The roughly 13,000 U.S. auto workers now on strike could affect West Virginia car dealers and customers in several ways.
The roughly 13,000 U.S. auto workers now on strike could affect West Virginia car dealers and customers in several ways.
Jared Wyrick, president of the West Virginia Auto Dealers Association, said striking workers representing all three Detroit automakers are targeting and shutting down plants.
“They’re targeting plants that make the more profitable vehicles, while minimizing the impact of the UAW strike fund,” Wyrick said. “They spared certain factories that produce the number one selling vehicles like the Ford F-150 and the Chevy Silverado and the RAM pickups. That leaves the union the option to make more damaging moves if the strike drags on.”
Wyrick’s association represents about 100 West Virginia car dealers. He said a prolonged strike will reignite an inventory challenge just now beginning to recover from pandemic supply chain issues.
“We were finally getting back to some normalcy, to pre-pandemic levels,” Wyrick said. “So, yes, this absolutely will exacerbate the problem.”
Labor and management remain far apart on proposed salary and benefit increases. The UAW demand is a 36 percent wage increase over four years. GM and Ford offered 20 percent and Stellantis, formerly Fiat Chrysler, offered 17 percent.
Wyrick said pay raises and higher car prices ultimately will come down on the backs of the consumer.
“They’re going to end up paying a good share of what this bargaining will end up being,” Wyrick said. “You will see an increase in prices based on what’s bargained and agreed upon.”
Wyrick said high interest rates are the largest impediment right now in selling vehicles, and a prolonged strike will push monthly payments even higher.
Standing at the site of a long-abandoned, multimillion dollar industrial park in November 2016, U.S. Rep. Hal Rogers urged residents in southeastern Kentucky’s Bell County to envision the tourism potential for miles of open land.
Joined by Matt Bevin, then Kentucky’s governor, and local politicians, Rogers pointed to the expanse of forestlands and mountaintops in the distance as he unveiled a $12.5 million federal grant for the Appalachian Wildlife Center. Rogers, a Republican who represents the state’s Appalachian region, had helped secure the money through the Abandoned Mine Land Pilot Program, a federal initiative designed to foster economic development around former coal mine sites in Kentucky and other states.
The proposed state-of-the-art facility would include a museum and local artisan market where visitors could learn about nature. The center’s biggest attraction: the elk that roam the area.
“Let me assure you this is a worthy project that we are investing in,” Rogers said during the gathering. “The Appalachian Wildlife Center has the potential to transform tourism in our region. There is no place in the country with a better story than eastern Kentucky.”
Nearly four years after the announcement, and three years after the wildlife center was first supposed to be completed, the land is still largely untouched except for a few pens to hold elk and some water utility construction. The projected infusion of hundreds of thousands of tourists has not materialized. And Bell County residents, a third of whom live in poverty and fewer than 1 in 10 of whom have a college degree, are still waiting for an influx of jobs from yet another effort promising to help the area recover from the decline of the coal industry.
The AML Pilot Program, created in 2015, is among the latest efforts that pledged to change the fate of eastern Kentucky. State and federal leaders have directed hundreds of millions of dollars to the region over the past 50 years as part of multiple economic revitalization efforts.
Those investments have resulted in some improvements, including new hospitals and other health care facilities, job-training programs, and some businesses that have come and stayed. But many projects haven’t lived up to expectations, leaving residents waiting for an economic lifeboat that never seems to arrive.
Stacy Kranitz, special to ProPublica
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Downtown Pineville, Kentucky, a small town in Bell County near the future site of the Appalachian Wildlife Center.
Since its inception, the AML Pilot Program has awarded $105 million to 43 projects in the state with little vetting. Some projects like the wildlife center have taken far longer to complete than promised, with no consequences. And lofty projections for job creation, visitation and tourism revenue made by the wildlife center and other projects went largely unchallenged by the state, the Kentucky Center for Investigative Reporting and ProPublica found.
An industrial park in Martin County was awarded $3.37 million in September 2019 even after a consultant warned that the project had “fatal flaws,” including its location near a federal prison. Two other industrial parks that received funding have already lost, or are at risk of losing, major businesses after pledging large numbers of jobs and related economic growth.
And a $2.5 million grant to Harlan Wood Products LLC in 2016 was tabled after the company was unable to obtain additional private funding. The Harlan County business, which is now dissolved according to the Kentucky secretary of state’s office, had planned to produce wood pellets for biomass fuel, employ up to 35 people and create about 60 indirect jobs.
For the wildlife center, pledges of economic turnaround soared even as the projected opening date was repeatedly delayed. The center is now expected to open in June 2022, according to the Appalachian Wildlife Foundation, the nonprofit organization that is responsible for its construction.
“We’re actually building it. Nobody’s ever done anything for tourism like we’re doing,” said David Ledford, president and CEO of the nonprofit foundation. He said project delays have been primarily due to construction challenges on the reclaimed mine site and a request by federal authorities for an additional environmental assessment. The coronavirus pandemic also has pushed back construction, according to recent reports submitted to the state by the foundation.
The federal Office of Surface Mining Reclamation and Enforcement, which oversees the distribution of AML Pilot Program funding to states, did not respond to a request for details about its application review process. But three officials familiar with the process, who aren’t authorized to speak publicly, told KyCIR and ProPublica that the agency does no independent scrutiny of grant applicants’ claims.
Stacy Kranitz, special to ProPublica
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A pawnshop window in downtown Pineville.
