As a candidate, President Donald Trump made many promises on how he was going to create millions of jobs. In May, 2016 at rallies in Pennsylvania, West Virginia, and Ohio, he pledged “bring back” coal jobs by reducing burdensome environmental regulations that would lead to more demand for coal. These words helped him carry West Virginia and Kentucky by large margins, win comfortably in Ohio, and squeak by in Pennsylvania.
This is one promise that will be tough to keep. Even if Trump managed to dramatically increase demand—down 23 percent since 2007—an uptick in consumption would still create far fewer jobs than Trump might think. Improvements in productivity have increased tenfold since 1950, meaning that coal companies can produce a lot of coal with far fewer workers than it once did.
Let’s look at the history.
There was only a brief moment of time when coal was a major U.S. employer. The height of the industry was in 1920, when coal employed nearly 800,000 workers. Today, the industry’s workforce is only 8 percent of what it was in 1920, with about 66,000 employees. Moreover, this decline in employment took place at the same time that the overall size of the U.S. workforce more than tripled—from more than 40 million workers in 1920 to over 140 million in 2013.
Despite this huge decline, however, total output of coal is up by 40 percent.
The table below shows how output has increased while employment has decreased because of rising productivity from 1920 to 2015. The huge jump in productivity between 1980 and 2000 is due to the rise of surface strip mining as an alternative to underground drilling. Instead of creating mining shafts several hundred and to a few thousand feet underground and then using trolleys to bring the coal to the surface, strip mining uses bulldozers to flatten mountains and extract the coal from the debris.
Patterns in American coal consumption have also changed dramatically over the years, which make a reversal in demand unlikely. First, in the beginning of this period, many houses used coal for heating; but today, according to the Department of Energy, virtually all coal is used to produce electricity in big power plants. Second, we do very little international trade in coal—we import about 1-2 percent of our needs and export about 10 percent of production. Third, the advent of fracking has made coal less competitive compared to national gas.
Coal production reached its peak in 2007 at 1.2 million tons. Since 2007, there has been a steady decline to 900 thousand short tons in 2015. The main causes of this decline are the increased availability of low-cost natural gas from fracking and the increased use of the renewable resources of solar and wind energy.Of course, these trends were consciously assisted as part of an environmental policy to reduce coal consumption because of its high emission levels of greenhouse gases. While the new technologies to produce “clean coal” with lower emissions may take some of the environmental cost out of coal production, the upside of coal production is quite limited because of cheap natural gas and the general movement to a more energy-efficient economy.
So, ‘bringing back coal jobs’ is a typical Trump initiative, much like the Carrier deal that saved 800 jobs, in that it is big on atmospherics and small on actual employment. Currently, coal employment is five one-hundredths of one percent of all employment. It is hard to see how a new Trump plan could do anything more than raise this total to six one-hundredths of one percent of employment. It is certainly possible that there will be no gain in employment because the increased use of strip mining due to higher coal demand could return productivity levels to their 2000 level.
The better promise Trump should have made to coal country is to offer employment retraining and other economic development initiatives for rural workers. In general, the decline of coal employment was driven by productivity gains that are good for the economy as a whole and that can’t and shouldn’t be reversed. Trump has made the same promise about increasing manufacturing employment, which has lost 5 million jobs from the 17 million that existed in 2000. This is a more fertile area to make change, but still, many of the same forces are at work. Trump wants to Make America Great Again, but his haphazard ambitions to increase working class employment are hardly a recipe for success.