instead, coal producers would rather have tax incentives to support environmental improvements for coal-fired plants, as a way to ensure coal’s long-term viability even beyond a Trump administration.

Beyond the declining demand for coal, there has been an even more fundamental factor behind the shift in coal mining employment, which peaked decades ago. As with those in many industries, jobs in mining have fallen victim to automation. High-tech shears can now shave coal from underground seams — work that formerly required hundreds of miners. Surface mining, which has been increasing in recent years, has also replaced many workers with heavy machinery.

As a result, there are now just over 50,000 jobs in the American coal mining industry, down from a peak of more than 250,000 in 1980.

The industry is simply not going to produce the number of jobs that were historically available in the coal fields,” said Patrick C. McGinley, a law professor at West Virginia University, who focuses on coal issues.

Other marginal measures the Trump administration might be able to take on coal’s behalf, industry executives say, include rolling back the rules that protect streams from surface mining and easing those for leases and royalties on coal mined on federal lands.

This bleak outlook for coal workers is echoed in this 2015 research piece by Wood-Mackenzy, an energy industry research firm (emphasis mine):

Close to 17% of forecast 2015 US coal production is at risk of idling or closure, totalling 162 million short tons (Mst), as these mine’s total cash costs plus sustaining capital expenditures exceed current market pricing, according to Wood Mackenzie’s latest coal market outlook.

Wood Mackenzie says that the majority of the coal at risk is produced in Central Appalachia where approximately 72% of the total output is unprofitable. Years of declining productivity, thinning seams, increasing strip ratios, more stringent government regulations, and a high paid workforce have taken their toll and made Central Appalachia the highest cost region within the US. Other US regions also have substantial amounts of coal at risk, ranging from 47% of production in Southern Appalachia to a low of eight percent in both the Western Bituminous and Powder River Basin. In aggregate, this equates to approximately 14% of US thermal coal production and 58% of metallurgical coal production being at risk.

However, Wood Mackenzie emphasizes that for prices to rise, fundamentally one of two things must happen: either the global demand for steel and power must increase or the supply of coal must decrease. Hazelton adds, “The growth prospects for steel demand remain tenuous at best as many countries’ economies remain fragile. The recent strength of the US dollar also encourages non-US producers to grow their production as a strengthening US dollar compared to their local currency effectively lowers their costs of production when denominated in US dollars.

The facts are that the demand for coal is not going to increase as a result of any of Donald Trump’s promises. If anything, his blundering in foreign affairs and China will further reduce demand for coal. Automation is already taking away jobs. Coal workers are already viewed as “highly paid” — expect increased pressure for them to further reduce wages.

Suffering coal workers in West Virginia, Pennsylvania, and Ohio are in fact about to learn that their decision to put Donald Trump in the Oval Office will make their lives worse rather than better. They will lose, not gain, jobs. They will lose, not gain, wages. More mines will close. Meanwhile, more miners will die from toxic chemicals dumped into the environment. More miners will die or be injured on the job as the new administration slashes oversight and regulation of the coal industry. More of their children will be trapped in the misery of poverty as schools in the region continue to decline, college becomes less and less accessible, and the local economy spirals ever downwards.

The election of Donald Trump is good news for coal mine owners and industry executives. Those small groups will see huge reductions in their taxes while they are freed to “diversify” by shifting their investments to more profitable industries. Coal workers have just been conned by today’s best con-man and turned their backs on their strongest protectors.

Those who genuinely care about coal miners know that life in this region is about to get many times worse for them.



Discuss

12 Comments . Leave a comment below.
  1. What voters want to hear

    I’m increasingly thinking that voters will not vote for someone unless they talk down to them with BS happy talk. Coal mining jobs aren’t coming back. Neither are many manufacturing jobs. Retail is disappearing.

    I’m not going to have the same job as my grandpappy. Almost nobody is. Your best hope is to have the same quality of life. And what made those jobs have a great quality of life, a middle class sustainability?

