The Mountain State isn’t the only place to reckon with the difficulty of transitioning away from a coal economy into something different.
West Germany emerged from World War II as one of the leading coal and steel producers in the world. Then, in the 1960s, oil emerged as a competitor, and the country found itself in the midst of an economic crisis. But there, the emergency prompted a strange and unusual alliance.
“The state government, the regional governments, the trade unions, and the employers, the industrialists, sat together and tried to find solutions to the problem,” said Stefan Moitra, historian at the German Mining Museum in Bochum in the Ruhr Valley — a densely populated valley in West Germany that’s home to five million people.
On the one hand, the coal employers were motivated to cooperate by their revenue losses. “On the other hand,” Moitra said, “it was in the interest of, obviously, the workers but also of the state to have one of the major industrial regions not falling into the darkness.”
This coalition of stakeholders eventually settled on a surprising idea — they agreed to shrink the coal industry. They merged all the coal companies into one corporation, called “RAG Aktiengesellschaft,” formerly known as Ruhrkohle AG. And the government poured lots of money into helping miners retire early. They invested in emerging industries, like auto manufacturing and tourism, to diversify the area’s economy.
They also built universities.
“Until the 1960s, there was no major university in the Ruhr. Today the universities in the Ruhr are one of the major employers,” Moitra said.
It wasn’t easy, but West Germany survived the contraction of coal and steel jobs. Then in the 1990s, the coal industry that was left declined even worse. And once again the coal companies, the government, and the unions sat down and worked out a plan to completely phase out of coal mining by 2018.
Sure enough, three years ago, the last mine in the Ruhr region, and the last “black mine” in Germany, closed.
It wasn’t a perfect solution. The Ruhr area has still faced high unemployment at times.
But the earlier transition efforts in the 1960s made this latest shift to close the mines much easier.
No Unified Plan For Appalachia
West Virginia’s economic future may hinge on what leaders do in the next few years to plan for the next 50.
But politics in the United States are different than in Europe. And when people talk about economic diversification in coal country, there isn’t a clear path forward. Should such an effort be funded by the federal or state government? Or, by private investment?
Earlier this year, West Virginia Del. Ed Evans, D-McDowell, pleaded with his colleagues in the House of Delegates to plan for a transition away from coal.
“We’ve closed Walmart. We’ve closed Magic Mart. We’ve closed everything. Y’all have no idea what my people go through,” Evans said in a speech on the House floor.
In the 1950s, his county was booming economically, fueled by coal jobs. Now, McDowell County is filled with ghost towns and ranks as one of the poorest in the country.
“I’ve asked for help many times on this floor. What have I got? Failing to plan is failing to plan,” Evans said, urging fellow lawmakers to invest a chunk of the state’s federal COVID-19 aid into helping coal communities plan for an economic comeback.
His request was denied.
How Pittsburgh Dealt With Collapse Of Steel Jobs
One way to examine this issue is by looking at neighbors to the north.
In Pittsburgh, the collapse of the steel industry in the 1980s prompted existing businesses to retool for a new reality. But it took decades. Economists predicted the decline all the way back in the 1950s, but their warnings were ignored. And the larger companies were the slowest to adjust, said Allen Dieterich-Ward, professor of history at Shippensburg University and author of “Beyond Rust: Metropolitan Pittsburgh and the Fate of Industrial America.”
“The bureaucracies that develop in large corporations are not known for their flexibility and their ability to quickly adapt to new situations,” said Dieterich-Ward.
Smaller companies are more adaptable, and they were a big part of Pittsburgh’s renewal. Aided by lots of government funding, as well as help from philanthropic organizations, entrepreneurs created smaller start-up industries in tech, the arts, and restoration of the city’s historic resources.
“Pittsburgh really [became] a laboratory for what and how to save the past in a way that allows it to be integrated into the future,” Dieterich-Ward said.
Some businesses in West Virginia already are reinventing and reimagining themselves, according to Derek Scarbro, business development director at the Robert C. Byrd Institute at Marshall University in Huntington.
“Companies are definitely more and more interested in learning how they can broaden their base,” Scarbro said.
The RCBI opened 31 years ago with funding from the Department of Defense to assist defense contractors in the region, and to support workforce needs for advanced manufacturing.
Today, it works with large scale businesses, as well as small entrepreneurs. Business owners can use 3D printing and other machines at the center to help revamp their business.
A mining equipment company based in Nicolas County uses the equipment to make mounts for outdoor cameras. “And they’re selling them online and they have done extremely well with that,” said Scarbro. “Talk about a pivot, going from mining equipment servicing to outdoor cameras.”
These are small glimmers of signs that entrepreneurs are moving towards retooling. But many are still reluctant, Scarbro said.
Attracting Investors
Avinandan Mukherjee, interim provost at Marshall University, said he sees an increasing number of venture capitalists looking to Appalachia to invest. “And there is a lot of interest in our part of the country in terms of what these ideas are, and which ones can win.”
When West Virginia Public Broadcasting interviewed Mukherjee in July, he pointed to a company called App Harvest, which specializes in growing hydroponic vegetables on former strip mines and has attracted investors from all over the country. A month after the interview, AppHarvest reported a net loss of $32 million in its second quarter. Following this announcement, stocks in the company plummeted.
West Virginia also falls behind in other aspects of infrastructure, including roads and bridges. One national study gave the state a D. A few communities, like Keystone and Northfork, in McDowell County, even lack access to potable water.
