Coal Production Shifting to Northern West Virginia

Nothing highlights the shift in Appalachian coal production more than Boone and Marshall County, West Virginia. For as long as I can remember, Boone County was always #1 in coal production. Today,  Marshall County, which is located in the north-west part of the state, is the state’s biggest coal producer at 17.2 million tons (compared to 15.8 million in Boone County.)

As we’ve highlighted several times over the years, this development should not come as a shock. In fact, projections from the U.S. Energy Information Administration (EIA) have consistently shown central Appalachian coal production falling steeply while northern Appalachian coal production slightly increasing over the coming years.  And this is exactly what has happened.

One reason for this shift is that southern West Virginia steam coal is running out and it is becoming too expensive to produce. As the chart below shows, coal mining productivity has declined dramatically over the last decade in West Virginia. While this is good news for coal miners in the short-run because it means more jobs (ironic that coal mining jobs were higher in 2011 and 2012 than they were at any any time over the last 18 years and yet the “war on coal” campaign is stronger than ever), it eventuality means higher coal prices and stiffer competition that will reduce employment in the medium and long run. As the chart below shows, there is an inverse relationship between coal mining employment and productivity. As productivity declines, employment goes up. 

Coal Employment & Productivity

 A closer look below reveals that coal production in the northern part of West Virginia has slightly increased (49.3 to 49.9 million tons) from 2008 to 2012. Since 2000 it has grown by about seven million tons (42.8 million).* Southern coal production, however, has dropped from 116 million tons in 2008 to just 79 million in 2012. In 2000, the southern counties produced almost as much as the entire state in 2012 at 126.6 million tons. The northern counties also are making up a much larger chunk of the state’s coal production, growing from 25 percent in 2000 to 39 percent in 2012. Meanwhile, the southern part of the state has seen a decline from 75 percent in 2000 to 61 percent in 2012.

norhtsouthcoal production

While both coal-producing regions have seen sharp drops in productivity between 2008 and 2012, the decline in productivity in southern West Virginia has been nearly twice as acute.  In 2008, the annual tons produced per miner in the southern coalfields were 7,489 compared to just above 5,000 in 2012 – a drop of 32 percent. In the northern part of the state, the decline from 9,169 to 7,731 was only about half or 15.7 percent.  The sharper drop in productivity  – and the overall lower rates of productivity  – in the southern coalfields highlights how uncompetitive the market is for central Appalachian coal compared to coal produced in the northern part of the state. 

northsouthproductivity

While both regions experienced job gains during this four-year period – partly because of a decline in productivity – most of the job gains where in the northern part of the state. From 2008 to 2012, the number of direct coal miners increased from 5,337 to 6,460 in northern West Virginia – a gain of 1,083 – compared to an increase of just 86 jobs (15,550 to 15,626) in the southern coalfields.  The number of coal-mining jobs in the southern part of the state is most likely much lower today. According to state data, there were nearly 2,400 fewer coal miners in West Virginia in December 2013 than in 2012.

With the drop in coal production and employment in southern West Virginia, political leaders and other stakeholders should engage in a constructive conversation about the future the region. Just recently, more than 1,700 people gathered in Pikeville, Kentucky to do just that.

Instead of waiting like Kentucky until we lose 6,500 coal mining jobs, our state leaders need to take action NOW.  Because without a plan for the future, and without a broad recognition that coal mining is not going to rebound in southern West Virginia anytime soon, we are likely to see our state’s economic problems go from bad to worse.

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 *Southern Coal Counties: Boone, Clay, Fayette, Greenbrier, Kanawha, Lincoln, Logan McDowell, Mercer, Mingo, Nicholas, Raleigh, Wayne, and Wyoming.

 *Northern Coal Counties: Barbour, Braxton, Brooke, Grant, Harrison, Marion, Marshall, Mason, Mineral, Mononghalia, Ohio, Preston, Randolph, Taylor, Tucker, Upshur, and Webster.

Budget Beat – December 20, 2013

Thank You for Voting! Future Fund and Higher Minimum Wage Make the Top Five

This week many of you voted on the issues you want the Our Children Our Future campaign to focus on during the 2014 Legislative Session. Two of the WVCBP’s major initiatives, Increasing the Minimum Wage and Creating a Future Fund, made it into the top five! Please take this next easy step and let your legislators know that you support the OCOF campaign’s efforts.

