by Dr. Roy Cordato
Senior Economist, Emeritas
Back in 2008, then candidate Barack Obama promised to bankrupt the coal industry. He stated,
[I]f somebody wants to build a coal-powered plant, they can. It’s just that it will bankrupt them,” and electricity rates will “necessarily skyrocket”
Since then Obama’s regulatory machine has moved to keep his promise with a host of new regulations, including and especially the classification of CO2 as a dangerous pollutant by his EPA.
The fact is that in this war on coal miners and companies that generate power by using coal, Obama and his regulators have all the guns, e.g. the power to levy fines for non-compliance, the power to shut companies down, and even the power to jail company leaders who may find themselves on the wrong side of the rules. The best the coal industry can do is retreat — and retreat is what it is doing.
The most recent set of casualties in the President’s Sherman-like onslaught are Virginia, Pennsylvania, and West Virginia residents who have the misfortune of supporting their families via a pay check from a coal company called Alpha Natural Resources. According to the Washington Post:
Alpha Natural Resources will cut its coal production by 15 percent and immediately lay off about 160 mineworkers while idling eight mines in Virginia, West Virginia and Pennsylvania…[and] an additional 800 jobs would be lost by early next year as it seeks to cut overhead by $150 million a year.
If we weren’t in the middle of a horrible recovery, in part being caused by these same regulatory policies, it is quite possible that these workers could be absorbed elsewhere. In a truly dynamic and growing economy job creation occurs at a rate that more than compensates for new entrants into the labor market, usually allowing workers to move into more valuable and better paying jobs somewhere else in the economy. But with the economy growing at a pitiful 1.7 percent annually, the future that these laid off workers have to look forward to is not particularly a happy one. As noted by a spokesman for the United Mineworkers:
It’s never a good day when workers are laid off…These are the best paying jobs in their communities and whatever these people find will pay half or less than what they were getting.
This same spokesperson goes on to estimate that there have already been 3000 to 4000 jobs lost in this industry so far this year. But as General Sherman surely would have argued, in any war some innocent lives will have to be lost. That’s just the price of victory.