State officials also could not provide KyCIR and ProPublica with records showing that they verified the tourism and job projections. In fact, a committee appointed by the state Energy and Environment Cabinet secretary has helped to dole out millions in taxpayer dollars without maintaining any records of discussions or votes, as required for public bodies, KyCIR and ProPublica found.
The committee, which helps determine how the program’s federal tax dollars are spent, is not required to comply with state transparency laws, according to state officials who argue that it is not a public agency because it serves in an advisory capacity to the cabinet secretary.
State and local programs across the country that offer incentives for economic development repeatedly come under scrutiny for failing to achieve job creation and revenue benchmarks.
The AML Pilot Program falls within a gray area that sometimes escapes deeper examination.
The federal government has gradually given states more decision-making authority over grant distribution and oversight, said Brett Theodos, a senior fellow and director of the community economic development hub at the Urban Institute in Washington, D.C.
But the AML Pilot Program stands out because the federal agency responsible for distributing the funds does not appear to have provided clear parameters and measurements for success, he said.
“The lack of expert decision-making, public meetings or outcome tracking makes (the AML Pilot Program) open for abuse,” Theodos said.
Disney-like Experience
The announcement on building the wildlife center came nearly two decades after the failure of an industrial park project on the same site.
The state spent more than $10 million to buy the land, build a bridge over the Cumberland River and run a three-lane, paved road up to the mountaintop, where the industrial park would be located.
But no industry came. The park sat empty for more than a decade.
Stacy Kranitz, special to ProPublica
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This sign is all that remains of a proposed industrial park. Nearly two decades later, the Appalachian Wildlife Center would choose to build on the same site.
Then, in 2014, Ledford announced plans to construct the Appalachian Wildlife Center. At the time, Ledford said he was considering five counties as potential locations for the center, which would be funded solely through private donations.
The following year, Ledford chose Bell County.
Ledford said in 2015 that the project, which would encompass 12,000 adjoining acres, would draw 580,000 visitors and generate more than $113 million for the region in its fifth year in operation. “We will not seek any government funding for the project. It will be funded thru private donations,” Ledford said in a news release that projected a 2017 completion date.
After three years of operating at a net loss, the Appalachian Wildlife Foundation sought to bolster funds for the center by seeking an AML Pilot Program grant.
In an application filed in 2016 by the county, the foundation offered more ambitious tourism numbers than it had a year earlier. Not only would the center draw 638,000 visitors in its fifth year in operation, it would spur the creation of more than 2,000 jobs in the region.
Ledford did not respond to a request to explain why he sought government funding after vowing not to do so. He has said that the state and federal governments vetted the economic projections.
But hundreds of pages of federal and state documents related to the Appalachian Wildlife Center project show no indication of any independent assessment or critical vetting by the state or the federal government of the tourism and job creation projections. At least three federal documents, including a 2019 report, repeat almost verbatim the project application’s claims for visitation, job creation and revenue generation.
In 2019, foundation leaders estimated that the center would open in June 2021. By its third year, it would make $8.5 million after operating expenses, they said. The projection was based on new estimates of 850,000 visitors annually, starting in its third year, and average per visitor spending of $44 on admission fees, food and gift shop items.
“We’re going to build a first-class tourism destination and we’re going to deliver a Disney-like experience,” Frank Allen, a foundation board member, said during a presentation last year. “I know it sounds ambitious and it is but, bear with me, at one point so was Disney World. Ultimately, all you need is a great plan and a lot of money. We’ve got the plan and most of the money.”
A screenshot of Kentucky Gov. Matt Bevin’s Facebook post in 2016 announcing the Abandoned Mine Land Pilot Program grant for the Appalachian Wildlife Center and showing the proposed rendering.
Stacy Kranitz, special to ProPublica
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Four years later, the future site of the visitor center still lies empty.
The Appalachian Wildlife Foundation’s tourism projections exceeded by nearly 300,000 the number of visitors last year to western Kentucky’s Mammoth Cave National Park, one of the region’s leading tourist attractions and home to the longest-known cave system in the world.
Ledford said the projections stem in part from his belief that the wildlife center will generate more visitors and revenue than the Keystone Elk Country Alliance in northwest Pennsylvania, which was created in 2009. The facility attracts more than 481,000 people annually, according to its website.
The wildlife center hopes to capitalize on tourists traveling to other destinations, including resorts such as Pigeon Forge, a mountain town two hours away in eastern Tennessee that is home to Dollywood, and Hilton Head Island in South Carolina, which is a seven-hour drive from Bell County. About 94% of the center’s visitors would be from outside the state, according to the foundation’s estimates.
“Our visitors are not going to spend three or four days here,” Ledford said in an interview. “It’s not the end destination. It’s a stop on the way to someplace.”
Jeffrey Larkin, an Indiana University of Pennsylvania professor who teaches ecology and conservation, is skeptical that the wildlife center will be able to live up to its projections.
Stacy Kranitz, special to ProPublica
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An elk pen at the future site of the Appalachian Wildlife Center in Bell County, Kentucky.
“I would say that the challenges that lie before the Kentucky facility would be, ‘If you build it, would they come?’” said Larkin, who received his master’s and doctoral degrees from the University of Kentucky and who once conducted fall elk tours in the Appalachian area of the state. “It’s in a part of Kentucky that’s not often visited by a lot of people.”