West Virginia One of Few That Will Experience Budget Cuts

West Virginia is one of just seven states facing budget cuts this year. While most states’ economies are recovering from the Great Recession, West Virginia is now paying for tax cuts of the past through reductions in funding for important programs like higher education. Read more in Sean’s blog post.

Want to Know More About What Budget Cuts Will Mean This Year? ~ Budget Breakfast – January 22, 2014

Want to know more about how the governor’s budget will impact you and the work you do? What lies ahead as across-the-board budget cuts seem likely again this year? Join us on Wednesday, January 22 from 8AM-9AM for the WVCBP’s first Budget Breakfast. Ted will break through the jargon and explain how changes to the budget will affect programs crucial to low- and middle-income families. Save the date – registration information will be sent to you soon!

Helping Appalachia Transition

At the Shaping Our Appalachian Transition (SOAR) conference last week in Kentucky many ideas were discussed on how to help the region plan for the years ahead. SOAR was started by Kentucky Congressman Harold Rogers and Governor Steve Beshear who appointed more than 40 business and education leaders to guide the initiative. The conference was a chance for others to offer their ideas. Sessions were held on tourism, entrepreneurship and other issues. The idea of a Future Fund was discussed, along with other ideas. The WVCBP has advocated this approach before, including as a recommendation in State of Working West Virginia 2012 – In Depth: the Gas Boom and Coal Bust. Creating a taskforce in West Virginia of economic development leaders, along with other community partners, could help pave the way for a smooth transition as the coal industry’s economic dominance subsides.

Free Movie – Inequality for All – January 14, 2014

The WVCBP, along with many sponsors, is proud to bring “Inequality for All” to the Culture Center on January 14, 2014. Please plan to attend this free screening and discussion on how the widening income gap is hurting the nation’s economy and its workers.

Inequality for All evite

Happy Holidays from All of Us at the WVCBP!

Photo from our holiday dinner: Sean (with Liam), Brandon (with Lucia), Ted (with Lucy)

babies 12.17.13

43 States Aren’t Facing Budget Cuts, West Virginia’s Not One of Them

The National Association of Budget Officers (NASBO) has released the Fall 2013 edition of its Fiscal Survey of the States. When we last checked in on the NASBO report, West Virginia was one of eight states cutting its general budget in FY 2014 from Fy 2013, with the second largest cut among the states. 

With the fall update, the budget outlook for most states has improved. Most states are experiencing revenue gains, with tax collections outperforming projections, and overall modest growth and stability. However, West Virginia is still only one of seven states that is projected to reduce its budget in FY 2014, with the 4th biggest reduction.

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Source: NASBO 

Why is West Virginia cutting its budget when so many other states don’t have to? West Virginia has a clear and undeniable revenue problem. To date, general revenue collections are down more than $54 million from this point last year, and are only expected to be up by about $32 million from FY 2013 when FY 2014 is over, an increase of only 0.8%. And considering that the general revenue fund saw virtually zero growth from FY 2012 to FY 2013, that’s not a good place to be at all.

So what’s the reason for our revenue problem? It can’t be easily blamed on our “sluggish economy.” Last year, West Virginia was in the top 10 among states in private sector GDP growth.

gdp

Source: Bureau of Economic Analysis

And while that growth may have occurred in FY 2012 and FY 2013, more up-to-date data do not show growth problems. Personal income growth, while slow, has been growing steadily throughout 2013, but revenue growth continues to struggle.

pi

 Source: Bureau of Economic Analysis

So if revenue continues to fall even as the economy grows, what could be the culprit? You guessed it, tax cuts. Recent tax cuts cost an estimated $316 million in FY 2013, and will grow even bigger by the time FY 2014 ends. And when you look at which revenue source is struggling the most, and which taxes have been cut, the conclusion becomes fairly obvious.