    Democrats know, even though it seems half of them hate the answer. It’s the union. As long as Republicans and many Democrats fight unions, voters in tough times will vote whoever talks down to them the most.

    sabutai   @   Sun 20 Nov 9:07 PM
  2. I've never disagreed

    Which is why I was so disappointed Hillary Clinton’s ambitious plan to revive this region and move it away from coal with a top to bottom
    infrastructure and tech jobs program didn’t gain any traction. We shouldn’t lie to these people, but we also have to give them straight talk that leads to a realistically hopeful outcome. Folks convinced they have no future will always vote for someone promising them the golden past.

  3. We need to stop ignoring workers

    I read an article in Sunday’s Globe titled “Trump win looks like a loss for the Knowledge Economy”. It really epitomized, to me, why Trump won.

    Although I don’t think anyone can argue that 1950s style manufacturing is dead in the USA, the premise of this article was this:

    If you want to be earning a decent living in the 21st century, you get the most education you can, ideally in a high-demand field, or you start your own business. I’m not sure what to call the opposite approach: “Drop out and hope”?

    I have been railing about this for years and years: if that is the choice offered by new-age Democrats, then you’re going to wind up with Trump, because not everyone is capable of either getting advanced education or starting their own business (the latter of which is increasingly hard for the average person due to competition by global players).

    The writer, Scott Kirscner, just doesn’t seem to appreciate that we are not all capable of becoming scientists, or coders, or digital marketing professionals, or whatever. My guess is that he is living in a bubble, surrounded by people just like him – professional, college-educated, etc.

    His proclamation – that it is your own fault if you are struggling – is the exact condescension that Trump voters voted against.

    I have noticed a trend in the past couple of weeks – maybe even the past couple of months – in which liberal/progressives, in response to Donald Trump calling for the revitalization of US manufacturing, have been wailing “That isn’t possible. The factories are gone. Move on”. When you dig down even deeper, and ask them why we can’t make things in the USA, the response is always the same: “it will increase the cost of things”.

    There it is, laid bare. US workers don’t matter as much as cheaper goods. It is, at its heart, a one-dimensional conservative argument: after all, a higher minimum wage will also increase the cost of goods and services, won’t it?

    We could very well bring back the coal mines, making coal in-demand again, but the tradeoff would be massive pollution. Let’s acknowledge that this is a choice that we have to make – and then next acknowledge that if we don’t have a plan for the coal region, we have abdicated our responsibility to our citizens. We just told them, “screw you, we don’t care about you or your communities, and since our issue is more important than your job, you’re on your own. Go back to school or something, your unemployment is your own damn fault since you’re only capable of mining coal!

    Hillary Clinton’s plan was lip service and the people there knew it because Democrats have ignored this issue for at least the past 8 years, and arguable back to Bill Clinton’s presidency. Her plan was “increased job training, small-business development, and infrastructure investment”. As I said earlier, small-business development doesn’t mean much when you have gigantic national or global players in nearly every sector. Job training has been the mantra for decades, and it hasn’t done much because the level of skill needed is beyond the capacity of many, many workers. Infrastructure investment is a good idea, but people seem to be running away from that because Trump has said it too.

    You know what would have played better? Hillary Clinton talking about transitioning those workers from coal mining to solar manufacturing. Of course, although this was a successful endeavor coming from President Obama, the US solar market was almost immediately cannibalized by China due to Chinese government subsidies. It took just 3 years for that transition to happen, so now we’re left with, at best, people working in the “solar installation” business. But still, we are prioritizing cheap solar panels over US workers because we want more solar, and Chinese panels at 1/2 the price makes that happen more quickly.

    Opposing Trump reflexively locks in the support of working-class citizens to the Republican party. Democrats continue to proclaim that when push comes to shove, they want to be the party of the college-educated, knowledge-worker economy.

    Check the stats. There aren’t enough in that group to have a majority.

