Uneven Ground (40 page)

The restructuring of the coal industry was especially hard on southwest Virginia. Coal production dropped so rapidly in Buchanan, Dickenson, and Wise counties during the 1990s that the total number of coal miners reached an all-time low of 6,900 in 1996, fewer than half of those employed in 1982. In nearby eastern Kentucky, the number of mining jobs declined from 35,000 to 15,000 during the same period. In counties where mining was once the dominant, if not the sole, source of employment, coal mining accounted for less than 15 percent of the jobs, behind construction and general trade positions. Harlan County, which had supported nearly 20,000 miners earlier in the century, employed only 1,200 in 2002. During the last two decades of the twentieth century, the number of coal mining jobs throughout all of Appalachia declined by 70 percent, falling from 159,000 to 46,000.
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Miners had lost their jobs before in the coalfields, which had always endured booms and busts in the coal market, but the disappearance of jobs in the 1980s and 1990s was permanent. Not only had technology altered the demand for underground miners, but the industry had already tapped the best seams of coal, and the deeper, thinner seams were more expensive to mine. Geologists in government agencies and universities increasingly predicted that the supply of mineable coal in Appalachia was running out and that declining reserves would
limit future production. The Kentucky Geological Survey, for example, reported in 1989 that minable coal in some areas might be exhausted in twenty years. In many places, companies were already down to mining seams that had narrowed from seventy inches to as little as twelve inches, and these thin seams were full of impurities.
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Despite the confidence of engineers that they would develop new technologies to reach deeper and thinner seams and the assurances of mine owners that the geologists were wrong, miners began to recognize that the era of big coal was gone and that fewer of the region's workers would again find employment in the industry.

The declining number of miners reflected changes in the politics and environment of coal communities. The once powerful UMWA almost disappeared as a political force in some areas of Appalachia, replicating the decline of union membership generally throughout the United States. After the election of Richard Trumka as president of the UMWA in 1982 and the ascendancy of conservative, probusiness interests in the Reagan White House, the union adopted a policy of supporting selective strikes rather than launching national strikes to shut down the entire coal industry. Trumka hoped to bring stability to the coalfields and to preserve jobs by helping American companies compete more efficiently with imported coal, but this policy of cooperation failed to halt sliding union membership. Then the A. T. Massey Coal Company in 1984–1985 and later the Pittston Coal Company in 1989–1990 broke away from industry-wide agreements in order to advance lower-wage and nonunion operations. The latter confrontation erupted as a spontaneous strike in southwest Virginia when Pittston refused to sign the union contract and brought in strikebreakers to replace picketing UMWA members. The strike resulted in the arrests of thousands of miners and their supporters and spread to more than fifty thousand miners in eleven states before reaching a compromise settlement. Pittston was permitted to continue to employ nonunion miners and to set a twenty-four-hour-a-day, seven-day-a-week work schedule. The Pittston strike signaled to smaller mining companies in Appalachia that they too could break their union contracts, and nonunion mines proliferated.
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The loss of jobs in underground mines and the decline of union membership sucked the economic lifeblood from scores of rural mountain
communities. Few of the coalfield communities had benefited much from the infrastructure and industrial development efforts of the 1970s, and the limited service jobs and branch plants that had come to nearby towns and villages paid significantly less than a miner's wage and often provided no health or retirement benefits. A small number of miners found employment driving coal trucks and bulldozers at surface mines that began to expand in parts of southern West Virginia and eastern Kentucky, but many more left their homes seeking work in the new growth centers or in towns on the perimeter of the region. Those who were able to find work in the remaining nonunion deep mines labored under deteriorating work conditions and declining enforcement of federal mining laws, with fewer health benefits.