Budget Beat – December 13, 2013

Much of West Virginia Remains Owned by Out-of-State Corporations

This week the WV Center on Budget and Policy and the American Friends Service Committee revisited a 1970s study looking at who owns West Virginia’s private land. While large out-of-state corporations still own much of the state’s land, timber interests, not coal companies, are now the biggest players. The full analysis was released this week and covered by the Charleston Gazette, the Huntington Herald-Dispatch and West Virginia Public Broadcasting. Recommendations from the report, including greater transparency of tax data to ensure these corporations pay their fair share of taxes, were included in this Gazette editorial.

Top-Ten-Landowners-web

Budget Should Grow the Middle Class

With the 2014 Legislative Session right around the corner soon the governor will release his budget for the upcoming fiscal year. With talks of more budget cuts looming, read more in Ted’s oped urging the governor to adopt a pro-middle class legislative agenda.

ted and lucy 12.12.13 filterTed and Lucy Boettner mingle with WVCBP coalition partners

Time to Raise the Minimum Wage

Ted took this issue to statewide talk radio last week. Listen here. And mark your calendars for January 14 when the WVCBP and our coalition partners bring ‘”Inequality for All” to the Culture Center for a free screening and discussion on the country’s widening income inequality.

Long-Term Unemployment Should Be Off the Chopping Block

Part of the latest budget deal coming out of Congress is the elimination of long-term unemployment benefits. Check out Sean’s blog post on why extending these important benefits should be part of the budget deal, especially for 16,000 West Virginians who rely on them.

He’s Our Hero

Nobody cares more about raising the minimum wage, helping the unemployed and taking care of West Virginia’s low-income kids and families than WVCBP board member Rick Wilson. Here he is receiving the Hero Award from the Our Children Our Future coalition today in Parkersburg (third in from the right).

Rick OCOF hero

Great Things Happening

  • Yesterday Appalachian Voices launched its new Energy Savings Action Center, a tool designed to help people save money and energy by promoting energy efficiency loan programs through their electric utility.
  • Want to know more about how many new jobs the Marcellus gas boom is bringing to West Virginia and its neighbors? Join us for a webinar on Friday, January 10 from 2-3PM. Registration open now. Read more in the Charleston Gazette and WV Public News Service on how the number of new jobs has been exaggerated by the gas industry.
  • The Black Ministerial Alliance is holding a health care enrollment session from 1 pm to 3 pm on Saturday, December 14th at the Metropolitan Baptist Church (205 Donnally Street) in Charleston. Come and find out what you need to know about the Affordable Care Act.

Final Note

As Nelson Mandela was laid to rest this week, we thought this piece was a a fitting tribute.

Why Extending Unemployment Benefits Should Be Part of the Budget Deal

The recent budget deal announced by leaders in Congress has left out one very important provision for those struggling to find work, the extension of emergency unemployment insurance benefits. On December 28, 1.3 million long term unemployed workers, including 16,000 West Virginians, will lose their unemployment benefits.

As I previously discussed here, these benefits increased the number of weeks that unemployed workers could collect unemployment insurance benefits. Now, the looming expiration comes at a time when long- term unemployment remains a big problem for the country. In fact, it is the long-term unemployed that are keeping the unemployment rate above pre-recession levels. As this chart shows, the unemployment rate of those who are unemployed for only a short period of time is back down to pre-recession levels. It is for those who go months without finding a job where the unemployment crisis lingers.

longtermunemployment-800x780

And for those who are unemployed, it is still very difficult to find a job. Currently there are still three unemployed workers for every job opening. And not only are the odds against them, the long-term unemployed often face discrimination from potential employers, creating a stigma for the workers and keeping them unemployed even longer.

numberofjobsopeningsperunemployed

As the above chart shows, the ratio of job seekers per job opening is worse now than its peak during the previous recession. Ending extended emergency unemployment benefits while the long-term unemployment rate is so high would be unprecedented. The current long-term unemployment rate is much higher than it was when any of the previous emergency extensions were ended.

11-20-13ui-f3 (1)

There are millions of workers struggling to find work in a still-fragile economy. Failure to extend federal unemployment programs would mean less spending by unemployed workers and their families, hurting the economy and threatening the weak recovery. Emergency benefits are an effective tool at helping both workers and the overall economy.