A New Program, Another Promise
Nestled in the southeastern corner of the state at the juncture with Virginia and Tennessee, the land that would become Bell and Harlan counties was cemented in the region’s history when frontiersman Daniel Boone blazed a trail through the Cumberland Gap in 1775.
The counties also reflect in many ways the Appalachian region of which they are a part: They are breathtakingly beautiful, largely rural, overwhelmingly white and significantly poor.
The remote counties, among 38 deemed economically distressed in eastern Kentucky, have long wrestled with high poverty and unemployment rates. But a struggling coal industry hastened economic contractions for rural communities in Appalachia.
In the past decade, coal production in the state’s Appalachian region dropped from 67 million tons to 13.6 million, forcing the elimination of most mining-related jobs, which plummeted from 13,000 in 2010 to 3,400 in 2019.
“Coal’s hold over eastern Kentucky has long dampened creativity, long-term planning, alternative economic development, the ability to think in terms of the public good rather than personal gain and adequate taxes with which to support public infrastructure and services,” said Ronald D. Eller, former director of the Appalachian Center at the University of Kentucky and a retired history professor.
Rogers, the politician who earned the nickname “Prince of Pork” because of his success earmarking funding for his district, has been at the center of many of the infusions of federal dollars for the region he represents. In June 2015, he chaired the U.S. House Appropriations Committee, which pushed for the AML Pilot Program as part of the U.S. Department of the Interior and Environment Appropriations Bill.
Lawmakers created a new pot of money, setting aside $90 million in 2016 to create new job opportunities and stimulate the economies of Kentucky, Pennsylvania and West Virginia by developing reclaimed mine sites. The program later expanded to include three additional states and three Native American tribes.
The federal government distributes the money but allows state officials to develop their own criteria for selecting the projects and monitoring their progress.
“This is a thoughtful alternative to help hard-hit communities reinvigorate their economies by using abandoned mine land to develop hospitals, community centers and much more,” Rogers said in a June 2015 news release after his committee’s approval.
Rogers has since promoted the program as a key economic driver in Appalachia. In a 2018 news release, he called it “one of the most successful job creation and tourism initiatives that we’ve ever had in Eastern Kentucky.” At the time, none of the projects had been completed.
Rogers defended the money spent on various projects that have drawn limited results.
“There isn’t a silver bullet that can lift our region out of generational poverty, and none of our local officials who have applied for an AML grant believes that one project in an industrial park or an exciting new tourism project will lift their county out of poverty,” Rogers said in an email.
Kentucky officials acknowledge that the state’s oversight of the projects focuses on planning and construction, not on expectations for economic development. Once construction is complete, state oversight largely ends, leaving no consistent accountability system for measuring whether the investments drew promised economic changes to the area.
Stacy Kranitz, special to ProPublica
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A coal miner’s flag hangs in the front yard of a home in Middlesboro, Kentucky.
John Mura, a spokesman for the state Energy and Environment Cabinet, said the administration of Gov. Andy Beshear is committed to helping to improve the economy in coal communities and considers the AML Pilot Program an effective tool.
While agreements with grantees do not clearly articulate oversight responsibilities once projects are completed, Mura said the cabinet “may require that the grantee continue to submit an annual report on various metrics such as job creation.”
“This program has brought a good measure of economic vitality to eastern Kentucky in the past four years and there is every expectation that under the Beshear administration, it will continue to produce new jobs and new economic vitality in this part of the state,” Mura said in an email. He did not respond to questions about which circumstances might trigger the request for annual reports.
Mura pointed to two projects that he said have led to an additional 44 jobs in eastern Kentucky.
Dajcor Aluminum, a business operating in the Coal Fields Regional Industrial Park in Perry County, has hired 31 employees since the county received a $6.5 million AML Pilot Program grant in 2018 to buy equipment for the company. SilverLiner, a tanker truck manufacturing company, also has hired 13 employees, Mura said. The company is located in Pike County, in the Kentucky Enterprise Industrial Park, which received a $5 million AML Pilot Program grant in 2016.
James P. Ziliak, an economics professor at the University of Kentucky, said the eastern part of the state could be in worse shape without government investments such as the AML Pilot Program. But he worries about the lack of a broader strategy.
“It’s kind of a failure of economic development policy,” Ziliak said. “A lot has been spent, but has it been spent in the right places? And there have been a lot of empty promises over the years.”
Banking on Tourism
The Appalachian Wildlife Center is not the only tourism project in eastern Kentucky banking on big promises to uplift the region.
A Letcher County nonprofit, the EKY Heritage Foundation Inc., was awarded two AML Pilot Program grants totaling nearly $3.5 million in 2018 and 2019 after promising to transform more than 100 acres of “stagnant land” into Thunder Mountain, a “world-class” sport-shooting and archery resort park. The park would draw an estimated 40,000 annual visitors, according to the nonprofit’s application.
The completed project would employ 40 to 50 people and include shooting ranges, campgrounds with cabins, an amphitheater and a training site for law enforcement and the military.
The application offers no supporting evidence that Thunder Mountain could attract the number of tourists it projects. And while the application asserts that Thunder Mountain would be a “valuable resource” for personnel at a federal prison to be built in Letcher County, plans for construction of the prison were shelved last year.
Missy Matthews, president of Childers Oil Co. and of Double Kwik, a chain of more than 40 convenience stores and gas stations in the southeastern Kentucky region, formed the nonprofit that proposed the project. She did not respond to interview requests.