Even the landscape itself was altered by the changing structure of the coal industry. In the heart of the coalfields, the expansion of surface mining leveled thousands of acres of mountaintops, filling in the valleys between ridges and covering the heads of creeks with rubble. Blasts from these massive operations polluted or destroyed the well water of nearby homes, cracked foundations, and raised clouds of dust that settled everywhere. The new mining technique, known as mountaintop removal, emerged through a loophole in the Surface Mining Control and Reclamation Act of 1977 that allowed mine owners to circumvent regulations requiring the restoration of land to its approximate original contour if the reclaimed land could be put to “a higher and better use.” The coal industry was quick to recognize the potential of mountaintop removal as a cheap and efficient way to create level land for economic development, and in an era when policy makers were feverish for industrial recruitment, the promise of flat, developable land in the mountains was enough to ease mining permits through the state regulatory agencies and the Army Corps of Engineers. With few exceptions, however, the promised developments never materialized, and communities were left with miles of deserted, treeless plateaus, poisoned water tables, and a permanently altered landscape. Most mountaintop removal sites were remote, and in the small number of cases where strip-mined sites were located close to population centers, the construction of shopping centers, hospitals, hotels, and small manufacturing facilities on old mine sites often ran into problems with unstable, shifting land.

Aside from the environmental destruction, increased production from surface mining generated few jobs, destroyed the area's potential for sustainable timber and tourism development, and pushed another generation of Appalachian youth out of their rural communities. By 2000 almost half of the coal mined in Appalachia came from mountaintop removal, but the growing industry's appetite for land seemed unlimited. As environmental writer Erik Reece put it, there were “now enough flattened mountains in Eastern Kentucky to set down the cities of Louisville and Lexington.”
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Despite the efforts of industry and government officials to recruit manufacturing plants to these so-called industrial parks, most remained abandoned or were later designated as wildlife sanctuaries. One site became the location of a federal prison, and another the home of a herd of elk transplanted from the western United States.

Local, state, and federal governments heavily invested public funds in making some of these mining sites suitable for development. At one valley fill location near Hazard, Kentucky, for example, more than $209 million in grants, tax credits, and local bonds were committed to build a fabricating plant that utilized timber from other surface mining sites in the production of glued wood trusses. Contractors spent $1 million of that amount to dig twenty feet down to find ground that was solid enough to build the facility.
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Several years later, the commonwealth provided another incentive package to construct a four-thousand-square-foot aluminum building for a Florida-based computer call center, which left in 2003 after the tax abatement expired, taking its 393 low-paying jobs to El Salvador.
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The wave of mountaintop destruction that swept across the central Appalachians as a result of growing urban demands for cheap electricity generated few jobs for mountain people but left a permanently scarred and wasted landscape.

As coal employment withered, attempts to recruit manufacturing facilities to the coalfields and nearby rural Appalachian communities intensified. Anxious government leaders diverted millions of dollars of public resources into the effort, but their plans were generally met with disappointment in an era of national economic transition. After taking advantage of incentive packages and tax rebates, most of the branch textile, shoe, food processing, and other small plants attracted to Appalachia in the 1980s and 1990s left the region by the end of the century,
shifting their production to offshore, even-lower-wage facilities in Latin America and Asia. A study conducted for the ARC concluded that manufacturing in Appalachia, relative to the rest of the country, looked much the same in 1992 as it had in 1967—lower wages, lower productivity, and much more reliant on branch plants.
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The fever for manufacturing recruitment, of course, was not limited to Appalachian leaders. State governments across the South expanded their marketing programs and incentive packages to bring outside jobs into rural communities. Most of the funds and the employment opportunities, however, flowed into the more prosperous regions of those states rather than into the distressed mountain counties. A study of North Carolina's economic development programs in 2003 revealed that only 7 percent of the state's industrial recruitment funds were invested in western North Carolina, despite the loss of 6,700 regional industrial jobs in that year alone.
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A similar investigation in Kentucky found that barely more than 6 percent of the corporate income tax credits granted by the commonwealth for rural economic development between 1990 and 1997 went to eastern Kentucky.
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Nevertheless, Appalachian leaders were often among the strongest proponents of these incentive programs, and by the mid-1990s, almost every mountain county had developed its own industrial park in hopes of succeeding in the increasingly competitive hunt for runaway companies.

