March 29, 2017

The Coal Jobs Aren't Coming Back



In light of Trump's recent photo ops about bringing coal jobs back, I thought I'd take the time to mention that no, they aren't. Certainly not unless the price of natural gas and oil rise significantly enough to offset their cost advantage. Given how successful fracking and other extraction innovations have been, such as horizontal drilling, that is highly unlikely. But even if those prices did rise, that still doesn't mean the jobs are coming back: most of them were lost to automation. 
One of my fav economists, Scott Sumner has a great post laying out why the jobs aren't coming back (particularly in West Virginia, sorry). You should read that because when I read it I was like great, now I don't have to look up the data. But here are the two main take aways:

  • Coal mining employment reached an all-time high in the early 1920s and has declined by over 85% since
  • Coal production reached an all-time high in the late 2000s and has declined about 15% since

So from the 1920s to the 2000s coal production was growing while employment was shrinking, that was because automation made workers more productive (leading to wage gains), not because of regulations or foreign trade.

I don't mean to sound cavalier about an industry shedding jobs, but at least I'm not selling people false hope and lies. This is how the economy has always worked, old industries fade and new ones take their place. It's disingenuous for people to argue that the present difficulties (caused by inevitable change over time) are somehow new or different from the past, or that we need to take drastic actions to cope. This is especially true for coal where the vast majority of job loss had occurred by the 1960s. Prior generations were able to successfully deal with the same issues without electing a fascist demagogue, so that's a shit excuse. 

Also when you add in the social cost of coal mining, from the contribution to climate change and detrimental effects on human health of mining and burning coal, the decline in coal production is not a net detriment to the economy overall (though local communities can be negatively impacted on net from this process).

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