State Rep. Angie Hatton of Whitesburg, an EKY Heritage Foundation board member, declined to discuss claims for the project in detail. She provided a statement that she attributed to Sally Oakes, a Childers Oil Co. employee who served as the foundation’s grant writer.
“The estimates in the grant application are based on various sources of information including reports, journals and magazines as well as communications with other owners/operators of shooting ranges,” the statement said. Oakes could not be reached for comment.
About 130 miles northeast of the proposed site for Thunder Mountain, another tourism-related project, in eastern Kentucky’s Boyd County, received a $4 million AML Pilot Program grant after pledging to double the number of visitors for an existing off-road park.
The grant, awarded in 2017 to Boyd County government, would assist with water, sewer and road improvements intended to primarily benefit Rush Off-Road, a for-profit business owned by E.B. Lowman III, who also is president of a real estate company in eastern Kentucky.
In its application, Boyd County government officials said the improvements would help the park increase to 100,000 the number of visitors. It did not provide a timetable for the increase and offered no evidence or documentation to support the claim.
Project documents cite, but do not include, a market research study by Marshall University in West Virginia, which Lowman said found that the park had a $5 million-plus economic impact on the county in 2017. Lowman declined to provide KyCIR and ProPublica with a copy of the study, and university officials said they were unable to find one.
Boyd County officials did not respond to repeated requests from KyCIR and ProPublica to discuss the project. Federal and state officials did not reply to specific questions about the project.
Shawna McCown said she struggles to understand how the four-wheelers roaring by her house in Rush, Kentucky, will help her or her neighbors.
“They’re saying it’s going to help the community, but we don’t see any benefit for us at all,” McCown, a schoolteacher, said of the project. “How does that help me? I want a community center, a library.”
Residents Left Waiting
Stacy Kranitz, special to ProPublica
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Cynthia Gooch and her niece in an unfinished park in Pineville. Pineville and other towns in Bell County have struggled with unemployment and poverty.
By now, the Appalachian Wildlife Center, which has rebranded itself as Boone’s Ridge, was supposed to be pumping millions of dollars into Bell County. It was expected to have created more than 1,000 direct and indirect jobs in the region, as many as the county’s two largest employers combined: Smithfield Foods, which produces a variety of hams and smoked meats with 500 workers, and the Bell County school system, which has about 430 employees.
Instead, a countdown clock on the project’s website winds down to the most recent opening date: 593 days away.
Meanwhile, Rome Meade, a 26-year-old who lives in the area, has for six months hunted for a full-time job without success.
“I believe it’s gonna turn around,” Meade said. “At least I hope so.”
He’s better off than some. He draws a salary as pastor of the Winchester Avenue Church of God in Middlesboro. And he, his wife and their two young children live rent-free in the church parsonage.
Meade makes too much money to qualify for food stamps or most other government benefits, except for health care.
“I want a job. I’ve always worked, but I can’t get no help,” Meade said.
Meade wishes the government would focus more on helping create well-paying positions that will allow him to stay in the area and not “on things that don’t matter, like an industrial park.”
“All of the tax dollars are going for things that people see no benefit to,” Meade said. “They’re getting frustrated. People are bustin’ their tails, trying to make a living for their families.”
R.G. Dunlop is an investigative reporter for the Kentucky Center for Investigative Reporting. His work has exposed government corruption and resulted in numerous reforms. Email him at RDunlop@louisvillepublicmedia.org and follow him on Twitter at @rgdunlopjr.
This story was produced in partnership with ProPublica, a nonprofit newsroom that investigates abuses of power, and the Kentucky Center for Investigative Reporting, which is a member of the ProPublica Local Reporting Network.
Is West Virginia falling significantly behind in the job skills required for today’s economy? West Virginia University President E. Gordon Gee said so in an address to students at Musselman High School in Berkeley County.
Gee’s office told PolitiFact West Virginia that they could not point to the original source of the statistic. However, we were able to reverse-engineer data that falls short of Gee’s number.
This gets a bit complicated, so bear with us. Here’s the overall concept. First, we’ll estimate the total number of job openings in West Virginia that require skilled workers. Then we’ll look into how hard these jobs are to fill, based on the educational shortcomings of West Virginia’s workforce.
How Many Job Openings In West Virginia Require Advanced Skills?
On the job openings side, Brian Lego, a research assistant professor at WVU’s College of Business and Economics, suggested we look at data produced on an experimental basis by the Bureau of Labor Statistics, the federal government’s chief agency for employment statistics.
This data in question is a spinoff of the longstanding Job Openings and Labor Turnover Survey, which produces monthly estimates of job openings, hires, and employee departures on a national basis. For several years, the bureau has also produced an experimental study of this data on a state-by-state basis, which is what Lego was referring to.
We looked at the most recent data for West Virginia, which covers the first six months of 2019. We found that in each of those six months, West Virginia had 38,000 job openings. (BLS acknowledges that this is an estimate, though the agency says it isn’t sure what the margin of error is.)
This 38,000 figure represents all job openings in West Virginia — not necessarily those requiring advanced skills.
However, we found a way to estimate the percentage requiring advanced skills, using data in a report published by Georgetown University’s Center on Education and the Workforce. The report is from 2010, but it offered projections for the share of jobs in every state by 2018 that would require various levels of educational attainment, so it should offer a rough guide.
For West Virginia, the report said, 9% of jobs would be open to high school dropouts, 38% would require a high school degree, 12% would require some college but not a college degree, 15% would require an associate’s degree, 17% would require a bachelor’s degree, and 8% would require a master’s degree or higher.
