In explaining their dissatisfaction with the Environmental Protection Agency's regulation of the coal industry, Sens. Mitch McConnell and Rand Paul have said that more than 200,000 jobs in Kentucky depend on coal, including about 18,000 miners.
McConnell's office told us the 200,000 figure was based on a 1994 study, "The Impact of Coal on the U.S. Economy," by Adam Rose and Oscar Frias of the Department of Mineral Economics at Pennsylvania State University. The National Coal Association commissioned the study.
In their study, Rose and Frias used a national multiplier of 11.003. In other words, for every mining job that's lost, they estimated 11.003 jobs would be eliminated.
McConnell and Paul apparently applied the 11.003 multiplier to Kentucky's current 18,000 mining jobs and came up with 198,000, rounded up to 200,000 total jobs from coal.
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The problem with their calculation is geographical. They used a national multiplier to estimate jobs within a state.
Kentucky mining jobs do generate jobs outside the state — in corporate headquarters in Richmond, Va. and St. Louis, for example, in power plants in other states and places where mining equipment is manufactured.
The bigger the geographic area, the bigger the economic multiplier, although an 11 multiplier for coal is hefty. In 2009, when the Berea-based Mountain Association of Community Economic Development produced reports on the economic impacts of coal in Kentucky, the coal jobs multiplier used by the U.S. Commerce Department's Bureau of Economic Analysis was 6.14 nationwide and 3.93 in Kentucky.
In the appendix of the Penn State report cited by McConnell and Paul there are charts on coal's economic impacts by state, based on data from the Bureau of Economic Analysis and the Energy Information Agency.
Kentucky had 30,048 direct mining jobs in 1992 resulting in total employment of 118,162. That's a multiplier of 3.89.
If about 30,000 mining jobs yielded 119,000 total jobs in 1992, according to the report cited by our senators, 18,000 mining jobs could not yield 200,000 total jobs today.
Kentucky Coal Facts published by the Kentucky Office of Energy Policy and the Kentucky Coal Association reports that 15,012 miners in 2004 created 61,158 jobs statewide.
Coal Facts cites an updated report by the University of Kentucky Center for Business and Economic Research.
That's a multiplier of 4.07. Apply that to the current 18,000 coal jobs and you get total employment of 73,260. That's almost two-thirds less than the 200,000 statewide jobs cited by our senators.
Perhaps Kentuckians should apply a political multiplier and assume that everything McConnell and Paul say about coal and the environment is off by about two-thirds.
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