Wednesday, July 12, 2017

The dirty truth that does not have to be mined

If only more people understood the importance of economic geography in their own lives.  I often tell students in my intro class that if they carried with them the economic geography way of looking at the world, ... but, of course, rare is a student who pays any attention to me.

Most of this current president's campaign lies were on issues that are absolutely economic geography.  China's competition with the US? Yes. Immigration from Mexico and elsewhere?  Yep. Coal? Of course, yes, dammit!

I read two essays on the coal country in eastern Kentucky and West Virginia.  I am guessing this a region that this president won by a huge margin over Hillary Clinton, who spoke the truth about coal jobs not coming back.

Click here to zoom into the map
You know the economics of the region is in shit streets when even Walmart closes down a store.
Rural areas like McDowell County, where Walmart focused its expansion plans in the 1990s, are experiencing accelerating depopulation that is putting a strain on the firm’s boundless ambitions.
Hit hard by the longterm decline in coal mining that is the mainstay of the area, McDowell County has seen a devastating and sustained erosion of its people, from almost 100,000 in 1950 when coal was king, to about 18,000 today.
This president can bullshit all he wants, and 63 million people can vote for him, yes.  But, then there is the real world.

This wasn't even a regular Walmart store, which can seem huge to visitors from most other parts of the world.  This was a supercenter!
“It’s all about jobs,” says Melissa Nester, publisher of the local newspaper, The Welch News, which sells 4,500 copies three times a week and doggedly refuses to have a website. “Dollar stores have picked up some of the trade left by Walmart, but they haven’t created many jobs.”
At its peak, Walmart employed 300 people in the McDowell County supercenter. That was down to about 140 by the end, but it still made it the largest employer in the area.
 The reality of life in a corner of the US that is being rapidly left behind.  These are the "forgotten" people that this president bullshitted to.
After jobs, taxes are the next things to go. The town of Kimball in which the supercenter is located used to receive $145,000 a year in taxes from Walmart, and when that went it had to cut back its workforce and put all remaining staff on a four-day week.
The county government also lost $68,000 in taxes, most of which went to schools, and all its staff were given a 10% pay cut.
It does not take much for economic conditions to quickly spiral down.  Rome was not built in a day, but it did not take long for the decline and fall, right?

Linda McKinney ... "mourns the communal aspect of the supercenter, its quality as a “social hub”."
McKinney rattles off a list of all the community facilities that disappeared from the region in recent years as the population declined and the culture of mega-chains like Walmart took root.
There used to be 28 churches of her United Methodist denomination in the county, now there are six; there were seven bars in Welch, all but one have closed; there were three cinemas, now it’s down to one; there are no community centers left; many of the corner shops have gone. “There’s nothing here,” McKinney says.
A complementing essay at a different publication looks at another aspect of this economic geography: What can a community college do to help people?
As manufacturers shed workers and businesses gravitate to urban areas, they often leave economic devastation in their wake. Thousands of people reliant on a dominant industry, in this case coal, are thrown out of work and their options are few. In the hills and hollows of Eastern Kentucky, communities must also contend with low levels of education, high rates of poverty, weak infrastructure, and an opioid epidemic.
If you are like me, you are thinking this: A community college cannot do much to address such complicated issues.  True,  But, they try their best.
Meanwhile, state and regional leaders wrestle with a pressing challenge: Can they bring decent jobs to an area that lacks the infrastructure, education levels, and geography to support large manufacturers and skilled jobs? In 2014 the average annual wage for a coal miner in Kentucky was $72,000. Nothing has come along since to replace that.
Nothing will come along to replace that $72,000 job.  Of course, that is not the truth that this president and his minions talked about, right?

Keep in mind that there are other jobs.  It is just that those other jobs barely pay minimum wages.
"A lot of what you see in terms of opioid abuse, a decrease in life expectancy, a lot of that is being driven by the hopelessness of seeing jobs, but not good jobs," says Nate Anderson, who spends a lot of time in Kentucky as a senior director at Jobs for the Future, a nonprofit organization that promotes skills training and job opportunities for low-income people. "No one wants to spend their entire life in retail earning next to nothing. They want opportunity and that’s gone."
So, what can be done?

Anything that can be done will have to start at step number one, which will never ever happen.  That first step is this: Political leaders need to start talking the truth to people.  Because that will not happen, and because even partial-truth will only make losers out of candidates, well, ... we are where we are now!

The second best thing to do: Take courses in economic geography and save yourself a whole lot of trouble!


Ramesh said...

You are glossing over the real problem - why was the coal miner earning $72,000 ? That is simply an unsustainable cost base and that's why the jobs are going away. A MBA in India with 10 years of experience and working in high technology industry won't earn $ 72,000.

The US has done precious little in cost management. It was living like a king assuming the rest of the world owed it automatic prosperity. It just failed to remain competitive. Now its being taken to the cleaners by more competitive countries. Tough luck !

Sriram Khé said...

Nope. I was not glossing over it. Which is why I categorically said that "Nothing will come along to replace that $72,000 job."
The miners earned it then because coal was king. The king was dethroned a long time ago, and those miners have not been told the truth. They continue to believe that trump will bring back those 72K jobs!

And, yes, the larger story is that of the average American believing that he/she is entitled to 72K jobs just because they were born in the USA. Somebody needs to tell them that born in the USA is no guarantee of an awesome life; I have tried my best to educate people about that, but these damn politicians continue to lie, lie, and lie!!!

Nope, the US is competitive where it matters. But, and I have blogged about this a gazillion times, the routine jobs that guaranteed the middle class life are where the US has long lost its competitive edge. Those are the jobs that have rapidly moved to, and continue to move to, China, India, and others. It is not "tough luck" but the nature of the dynamic global economic geography.

Therefore, the real discussion ought to be about how to support/assist Americans who might not have the abilities to operate in the value-adding knowledge economy. That requires honest political conversations. Here is where you say "tough luck!"

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