All told, the Georgetown data sees 25% of jobs requiring a bachelor’s degree or higher. And 25% of 38,000 job openings in West Virginia works out to 9,500 job openings in any given month that require a bachelor’s degree.
How Big Are The Educational Shortcomings In West Virginia’s Workforce?
This 9,500 figure refers to the number of high-skill job openings in West Virginia — the demand side. What about the supply side — the share of West Virginia workers who have the necessary skills to fill those jobs?
We found a way to estimate that number, too.
Statistics from the U.S. Education Department show that in 2016, about 21% of West Virginians age 25 and up had a bachelor’s degree. Meanwhile, in October 2019, West Virginia had 38,052 unemployed workers.
If one assumes that this group of unemployed workers is a representative cross-section of the state’s educational attainment patterns, this would mean there are just under 8,000 unemployed West Virginians who could fill a job requiring a bachelor’s degree. But in reality, better-educated workers tend to be more likely to be employed, meaning the actual number of unemployed workers with a bachelor’s degree is probably well below 8,000.
Tara Sinclair, a George Washington University economist, told PolitiFact West Virginia that a reasonable guess is probably 4,000.
So of the 9,500 West Virginia job openings requiring a bachelor’s degree, qualified workers who are currently unemployed could potentially fill a 4,000 of those. That leaves 4,500 bachelor’s-level jobs unfilled.
And that’s quite a bit smaller than Gee’s 20,000 figure.
Some Caveats
We should emphasize that our estimates involve a lot of moving parts, each with a source of statistical error.
We also focused on bachelor’s-level jobs. If we were to instead define “skilled” positions as requiring at least some college experience, the supply of skilled jobs could go as high as 53%, according to the Georgetown University data. That works out to 21,400 jobs requiring advanced skills, rather than 9,500. Using this broader number could make Gee’s figures closer to accurate.
Finally, we should note that in the Georgetown comparison, West Virginia ranks 51st in the nation — dead last among the 50 states and the District of Columbia — in the percentage of jobs requiring advanced skills. So West Virginia may require advanced skills to fill many of its jobs, but the pressure to fill these advanced-skill jobs is weaker in West Virginia than it is in every other state.
“Gee’s argument could have been better supported by focusing on the deficit of college educated workers in West Virginia compared to the rest of the U.S. — 21% versus 31%,” Sinclair said. “That seems to be a really big problem. That might actually be the driver of West Virginia’s ranking in terms of jobs requiring college degrees: Employers go where the workers are.”
Our Ruling
Gee said, “In West Virginia, we have 20,000 jobs in which we don’t have skilled workers.”
Gee has put his finger on what experts say is a genuine concern for West Virginia — the mismatch between educational attainment and skills requirements for job openings — but he’s overestimated the specific figure.
He was unable to back up this figure, and when we tried to come up with an estimate, we found that the number is probably around 4,500.
The U.S. Census Bureau released data last week that showed the percentage of Americans living below the poverty line went down for the first time since the Great Recession of 2008.
Overall, the number of people living in poverty, nationwide, decreased by half a percentage point from 2017 to 2018 covering nearly 1.5 million people.
“We saw some really good news that for the fourth straight year in a row, poverty went down in the United States. But it remains unacceptable that 38 million people still live below the poverty line,” said Amelia Kegan, the Legislative Director on Domestic Policy for the Friends Committee on National Legislation.
The national poverty line is set at about $25,400 for a family of four. The U.S. poverty rate stands at 11.8 percent. But West Virginia is still lagging behind.
“West Virginia ranked number four when we’re looking at poverty rates over 2017 and 2018. And so, it is significantly above the national average of a two year average of about 16.5%,” Kegan said.
Two of the most powerful anti-poverty programs are the earned income tax credit and the child tax credit, preventing 7.9 million people from falling into poverty, including 4.2 million children according to Kegan. Another vital tool is the Supplemental Nutrition Assistance Program, or SNAP.
“The data also showed that the SNAP program, formerly known as food stamps, prevented about 3 million people from falling into poverty back in 2018,” she said.
More than 340,000 people in West Virginia receive SNAP benefits each month, according to the U.S. Department of Agriculture. The participation varies by parts of the state, however. In the first congressional district, about 13 percent of all households receive SNAP.
In the second congressional district, about 15 percent of households receive SNAP benefits. In the third congressional district, that number climbs to 22 percent of all households.
West Virginia is home to numerous beverage companies that brew beer, distill spirits and syrups and press cider. The state also boasts farmers who produce fruits and grains those bottlers could use.
The problem is the two groups are often disconnected.
The “Craft: Farm to Bottle Summit” in South Charleston earlier week this aimed to address that gap, bringing the two groups together and helping each understand the other’s needs. The Robert C. Byrd Institute (RCBI) in Huntington organized the summit. More than 100 people attended.
Changes to state laws in recent years have made it easier for bottlers and manufacturers to open new businesses, according to Bill Woodrum, the Director of Entrepreneurship for RCBI.
“The next step we see for that is helping those local bottlers whether it’s anything from kombucha to soft drinks to beer, wine, spirits, to be able to identify local sources for their product,” Woodrum explained.
Alex Duran, assistant operations manager from Greenbrier Valley Brewing Company was excited about the possibilities coming out of the summit.
“For us it’s very important that you use West Virginia first. Not to outcast anybody from the other states, but from our perspective this way it highlights some of the smaller communities in our area,” he said.