Mukherjee also mentioned Ascend West Virginia as an effort that could have lasting impacts. The program offers virtual workers $12,000 to relocate to West Virginia. About 7,500 people applied to the program this year, and 53 were selected.
Over the next 20 years, Mukherjee said he expects West Virginia to see an increase in virtual jobs like cyber security and software engineering.
Employers are already hiring in these sectors, said Natalie Roper, executive director for Generation West Virginia. But “very often they have job openings and are struggling to get qualified applicants.”
When Roper’s organization created a fellowship program to match qualified employees with employers, half of the jobs were in software development, and most were virtual. That poses a problem in some areas of West Virginia, where there is a lack of high-speed broadband.
According to the West Virginia Broadband Enhancement Council, the Mountain State ranks third-lowest for broadband access, and 30 percent of rural residents are without an internet connection in their homes.
A Bottom-Up Approach
West Virginia also falls behind in other aspects of infrastructure, including roads and bridges. One national study gave the state a ‘D.’ A few communities, like Keystone and Northfork in McDowell County, even lack access to potable water.
Priya Bascaran, assistant professor of law at American University and director of the school’s Entrepreneurship Law Clinic, said she thinks that without these essentials in place, the state won’t be able to keep people from fleeing.
“If we give them an employable skill, and they don’t have good, safe water, or a decent road, of course, they’re going to take this skill and leave town,” Bascaran said.
Bascaran has worked with communities across the country that are dealing with a hollowing out of jobs, and people.
She said leaders often neglect to ask people what they actually need and want.
“And when you turn that conversation internally, you really see that, maybe, what people really want is a grocery store,” Bascaran said.
She wonders if helping people get grocery stores, or better water infrastructure, could be where economic development begins.
“What if instead of training people to be coders, we trained people to be wastewater engineers, or water system operators,” Bascaran said. “Because there’s a real need for that in West Virginia and greater Appalachia.”
Not Enough Investment In Appalachia
Jim King is the president and chief executive of Fahe, a network of more than 50 nonprofits that funds about $330 million each year in projects throughout Appalachia. But he says much more investment is needed, and he adds that philanthropy and other institutions of wealth lag behind.
“There is a historic disinvestment in West Virginia and Appalachia,” King said. “And not only was the coal taken out, but the wealth went with it. And other parts of the country benefited.”
King estimates that it would take nearly a billion dollars a year just to get West Virginia at the same economic playing field as the rest of the country.
Jobs In Mine Land Cleanup
The coal industry in West Virginia has also left behind thousands of acres of land in need of reclamation. In Germany, years of ongoing work to undo environmental damage, and infrastructure decay, have provided needed jobs, said Christian Wicke, assistant professor in political history at Utrecht University in the Netherlands.
Wicke specializes in communities that have moved away from an industrialized economy, like in the Ruhr region of Germany.
“You have to imagine the Ruhr region as is hollowed out like Swiss cheese with lots of mines,” he said. “And it’s incredibly difficult to organize a water system.”
Wicke helped edit a book with Stefan Berger called “Industrial Heritage and Regional Identities,” which explores the connections that heritage has with regional identities.
Wicke said Germany hasn’t buried its coal and steel history. In fact, they’ve built museums about it. Artists have built steel statues on former mining sites, that now attract millions of tourists a year.
“One might argue if you have a good job that the region is more livable than ever before,” Wicke said.
Back at the museum of mining, Moitra, the historian, said that some of the older miners in West Germany say they miss what mining was.
“But they all they are also very aware the times are changing,” Moitra said. “What many find important is that they can be sure that their kids and their grandkids can work and live without having to move away.”
Those words ring true in Appalachia as well, where many worry about sustaining the next generation.
The losses in both places go deeper than economics. Cultural identities are deeply woven into the fabric of societies in places that have predominantly been fueled by coal. Finding new realities and retooling the economic landscape means these cultural ties also have to be reimagined.
“One might argue if you have a good job that the region is more livable than ever before,” Wicke said.
Back at the museum of mining, Moitra, the historian, said that some of the older miners in West Germany say they miss what mining was.
“But they are also very aware the times are changing,” Moitra said. “What many find important is that they can be sure that their kids and their grandkids can work and live without having to move away.”
A former miner in the Ruhr region of West Germany told historian Moitra in 2017: “You cannot turn everything into a museum, that’s for sure.”
Said Gottfried Clever, who began working in the coal industry in 1977: “In the beginning we joked with bitter irony: ‘Well, we can create new jobs if we travel the Ruhr region as museum miners. So we’ll all be a museum ourselves. And people can visit us as a vanished reality.’”
Clever worked in several coal mines in the Ruhr, including the Walsum colliery in Duisburg, Consolidation and Hugo in Gelsenkirchen, and Ewald in Herten.
As in Germany it will probably take many decades, or even generations, for Appalachia to get through this transition to the other side — and what that other side looks like is still unknown. But what’s certain is that planning for that future will probably help the state have a better outcome.
In 1986, the city of Essen in West Germany closed its last mine.
Now, 35 years later, this region has a labor participation rate of 71 percent, more than 25 percent higher than West Virginia’s workforce rate of 55.2 percent, the lowest in the United States.
The highest number of employed people in Essen today work in the service sector, followed by manufacturing, forestry and agriculture.
If people in West Virginia decide to follow Germany’s lead, it’ll mean those from different industries and leadership roles agree on a plan. Most importantly, they’ll have to figure out a way to support coal miners, and their families, in the years to come.
Tom Hansell from the After Coal project and West Virginia Public Broadcasting’s David Adkins contributed to this report.
