Mining Employment and Production Trends

The amount of coal mined in eastern Kentucky has fluctuated since the late 1970s, dropping briefly in the early 1980s, rising sharply and remaining high through the late 1980s and mid 1990s, then declining somewhat in the late 1990s. Despite these fluctuations, coal production in 2004 was only slightly lower than it was in 1979. By contrast, mining employment in eastern Kentucky declined dramatically over the same period. This is primarily the result of technological innovations that enabled more coal to be mined with fewer workers (see Figure 1).


Figure 1: Mining Employment and Production

One reason for this drop in mining employment is the increase in surface mining in Appalachian Kentucky. Cost varies significantly by mine type, with deep or underground mining incurring higher cost than surface mining or mountaintop removal. Surface mining and mountaintop removal are more cost-effective for producers. As noted in a 2006 article on the competitiveness of coal: “Although both contour strip mining and underground mining were common throughout Central Appalachia in the past, there has been a significant decline in the amount of contour stripping being done and a significant increase in the development of large, mountaintop removal mines during the past 25 years. This is a function, in part, of economies of scale and, in part, of the increasing cost of contour stripping.”1 As a result of this shift, while nearly half of Central Appalachian coal currently comes from surface mining, these mines account for only about 38 percent of mining jobs in the region (see Figure 2 and Figure 3).

Figure 2: Central Appalachian Coal Production
Figure 3: Central Appalachian Coal Employment

In 1979, coal mining provided over 50,000 jobs in Kentucky, with nearly 36,000 of those jobs located in the Appalachian region of the state. By 1992, mining jobs in eastern Kentucky had fallen below 20,000, and by 2004 were just above 13,000. Mining jobs have increased somewhat in the last few years due to rising global demand for coal only to decline more recently due to the recession. But temporary booms in employment have not negated the overall downward trend in mining jobs over the last three decades. Mining employment currently makes up only one percent of total nonfarm employment in Kentucky (See Figure 4).2

Figure 4: Kentucky Employment by Industry

 

1. Stagg, Alan. 2003. “Coal as a Competing Fuel Source.” Natural Gas and Electricity 22(6): p. 19.

2. Kentucky Legislative Research Commission. 2004. The Competitiveness of Kentucky’s Coal Industry (Research Report No. 318). Frankfort, KY.