Both groups are small and face unique economic restrictions and challenges. They need to simultaneously grow product demand and produce production. It’s tricky and takes coordination. An example from the conference was a farmer just can’t just show up with a ton of strawberries. Brewers need to know weeks in advance when the fruit will be ready so they can plan their production schedule.
Charles Bockway, a reporter who covers the West Virginia beverage industry, said the economic landscape is shifting and becoming more hospitable to small manufacturers and local farmers. The agricultural sector has never thought of bottlers as a potential market, but they are coming to realize the possibilities.
Many at the conference looked to keynote speaker Todd Boera from the Fonta Flora Brewery in Morganton, North Carolina for guidance. His brewery has more than doubled in size in the last six years and obtains 97 percent of its supplies from the Appalachian region.
“It’s the hard road, but every time we do something that we just put a whole lot of work into, whether it’s sourcing the ingredient to begin with and then processing that, or maybe it’s some brewing technique — whenever we have, whenever we taste the final product it’s 100 percent worth it because this isn’t a gimmick , it truly creates a better product and it just happens to tell a really cool story at the same time,” Boera explained.
Gwynn Guilford is a reporter for Quartz, a business news site. She specializes in writing about the economy. Guilford spent 10 months researching Appalachia’s economy for an article called “The 100-year capitalist experiment that keeps Appalachia poor, sick, and stuck on coal”. Guilford dug into the history of the region’s economic ties to the coal industry, and the long-term effects this relationship has had on the people who live and are determined to stay in Appalachia.
West Virginia Public Broadcasting reporter Roxy Todd spoke with Guilford about her report.
Roxy Todd: Gwynn, let’s start with how you became interested in researching the economic landscape in Appalachia, how it affects workers, and coal bosses.
Gwynn Guilford: In early 2017, I began researching U.S. mortality rates, which were drawing a great deal of media attention due to “deaths of despair,” in particular, opioid-related deaths. I wondered whether the focus on opioid deaths — which in the grand scheme of things, don’t kill anywhere near as many people as, say, heart disease — was obscuring other trends.
Looking at national data wasn’t very helpful, given the huge variation in health from one place to the next. So I started looking at maps of health data and mortality rates and trying to learn more about conditions in geographic pockets where things were particularly grim.
Again and again, the patch that I later came to understand was central Appalachia leapt out. Though, obviously, overdose rates were indeed frighteningly high in central Appalachia, what struck me was the breadth and consistency of health problems there across the board. I thought, “Geez, there’s a much bigger story about what’s happening here than opioids alone” and started trying to learn more.
My go-to strategy for trying to figure out anything is to start studying its history. Up to that point, my familiarity with central Appalachia came from stories I’d read about coal and opioids in central Appalachia while I covered the Trump campaign for Quartz in 2016, and due to the popularity of J.D. Vance’s Hillbilly Elegy as a sort of Rosetta Stone translating the source of Appalachia’s problems for outsider politicians and journalists. In other words, I didn’t know much!
I was lucky that one of the first people I happened to talk to — Nick Mullins, whom I found through his blog,The Thoughtful Coal Miner — was deeply conversant in the region’s industrial past (Nick’s family history ends up being the opening of my story). The more I learned about these (to me, bizarre) forces that shaped the region’s economy — e.g. absentee land ownership, coal camps, the drafting of the WV constitution, the patterns of coercion that gave rise to Matewan and the Battle of Blair Mountain — the more astonished I was by how little of this vital context made its way into media coverage or the wider American public’s understanding of central Appalachia’s challenges.
Credit Roger May for Quartz
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Former coal miner Nick Mullins
Two other things surprised me: First, how much of what I’d learned from writing about economic development — particularly on China’s economic growth model, deindustrialization, economic complexity, and the inclusiveness of economic and political institutions — applied to this patch of America, too. The other thing was that these problems weren’t unforeseen.
On the contrary, way back in the late 1800s and early 1900s, West Virginia politicians and tax authorities were already bemoaning what coal’s outsize influence on the state’s economic structure and incentives would do to future generations. They were clearly right to worry.
RT: How do you think Appalachia’s economy is a lesson for the rest of the country, about capitalism, and about the extractive industry?
GG: The “capitalist experiment,” as I envisioned it, was based first of all on the coal camp system — basically, the question of “what happens to social fabric and economic life when you privatize individual communities all across a region?” And the results aren’t good. Governments permitted individual companies to exert such absolute control over economic and social life that they could low-ball miners on wages in order to ensure profit margins. To use the concept pioneered by economist Joan Robinson, they enjoyed monopsony power. As the lone employer in a given town, they barred competition of other industries that might give people other economic choices and other skills to learn, thereby bidding up wages. Central Appalachia’s coal industry boomed in large part because, by suppressing workers’ wages, it outcompeted competitors from other (unionized) regions on price, encouraging even more expansion. Much of the industry’s growth came out of the pockets of mining households.
This vicious cycle crippled the long-term growth of central Appalachia’s economic base. Since most of this profit flowed out of the area, instead of being reinvested, it drained the region’s natural wealth and human capital even more. Continued reliance on the coal industry to create jobs and growth has shifted political and economic power increasingly away from all households — not just miners’ families — and radically curbed the choices and opportunities of the vast majority of central Appalachians. The public services that they should have been able to expect to nurture and support healthy, productive, educated communities either never existed in the first place or were backed by a stream of funding from coal extraction too minimal to sustain them.
