There is more talk than usual about the need to create jobs and a more diverse economy in eastern Kentucky because of the coal industry’s decline.
It made me wonder: what are the latest trends? For some answers, I called Ron Crouch, director of research and statistics for the Education and Workforce Development Cabinet. He previously headed the Kentucky State Data Center for two decades and is better than anyone I know at analyzing this sort of information.
People are alarmed because coal- industry employment in eastern Kentucky has dropped to about 7,300 — half what it was five years ago. Coal-mining jobs have been important to the region because they pay well: about $65,000 a year.
President Barack Obama’s critics have blamed stricter environmental regulations for the sudden drop in coal employment. But the biggest factors have been cheap natural gas and the fact that eastern Kentucky’s best coal seams have been depleted over the past century; the coal that is left is more costly (and environmentally damaging) to mine.
But Crouch notes that coal employment in eastern Kentucky has been declining steadily for more than six decades — even accounting for periodic booms and busts — mainly because of mechanization. Coal production peaked in 1990, but coal employment peaked in 1950, when there were 67,000 miners.
Some eastern Kentucky leaders have pursued manufacturing as a source of new jobs. But Crouch says the long-term prospects for manufacturing aren’t too good, either, also because of automation.
“Manufacturing is coming back to the United States, but not necessarily manufacturing jobs,” he said. “We’re producing far more goods, but with far fewer workers.”
Still, Crouch sees hopeful signs for eastern Kentucky.
While the region still lags the state in college degrees, high school graduation rates have improved significantly, as have the number of people completing other levels of training between high school and a bachelor’s degree. Many new, good-paying jobs are for people with that level of education.
Those areas include health care as well as professional, scientific and technical services. Some of these jobs pay well. For example, the number of registered nursing jobs, which pay about $55,000, is growing significantly.
Eastern Kentucky’s health care industry should see big growth in coming years. One reason is demographics. Baby Boomers are now entering their 60s and 70s and will require more health services. Another reason is the Affordable Care Act.
“ You’re going to see a huge increase in the number of people in east Kentucky who have health insurance,” Crouch said.
Because eastern Kentucky families are smaller than in the past, there will be less pressure for young people to leave.
“You now have a population with more people in their 40s, 50s and 60s than in their teens and 20s,” Crouch said. “If those young people can get the education and training they need after high school, there will be jobs for them in east Kentucky.”
But many of the growing economic sectors in the region, such as health care, have traditionally been dominated by women, while shrinking sectors, such as mining and manufacturing, have been mostly male. In some eastern Kentucky counties, women now have higher employment rates than men.
“The good news is the economy has been transitioning to a broader economy,” Crouch said. “ But how do you transition a population of males who have been involved in mining and manufacturing to jobs in professional, technical services and food services and health care, which have largely been female?”
Crouch said improving broadband service in eastern Kentucky, which has the state’s poorest connections to the Internet, is vital.
“ That would accelerate the growth in higher-skilled jobs,” he said.
Crouch is troubled that many eastern Kentucky counties have high percentages of working-age people not in the formal labor force. He thinks many are “getting by” in the cash and barter economy, some of which is illegal.
He also is concerned that much of the job growth has been in lowwage service industries. Because the legal minimum wage hasn’t kept pace with inflation, full-time work in many low- wage jobs doesn’t produce a living wage for a family.
“The good news is that east Kentucky is not having a brain drain, despite what people think; it’s having a brain gain,” he said. “But, as the saying goes, we’re halfway home and have a long way to go.”