Enthusiasm for industrial recruitment was especially strong in Appalachian Kentucky, where local officials hoped to combat job loss by attracting low-wage industry. Under the leadership of Paul Patton, a former coal operator and Pike County judge executive who was elected governor in 1992, eastern Kentucky counties launched aggressive campaigns to develop industrial sites on flat, often strip-mined land and to build speculation buildings at public expense. Patton's statewide incentive program allowed recruited companies to keep their corporate income taxes and the state income taxes paid by their workers, but even these incentives failed to fill industrial parks or to retain many of the businesses that agreed to relocate. Frequently these companies fell short of the number of jobs specified in their contracts with the state, or they closed after a few years of operation.

Harlan County's experience with industrial recruitment was typical. Beginning in the early 1990s, the state approved more than $11
million in tax breaks and incentives to recruit manufacturing companies to the county in the wake of declining coal employment. Four of the seven companies that received subsidies closed or never opened, and two more employed far fewer people than projected.
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One North Carolina company, United Glove, defaulted on its promise to provide 100 jobs after securing a $1 million tax credit and left the state. Another plant, the Sunshine Valley Farms biscuit factory, opened in 1994 promising to create 106 jobs. After employing only 7 people five years later, the company was sued by the state to recover the public's half-million-dollar investment.
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Sunshine Valley Farms was owned by two Kentucky nonprofit corporations created during the War on Poverty, the Kentucky Highlands Investment Corporation (KHIC) and the Christian Appalachian Project. Other questionable coalfield development schemes involved investments by local politicians, business leaders, and even coal-related interests. A Harlan County sock factory that had received more than $1.5 million in grants and loans failed soon after one of its owners was elected to the state senate in 1998. In Governor Patton's Pike County, the state spent $15 million over a decade to recruit, and lose, seven manufacturing facilities at a forty-three-acre industrial park, including one short-lived company that built aluminum dump trailers for hauling coal.
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The frenzy for industrial recruitment spawned dozens of private, nonprofit organizations across Appalachia designed to reduce the region's poverty by offering venture capital loans for plant construction and relocation. Among the most successful was KHIC, which, despite its Sunshine Valley Farms failure, helped to bring dozens of small plants to southeastern Kentucky in the 1980s and 1990s. Launched in 1968, KHIC initially utilized federal grant money to provide loans to companies that would create jobs in poor communities. In the 1980s it transitioned into a venture capital investment corporation, and in 1994 it wrote and received one of three Clinton administration rural empowerment zone (EZ) grants for $40 million. The only EZ grant awarded in Appalachia, it provided the pretext for Clinton's poverty visit to eastern Kentucky in 1999.
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According to one of the chief architects of the federal EZ program, the goal of the initiative was to “move beyond categorical investments in infrastructure and businesses inside the community boundaries to
building rural communities themselves, through holistic and integrative strategies.”
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Although the EZ philosophy emphasized community building through widespread participation in the planning and implementation processes, KHIC had little experience in community organizing. The Kentucky Highlands EZ was initiated, drafted, and managed by the staff of the KHIC in collaboration with a cadre of local officials who were more than happy to participate. Consequently the $40 million proposal reflected primarily the development interests of the corporation and a few powerful leaders in the three scattered rural counties.

Most of the federal investment in the EZ went to infrastructure, “downtown improvement,” job training, and the Kentucky Highlands EZ Venture Fund for loans to industry. A planned 113-acre lake failed to materialize in severely distressed Jackson County, but the EZ recruited more than 3,000 jobs, mostly in Clinton and Wayne counties, south of Lake Cumberland. Employers in the latter included a number of luxury houseboat manufacturers and Cagle's-Keystone Foods, which employed more than 1,500 workers in a chicken processing facility.
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Critics charged the EZ with using public funds to bring low-wage, dangerous jobs to the area and with employing large numbers of Hispanics and other workers from outside the county, but KHIC pointed to Cagle's-Keystone and to plants like the Mid-South Electronics facility that President Clinton visited in Jackson County as evidence of successful economic development.
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Five years after Clinton visited the Mid-South plant, however, the company closed its Appalachian operations following a fire, leaving 700 employees without work.
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Such plant closings were repeated again and again throughout the region as textiles, leather, and other small manufacturing operations abandoned the United States for cheaper offshore production.
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