These very specific conditions don’t apply in obvious ways to the rest of the U.S. But the dynamics here are instructive, and several parallels exist.
Take, for instance, the middle class, a bellwether of economic health. The U.S.’s middle class was in large part created through New Deal reforms that intertwined the interests of labor and capital, and expanded educational opportunities. By upping earning power and deepening the skills and knowledge of working-class America, these policies were a formula for balanced, self-sustaining growth. Though it was powering the consumer boom that resulted, central Appalachia never saw the emergence of a true middle class, thanks in large part to the economic and political dominance of the coal industry.
Nowadays, however, the rest of the U.S. is heading more in that direction too. For the last few decades, the American middle class has imploded, a sign that the U.S. economy, like that of central Appalachia, is becoming more and more fragile.
Another worrying similarity is how, as has long been the case in central Appalachia, America’s economic and political institutions increasingly concentrate power among the few instead of investing in the things we know drive long-term, self-sustaining growth.
As with most vicious circles of elite influence, there’s a cynical short-termism to how they distribute wealth. The latest tax cut bill is a case in point. That’s transferred wealth to corporations and their shareholders that instead should have gone toward spending on things that will expand the economy’s potential to grow — e.g. health, education, infrastructure. Meanwhile, increasing lack of regulatory accountability means that companies can easily pass on costs to the public.
This is also the consequence of the hollowing out of the local tax base in these places, which reflects U.S. leaders’ failure to help prepare communities to weather global economic and technological changes of the last few decades. Nowadays, scores of other geographic pockets of sickness and economic distress have emerged all over America. And as in central Appalachia, the implied solution is just to leave. But many don’t want to have to choose between their hometowns and a decent wage or opportunities for their kids—or, for that matter, their family’s health. Disturbingly, no leaders that I know of have come up with sound, concrete ways of confronting these problems—or even acknowledging them.
In the retreat of public leadership, we’ve also seen a shrinking of the role of public goods and services in Americans’ lives. This too is a sign of how our institutions are failing to act on behalf of the interests of a broad base of Americans. In some struggling towns, the retreat of local governments as providers of public services has been replaced by private equity firms that charge more for things like water systems, ambulance services and fire departments in struggling towns across America. (These are the sorts of arrangements supposed to rebuild America’s crumbling infrastructure, by the way.) It’s here especially that central Appalachia’s “capitalist experiment” can teach America something important.
This push is all based on the ideology that privatizing public goods and services always makes them cheaper because, since companies are motivated by profit, they’ll use resources more efficiently. But profit is just what happens when you add up income and subtract costs; the more crucial factors in determining whether resources are used productively are the prices assigned to those resources. The question is, who or what determines those prices? In the absence of competition and regulation (which puts value on more abstract things like health and clean air) private companies do.
That’s exactly what we saw in the “capitalist experiment” of the coal camps. The prices they assigned to labor, to housing, to healthcare, to pinto beans at the company store — those had nothing to do with efficient use of those resources, and they didn’t reflect genuine value. Companies set prices that maximized their own profit. Did they use resources efficiently? Nope. They destroyed central Appalachia’s human and natural capital, and profoundly stunted its physical capital. Yet here we are as a country, embracing policies that decrease competition and regulation.
RT: Some people have said that the Appalachian coal industry can be seen as a microcosm for some of the failures of capitalism. Do you think this is true?
GG: I don’t think capitalism per se has failed. Rather, it’s the institutions designed to broadly distribute the wealth capitalism creates that have failed central Appalachians. And until those institutions are expanded to encourage political and economic participation from a vastly broader swath of its society, they’ll continue to suffer.
RT: Some people have said that coal economies in central Appalachia have been treated almost as colonies by rich coal bosses from out of state. Do you think there is any reality in this reading of coal economies?
GG: Under colonial systems, typically the oppressing country extracts cheaply produced raw materials for its domestic production, while exploiting the colony’s workers as a captive consumer base for its value-added exported goods. Beyond its obvious moral problems, colonialism is bad because it discourages manufacturing, suppresses household purchasing power, and erodes the skill base in a way that eats away at a country’s productive potential, and leaves the economy precariously reliant on one or two commodities. So, sure — I think it’s not hard to see the similarities to colonialism in the absentee ownership, coal camps, and tax systems.
That said, I spent a lot of time puzzling over this question, reading up on debates among Appalachian academics about the relevance of the analogy, and couldn’t really figure out what applying the “colonial” framework helps illuminate.
I’m open to any tips on that, of course, but ultimately, someone whose thinking I found the most insightful was the late, great writer Jane Jacobs, especiallyhersobering caution about our impulse to embrace the concept. “The trouble with loosely calling all supply regions [i.e. places rich in natural resources] ‘colonial’ economies is that the term is too optimistic,” she wrote in Cities and the Wealth of Nations in 1984. “By reverse implication, it suggests that if alien domination of some sort is thrown off, a stunted, narrow economy will no longer remain stunted and narrow, will proceed to become better rounded and capable of producing amply and diversely on its own behalf as well as for others.”
The problem isn’t really coal or no coal, colonialist or not. It’s understanding what the extractive institutions built up around coal have done, over the course of a century, to central Appalachia’s potential. Fixing those institutionsis what central Appalachia’s future hinges on—the debate about coal’s rightful role in the economy, which Trump has helped whip up, is a distraction.
