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This document is a presentation by Dr. Cynthia L. Duncan of the Mountain Association for Community Economic Development, Inc. (MACED) to the Kentucky Coal County Coalition on June 28, 1985, titled “Coal and Economic Development in Kentucky.”
The presentation discusses the mixed blessings of the coal industry for Kentucky’s coal counties, acknowledging its employment and tax revenue benefits while highlighting its volatility and depletable nature. MACED’s approach to economic development is introduced, emphasizing a “sectoral” strategy that researches specific economic sectors to find ways to benefit low-income individuals and communities more effectively. Examples include MACED’s involvement in the lumber industry and efforts to expand mortgage funds in Eastern Kentucky through banking.
The core of MACED’s coal project involves:
- Analyzing the impact of coal growth in the 1970s by comparing coal counties to non-coal counties.
- Conducting interviews with coal industry leaders to understand their perspectives on development problems and potential solutions.
- Analyzing historical trends and projecting future employment in the coal industry, particularly for Kentucky, indicating a likely net loss of jobs due to increased productivity despite production increases.
- Assessing the public and private benefits and costs of the coal industry in Kentucky.
A key finding is that despite significant economic growth in coal counties during the 1970s, the quality of life (measured by poverty, education, and housing) did not improve at a comparable rate to other rural Kentucky counties. This is attributed to an unequal distribution of income and work, with benefits concentrated at the top and a lack of reinvestment by both the private and public sectors. The severance tax, a significant source of state revenue, is criticized for being “consumed” rather than invested in coal-producing areas.
The presentation concludes that coal employment is unlikely to grow and that the state needs to recognize that coal growth alone, under current policies, does not lead to improved living standards in coal counties. It suggests a need for a comprehensive economic policy for the coal fields, as these communities have effectively subsidized cheap energy for the nation and the state.
An appendix includes various charts and tables illustrating:
- Kentucky coal production and employment trends (1950-1984).
- Projected coal production and employment for the U.S., Western Kentucky, Eastern Kentucky, and Kentucky (1984-1995), assuming a 4% annual productivity increase.
- Maps showing “most improved,” “most developed,” and “least developed” counties in Kentucky for 1960 and 1980 based on development indices.
- Detailed economic and social data for various coal counties, including growth, development indices, low-income families, housing, education, earnings, employment, and tax receipts.
- Results from a March 1985 MACED-commissioned survey showing Kentuckians’ support for proposals to improve coal communities, such as stricter enforcement of regulations, community negotiations with coal companies, and increasing the coal severance tax for local improvements.