    • Any sort of labor can be exploited

      The idea that somehow, jobs in manufacturing will fix this is just another myth. The only reason that coal miners and auto workers made decent wages is that they were occupations performed by white males, for the most part, and these white males banded together in solidarity and bargained collectively with their employers. (the rent seekers, the 1%, the “have it alls”)

      Labor has not found it easy to organize for political power because the people they have elected over the years took a different direction and went after big bucks instead.

      The only way to “Make America Great Again” is to give labor a larger voice in the economy, and given Trump’s past, I do not see that happening. Then again, it did not happen with Obama or Clinton, or Bush, or Bush, Or Reagan…..

    • Bullpucky

      Hillary Clinton offered coal country a once-in-a-lifetime deal and they rejected it. My dad comes from a dried-up Pennsylvania mining town, Mahanoy City. It’s damn-near a ghost town these days. Side note: my great=grandfather chose not to take antibiotics and died on purpose of gangrene after a leg removal surgery (mining accident) rather than go slow of black lung – mining is fun!

      Anyway, old mining towns are bleak places. Clinton also offered college education, a cap on childcare expenses, a higher minimum wage (which boosts mid-level wages), guarantees on Social Security and movement toward more universal health coverage. Workers need every piece of that and they voted against it. Let’s stop pretending this has got anything to do with kitchen table economics. They voted for white identity politics. Apparently as you take everything that matters away from them, they cling ever tighter to that (yeah, I said “cling”).

      They didn’t get ignored (quite the opposite), they just don’t vote for the things that will make a positive economic difference for them.

  4. Coal jobs are leaving, slowly and quickly

    As a number of jobs nationwide, coal jobs will disappear slowly — a few percent a year. A decline that slowly would allow for simple retiring with no re-hiring. Nobody need be laid off.

    The problem is that each coal mine doesn’t reduce 3 percent of its staff each year. A mine closes all at once, and other mines continue operating at existing levels.

    While recognizing that “coal miner” isn’t a single job description with a single skillset, one way to help alleviate the economic challenges facing mid-aged coal workers who lose their jobs is to relocate them to other mining towns. It isn’t perfect. Lots won’t want to move. Sometimes skill sets won’t match. There’s a risk that the relocation lands the worker out of a job just a few years later. Still, doing some of this would remediate some of the challenges.

    And this is but one angle. Another is to sure up the pension funds for coal miners. Another is job relocation with skill-set but different industry: machine operators can work non-coal mining, large construction projects, etc.

    In my mind, the real challenge is this: there are dozens of communities that only exist because a coal mine once operated nearby. Before the mine, nobody lived there. Now that the mine is closed, folks are still there — not just the miners but the retail that sold to the employees and the businesses associated with the mine. What do they all do? The homes are worthless, skill sets limited, etc. Do we as a society help to relocate entire towns to new prospects? Is there even a way to do it without it becoming an insider’s buyout?

    If you just think “50,000″ you’re missing the boat. For every miner there’s a wife and a couple of kids. For every mining family there’s another family in the same town that relies on the mines for their employment. That just bumped you from ~50k to ~400k. And, those 400k aren’t spread uniformly — they’re in Appalachia by and large. A region with crummy shipping routes, expensive resources, low skills, poor infrastructure, weak education. Short of telling them to move to the nearest city, what’s the way forward?

    • Workforce mobility

      From a theoretical perspective, relocation makes sense. I’m just not sure how practical this is from a policy perspective. Although some people lack permanence in a particular region, many others have deep roots, either due to family, history, or just due to many personal connections. As a policy, it really just doesn’t respect those ties, a policy that says “the only help you’re going to get is to pick up and move somewhere else”.

      Quickly killing a town may also make sense from a theoretical perspective, but again, I’m not sure how practical this is from a policy perspective. Yes, there are plenty of other people in a town than the miners – so can you imagine the impact when, instead of the town slowly reducing population, when 1,000 miners lose their jobs, suddenly 1,000 houses are purchased by the government and bulldozed and 3,000 residents disappear? What is that going to do to neighborhoods? Or to businesses that lose customers? Absolutely destroy them.