RT: As you probably know, in many of these small communities the coal companies paid for schools, housing, water infrastructure, and basically built up the entire town. This can be great for communities. But on the other side of the coin, when the coal companies leave these areas, they leave a crumbling infrastructure, and in many of these towns, people still live there but they struggle with failing water systems, and other effects of the lack of investment in the infrastructure. It some cases, it almost seems as though these towns were never planned to survive 2 generations. What’s to be done for the people left behind as coal companies have abandoned these former coal communities to their own fate? Aside from the lack of jobs, there are other major trickle-down effects left behind from the downturn of coal.
GG: I’m sorry to say I don’t have an answer to your question. But I will say that this issue is, to me, the most fascinating and heartrending of everything I learned, and I do have some thoughts.
First off, many of these towns weren’t planned to survive two generations! There’s a line I quote in my story from a 1923 Congressional report investigating coal-camp life: “A manufacturing town may count upon a reasonable degree of permanency. A mining town in a region not suited to other industry is sure to have only a limited life.” Well, just because it’s “not suited” doesn’t change the human impulse to put down roots! This whole line of thinking sees people strictly as labor inputs instead of as entrepreneurs, community members, and consumers — and coal towns as basically dormitories instead of nodes of economic and social activity that will organically grow wherever people build their lives together.
That’s kind of a moral reaction. Practically speaking, infrastructure is a thorny problem, and clearly the current economic base is too weak to pay for major projects (though again, the fact that it’s been allowed to deteriorate is a reminder that more equitable political institutions would have built up a much bigger tax fund from coal severance, as other states have done via far-sighted natural resource management).
As for whether reviving that economic base is a lost cause, though I think it’s plausible that some of central Appalachia’s problems stem from the fact that the coal camp legacy settlements are in places too remote to support commercial networks that would generate tax revenue and justify infrastructure investment, I haven’t seen any empirical data making that case. And as the work of historians Wilma Dunaway and Altina Waller reveal, there was actually quite a lot of commerce and manufacturing activity in central Appalachia before extractive industry distorted land values and labor markets.
Another thing I found striking in my research was the conspicuous lack of urbanization in central Appalachia. By one measure, according to an ARC (Appalachian Regional Commission) report, it’s the most rural area in America — it’s kind of like a cell without a nucleus. This is a problem because cities are important drivers of growth for their surrounding regions. Might a city or two have developed if coal’s economic and geographic dominance hadn’t thwarted that — and if so much infrastructure planning hadn’t been geared toward helping the extractive industries? Maybe!
So it’s also possible that the problem isn’t the remoteness of where people live, but rather, the way the region’s economic structure has stymied the emergence of a growth center for them to plug into. (Of course, ARC did try to address this, but struck out—probably because cities seem to emerge organically from economic activity, not the other way around.) Speaking of plugging in, it seems to this outsider at least that an infrastructure no-brainer is improved broadband connectivity.
RT: In your report, you say that coal mining is the only way that many West Virginians can earn a decent middle-class wage. Is this true? Aren’t there plenty of other careers in things like technology, law, medicine and business available to people in Appalachia? Maybe the difference is that these careers require many years in college and advanced degrees, whereas people used to be able to go intro coal mining right out of high school and earn a decent income. Is education the answer, do you think?
GG: I was speaking of southern West Virginia (and the rest of central Appalachia). As I understand it, you can also make a good living in railways, chemicals, the law, and other industries tied to coal. The question then is, is this coal-focused knowledge base giving rise to innovation that in turn supports other economic activity? Though that wasn’t a question I reported directly on, it didn’t really seem so. One sign that isn’t happening is the exodus of talented, ambitious young people out of the region.
As for your question about education being the answer, investing in human ingenuity is a must for creating a diverse, flexible, adaptive economy. Higher education is obviously a key component of that. But I think it’s possible to see college and advanced degrees as a panacea. Yes, formal educational opportunities are important, but even more crucial is creating a wide range of opportunities for people to build diverse skills, knowledge and know-how. So is encouraging institutions that connect those people through social and professional networks.
RT: Finally, I want to ask you about health disparities in Appalachia. Your report looks at this issue deeply, and analyzes research by the Appalachian Regional Commission and other health studies- for example, you cite one recent study that shows that between 1999 and 2015, death rates across Appalachia went up drastically due to drug overdoses, suicide, and liver damage due to alcohol abuse- sometimes these are called diseases of despair. You looked at how these diseases are making life expectancy for People in Appalachia far lower than the national average.
You also touched a little on cancer rates- which may be linked to things like strip mining. Can you talk about the cost of health for the region and how you see this affecting our region’s ability to rebound economically?
GG: Health allows people to be more productive and work longer, which is good for the economy. People in central Appalachia suffer from disability and chronic diseases at higher rates than in other parts of the country, which probably helps explain why so many people don’t work. They also die earlier than folks in the rest of the U.S., which is tragic in its own right of course, but also snuffs out the potential value of their economic and social contributions. It’s hard to put a dollar sign on that impact, but it has to be enormous. This is potentially cyclical; chronic stress from economic insecurity seems likely to be linked to people getting chronic diseases at a younger age and dying prematurely. And collective ill health hurts the economy, and so on.
What’s the scariest thing to me, though, is how this cycle will evolve in coming generations. Along with education, health in early childhood is important for boosting people’s productive potential and earning power as adults. The opioid crisis and mental health problems in communities seem to be taking a frightening toll on the wellbeing of kids in central Appalachia, which I touched on a bit in my story. I suspect we’re being naive about the long-term impact of how all that’s going to play out.
