Economic Status of Coal-Producing Counties

To put coal employment in perspective, however, it helps to look at unemployment in coal counties. Even though mining jobs make up a large percentage of employment in these counties, the actual number of mining jobs is still relatively small. Mining accounts for a large percentage of county wages not because mining jobs are so numerous, but because other jobs are so scarce. The unemployment rate in Central Appalachia is much higher than the rest of the nation, and eastern Kentucky’s unemployment rate is among the highest in Central Appalachia. The percentage of working-age adults who are not employed is far higher than the official unemployment rate, which only counts those who are actively seeking employment.3 So while coal is a significant employer in some counties, the industry only provides jobs for a small fraction of the working age population in those counties (see Figure 7).

Figure 7: Mining Employment as Share of Total Employment

This combination of extremely high unemployment and heavy economic dependence on a single industry leaves Kentucky’s coal-producing counties in a vulnerable position. While coal employment has brought decent jobs and wages to a region in desperate need of employment opportunities, eastern Kentucky remains one of the most economically distressed regions in the country. The poverty rate in Appalachian Kentucky was nearly double that of the nation in 2000 (see Figure 8).

Figure 8: Percent of Population Living Below Poverty

Even within eastern Kentucky, coal-producing counties are among the most economically distressed counties. The top coal-producing counties have some of the highest poverty rates in the region (see Figure 9). Of the top eight coal-producing counties in eastern Kentucky, all but one (Pike County) have a higher poverty rate than Appalachian Kentucky as a whole. So while mining employment is extremely important as a source of income for individuals in coal-producing counties, the benefits of these jobs do not translate into prosperity for the region. A 2001 study on the future impacts of the coal industry in Kentucky concluded: “In some counties, coal mining represents such a significant part of the economy that even small changes in demand and output often have a dramatic impact on the well-being of the residents.”4 With the Central Appalachian coal industry in long-term employment decline, the region needs other sources of income to offset losses and promote economic development.

Figure 9: Population Below Poverty, Top Coal Counties

 

3. Seufert, Robert L and Mark A. Carrozza. 2004. “Economic Advances and Disadvantages in Appalachia: Occupation, Labor Force Participation, and Unemployment.” Journal of Appalachian Studies, Special Issue 10(3): pp. 331-339.

4. Thompson, Eric C., Mark C. Berger, Steven N. Allen, and Jonathan M. Roenker. 2001. A Study on the Current Economic Impacts of the Appalachian Coal Industry and its Future in the Region. Center for Business and Economic Research, Gatton College of Business and Economics, University of Kentucky. Lexington, KY: University of Kentucky.