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Coal jobs have dropped in Eastern Kentucky. Income has followed, new report shows

Coal rail cars sit empty on tracks at a loading facility near Hazard in 2017.
Coal rail cars sit empty on tracks at a loading facility near Hazard in 2017. Lexington Herald-Leader

Personal income has gone down in several Eastern Kentucky counties where coal employment has been decimated in recent years, according to a report from the Appalachian Regional Commission.

In Harlan County, for instance, per capita market income fell from $13,053 in 2015 to $12,579 in 2016, while in Perry County it dropped from $19,726 in 2015 to $19,043 in 2016, the most recent year covered in the ARC’s calculations.

Pike, Knott, Bell, Breathitt, Leslie, Letcher and Johnson also were among the Eastern Kentucky coal counties that saw a drop in per capita market income.

The declines were a factor in income in Appalachian Kentucky losing ground in comparison to the U.S. level.

Per capita market income in Appalachian Kentucky equaled 48.3 percent of the national level in 2015, but that fell to 46.8 in 2016, according to the ARC report.

Nationally, the income figure went up in 2016 to $40,679, but in Kentucky’s Appalachian counties, it edged down from $19,204 in 2015 to $19,022 in 2016.

That was the lowest level of any area in Appalachia, which the federal government defines as covering all of West Virginia, about half of Kentucky and parts of 11 other states.

Per capita market income is a measure of an area’s total personal income not counting transfer payments such as public assistance, according to the ARC report.

Coal jobs in Eastern Kentucky have plummeted from 14,619 in 2011 to 3,909 in the second quarter of this year, according to the Kentucky Energy and Environment Cabinet.

Studies have cited competition from cheap natural gas for electricity generation as the biggest factor in coal’s decline, though other factors have played a role, including efforts to beef up environmental rules in the Obama administration and the rise of renewable energy such as wind power.

There has been no significant increase in coal jobs in Kentucky under President Donald Trump.

The statistics on income in Eastern Kentucky were in the ARC’s latest classification of the economic status of the 420 counties in Appalachia that it will use for the 2019 federal fiscal year, which begins Oct. 1.

The agency uses the data in decisions about spending money in the region and how much counties have to put up in matching funds for ARC grants.

The lowest economic classification is distressed, meaning the counties are in the bottom 10 percent of more than 3,100 U.S. counties on measures that include income, the poverty rate and unemployment.

ARC said 81 counties in its region will be considered distressed in fiscal year 2019.

That was down from 84 counties, as income, the poverty rate and unemployment measures in the region as a whole improved from the fiscal 2018 numbers.

However, two Kentucky counties slid in the rating. Greenup moved down from a category called transitional – the middle ranking of five categories – and Robertson moved down to the lowest category, distressed.

For the 2019 fiscal year, Kentucky will have 38 Appalachian counties classified as distressed, up from 37 in the 2018 fiscal year and the most of any Appalachian state.

CountyStatusARC.jpg
Kentucky will have more economically distressed counties in fiscal year 2019 than any other Appalachian state. Appalachian Regional Commission

The ARC report shows that the average unemployment rate went down across the region over the last three years, but that the gap widened between the rate in Appalachia and the rest of the country, showing employment in the region is not improving as quickly as in the nation.

Per capita market income went up in both the nation and the Appalachian region from 2015 to 2016 and the poverty rate fell in both, though it continues to be higher in Appalachia than the rest of the country.

The national poverty rate from 2012 though 2016 was 15.1 percent, compared to 25.9 percent throughout Kentucky’s Appalachian counties.

Some Kentucky counties saw much higher poverty rates: 41 percent in Clay County; 38.4 in Lee; 42.5 percent in McCreary; 37.1 in Owsley; and 40.8 in Wolfe, according to the report.

The commission notes that the economic situation throughout the region has improved significantly since the 1960s, when another deep slump in the coal industry helped push the poverty rate in Appalachia to 31 percent.

That compared to 16.7 percent in the 2012-2016 period. The number of high-poverty counties — those with poverty rates 1.5 times the national average — went down from 295 the region in 1960 to 93 in 2012-2016.

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