The Socio-Economic Impact of Coal Job Losses
By Staff, American Coal Council
In 2008, the West Virginia coalfields were thriving and the state produced 165 million tons of coal. The 102 active coal operations provided jobs for almost 60,000 people – 19,877 coal miners and approximately 40,000 support/contract personnel for a total of 59,877 jobs.1 Boone County, just south of the state capitol of Charleston, was the state’s leading coal producer with 31 million tons. The county also led the state in coal employment, with 4,656 direct coal mining jobs.2 In fact, coal production employed more than half the county’s total workforce.3 Direct coal employment provided an estimated $365 million in wages. The coal produced contributed $5.1 million in severance taxes, more than half of Boone County’s approximately $10 million annual budget.4
Just a decade later in 2018, West Virginia coal production had declined to just 99 million tons, a drop of 40 percent. Statewide coal employment had dropped to 51,609 coal mining and contract jobs.5 In Boone County, the decline was much deeper, with employment dropping by 85 percent to just 728 active miners and severance taxes decreasing to just $675,000, a decline of 87 percent. This decimated the county’s budget and forced cuts to basic services such as education, emergency services and police protection.6 Direct coal wages fell by 88 percent to an estimated $44.2 million. The county’s population decreased by 15 percent from 25,500 in 2008 to 22,000 in 2018.
Displaced coal miners and support workers were forced out of the county to find employment. Many left the state, leaving behind homes and a lifetime’s possessions.
Across the country in Campbell County, Wyoming, home to Powder River Basin (PRB) coal, the story is beginning to look similar. PRB production has dropped from a high of 496 million tons in 2008 to 324 million tons in 2018 and 277 million tons in 2019.7 PRB employment has also decreased, though not as dramatically as in Boone County. Campbell County’s direct coal employment was approximately 6,800 in 2008 and declined to 4,586 in 2018 – a drop of 33 percent.8 The number of active miners has declined further in 2019 although current numbers are not available.
Campbell County coal miners earned an average of $129,000 per year in 2018.9 Using that as the constant, direct coal miners pumped $877 million into the Campbell County economy
in 2008, dropping to approximately $591 million in 2018 – a decline of 33 percent. Coal employment provides approximately 18 percent of the jobs in the county. In fact, Campbell and Boone counties led the nation in the percentage of the total workforce employed in coal mining.10
As in Boone County, the county’s population has begun to decline, dropping about 1 percent.11 Coal severance collections for Campbell County have dropped by more than a third, down $100 million from $300 million just nine years ago.12
So why is this happening?
The coal is still there. Hundreds of millions of tons of reserves are available in Campbell and Boone counties alone. Global demand for coal remains strong, with coal generation providing approximately 38 percent of the world’s electricity needs, just as it did 30 years ago. And the outlook is for continuing strength, with more coal being consumed to support the growing economies of Asia as they industrialize and electrify.
Several factors account for declining coal consumption in the United States and Europe: competition from cheap natural gas, the push
to add renewable energy sources, regulatory and political pressures, and declining demand for electricity as advanced nations change from industrial economies to service and technology-driven economies.
U.S. coal power plant retirements peaked in 2015 when the Mercury and Air Toxics Standards (MATS) rule went into effect, but retirements in 2018 and 2019 were not far behind.
Most analysts see a continuation of these trends, and the economic damage to the nation’s coal communities will continue to grow if unabated.
When the economy turns downward, particularly as sharply as in Boone County and Campbell County, and in other coal communities from Appalachia and the Illinois Basin to the PRB and other western coal basins – largely rural areas where other employment opportunities are few – the result is most often displacement of the working-age population and high levels of poverty for those remaining. Schools and other public services are shut down or discontinued and mental health is impacted.13
In Boone County, for example, the poverty rate has increased from 20.3 percent in 2012 (the earliest date for which data are available) to 24.3 percent in 2018.14 It is safe to assume that rate is growing as more mining and mining-related jobs have been lost. Meanwhile, the child poverty rate has been rising and stands at 36 percent.15 Drug and alcohol abuse tends to rise in communities experiencing high levels of unemployment,16 and Boone County is no exception. The opioid epidemic is costing Boone County an estimated $206 million annually – the highest per-capita rate in the nation.17
The bottom line is that the decline in our nation’s production and use of coal, and the lost jobs throughout the coal supply chain, are exacting a heavy socio-economic toll. This is particularly the case in rural areas where other choices are few and well-paying jobs are even fewer. Unfortunately, many federal regulatory mandates in the last decade until just the past few years contributed to coal’s decline and were made in a playing field that was not level for coal. And they were made without regard for these very real economic and social costs. Along with the need to appropriately value the attributes of coal generation in the electricity marketplace such as 24/7 availability and fuel security, it is urgent that our policy-makers address these very real factors.
- WV Office of Miners Health Safety and Training, https://minesafety.wv.gov/PDFs/CNTYMOEMP08.pdf. Note: The actual number of contractors working in the state’s mines was not tracked at that time so an estimate is used based on the earliest year for which these data are available (2010 -https://minesafety. wv.gov/2010%20Annual/2010%20STATISTICAL%20 REPORT.pdf), and using a ratio analysis of the current direct employment in 2010 to contractors to extrapolate the approximation.
- West Virginia Coal Facts 2009. https://www.wvcoal. com/resources/coal-facts/2464-coal-facts-2009
- An Overview of the Appalachian Economy, ARC 2018. https://www.arc.gov/assets/research_reports/CIE1-OverviewofCoalEconomyinAppalachia.pdf
- West Virginia State Auditor’s Office. https://www. wvsao.gov/localgovernment/. Note: Records only go back to 2012.
- WV Office of Miners’ Health Safety and Training https://minesafety.wv.gov/PDFs/CY%202018%20 Annual%20Report.pdf
- EIA Annual Coal Reports for 2018 and 2008. https://www.eia.gov/coal/annual/archive/05842008.pdf
- https://www.wyo-wcca.org/files/4015/0462/2986/Socioeconomic_profile__-_Campbell_County_ March_2017.pdf
- National Bureau of Economic Research report.
- https://www.wyo-wcca.org/files/4015/0462/2986/Socioeconomic_profile__-_Campbell_County_March_2017.pdf p.11