      I don’t mean you any offense, but the solution seems a bit arrogant – an impersonal solution proposed by someone who is not impacted, done in a way to be coldly efficient. I could see someone here suggesting that we apply this to Springfield. “As a state, the only help we will provide to you is money to demolish your housing stock and relocate your citizens to Boston, where the jobs are”. Oh, and good luck finding housing in Boston, since we will only pay you what your house is worth ($100k) and you will now need to buy something in a hot real estate market ($300k).

      There are other things that could be done, particularly at the federal or state level. Using Springfield as an example, how about a policy of locating new statewide governmental facilities in Springfield rather than in Boston (when it makes sense)? For example, if we need to build a new department to manage the EZ Pass, instead of dumping more economic supply/workers into eastern MA, dump that supply into Western MA. Spread the wealth a bit.

      The exact opposite of this recently happened: the state closed a RMV call center in Springfield and moved its functions to a Boston center. Why? Because it owned the Boston building and leased the Springfield building. So although this seems like a smart decision, it resulted in a further gap between the haves and have-nots in this state.

      • Roots or not...

        …moving is also by definition a costly hassle.

      • Moving is hard

        and it’s not for everybody. But keep in mind that it need not be from Perry County, KY to Manhattan County, NY. It could well be from one mine town in West Virginia to another. Or to another holler 25 miles out of Charleston WV where the relocated can drive into the city and work construction.

        I’m certainly not arguing a forced move, nor am I arguing to move 10-25 percent of the community at a time (mine towns are small). But look, the jobs are gone. Rampant unemployment in a community drags it downward in all sorts of ways. Helping some people relocate can be a benefit both to the people who move (and now have gainful employment) and to the community they leave behind (local social services become less strained).

        And this isn’t like Springfield, for two reasons:
        1. The number of unemployed mine workers in any one place is actually quite small — because the places themselves are small. It’s nowhere near the scale of a place like Springfield MA.
        2. The number of total jobs within 30 minutes of Hazard Kentucky are tiny. These are areas with 25-100 people per square mile. Hampden County has a density of 750/sq mi, with the densest area Springfield itself, 4800/sq mi.
        It’s tough in Springfield, but jobs do exist in the area. There are just no prospects at all in rural Appalachia, not for a few dozen or 100 men in a single place.

        Your comparison of places like Coalwood WV (pop. 900) to Springfield (pop 150,000) is what’s out of touch — and the idea of a state purposefully locating a government office over 50 miles from an interstate in a community that absolutely lacks the education infrastructure to keep the office running is a remarkably poor one.

        P.S. You know there are plenty of working class people who live in and around Boston, and they need working class jobs too. I’m not opposed to state government offices in Springfield (or wherever), but the idea that civil servants who work in Boston are now the “haves” is a bit silly.

        • It's been done in Flint and Detroit

          Municipal contraction might be a good solution for Springfield too, though I differ our local resident for his input before I talk out of turn.

          And relocation assistance is interesting. It seems many of the skills are transferable and these are the folks who could go to fracking boom towns, or they can invest in preserving the mountains, watersheds and woodlands they have left for recreation and eco tourism. Wales and Northern England essentially shifted from mines to tourism. More government investment in infrastructure and transit could spur this development.

  5. Coal is the new whale oil

    In 50 years it will seem bizarre we ever relied on it.

    • Huh?

      Coal was the cheapest energy source available. That’s a powerful argument. Perhaps it’s a sign of mistaken priorities* but I don’t know why it’s bizarre that people want cheap energy.

      *I could do a whole post on the scam of economics claiming to be a science, while relegating anything that doesn’t fit into a simple line graph as an “externality” to be more or less ignored. It’s parallel to the footwork geocentrists relied on, and we laugh at them now.

      sabutai   @   Wed 23 Nov 6:44 PM

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