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Employment Outcomes of Separated Coal Workers in Kentucky

Posted on: 02/21/2024


With roughly 85% of coal jobs in Kentucky lost in the last 30 years, local labor markets that depended on the coal industry as an available source of living wage jobs have gone on to experience unique challenges. Understanding the experiences of workers who have been separated from the coal industry is a critical step in contextualizing the current conditions in these local labor markets and shaping their future. The following analysis will utilize aggregate labor market data and data from the Kentucky Longitudinal Data System to highlight recent employment trends within the coal industry in Kentucky and explore the employment outcomes of individuals who it formerly employed.


The Decline of Coal Employment in Kentucky

In 1990, coal mining accounted for more jobs in Kentucky than in any other state in the country, according to the Bureau of Labor Statistics' Quarterly Census of Employment and Wages (QCEW). Then, from its height of more than 29,000 jobs, the industry declined in employment throughout the '90s, reaching what was, at the time, a historic low of 13,259 jobs in December 2000. In the following decade, the industry experienced temporary growth - reaching nearly 17,000 jobs by the end of 2011 before once again entering another decade-long decline, punctuated by a COVID-driven downturn in early 2020 wherein the industry only accounted for 2,406 jobs. In this span of time (from 1990 to 2023), Kentucky was surpassed by at least two other states (including neighboring West Virginia) in terms of total coal mining employment.


Coal Mining Employment, Kentucky vs. Other States

(Private Ownership, NAICS 2121, January 1990 - June 2023)

Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW). Data accessed 12/17/23.


More than just a substantial source of jobs at various points in Kentucky's history, the coal mining industry has also traditionally been a source of living wages for workers. Average weekly wages in coal mining exceeded the average weekly wage for All Industries in the Private sector by at least $260 per week from 1990 to 2022 (and by as much as $700 per week at several points in that span of time). In Q4 2019 (prior to the economic disruption of COVID-19), the average weekly wage for workers employed in coal mining in Kentucky was $1,386 - a value which would represent a living wage for a household with two adults (one working) and two children in most (if not all) coal-producing communities across Kentucky.


Average Weekly Wages in Kentucky, Coal Mining vs. All Industries

(Private Ownership, NAICS 2121 vs. All Industries, Q1 1990 - Q4 2019)


Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW). Data accessed 1/22/24.



Employment Outcomes

In the wake of such a concentrated loss of living wage jobs, what employment prospects awaited workers who were separated from jobs in coal mining? Although there are limiting factors1 to the number of former coal workers whose employment outcomes can be examined in the available data, this question can largely be answered with a longitudinal analysis of employment and wage data from the Kentucky Longitudinal Data System (KLDS). Note that employment outcomes ascertained from the KLDS almost exclusively represent employment outcomes within the state of Kentucky. For example, a worker separated from a coal job who then goes to work in West Virginia is, in this analysis, indistinguishable from a worker separated from a coal job who never works again. Additionally, the concept of employment "separation" is utilized here to indicate the discontinuation of employment for any reason (including layoffs, voluntary withdrawals of employment, etc.).

Among all workers who were younger than 55 when they were separated from a coal job in Kentucky between 2007 and 2017, 37% never went on to hold covered employment in Kentucky again. Among the subset of those who did, evidence suggests that their eventual employment was commonly sporadic or otherwise not sustained. Using one, three, and five years post-separation as horizons for measuring employment outcomes, only 28% of former coal mining workers who went on to obtain future employment in Kentucky were employed at all three horizons. Another 26% were working at a minimum of one horizon, but were not working at all horizons. The remaining workers held covered employment at some point after their separation from the coal industry, but not at any of the aforementioned horizons.



As workers have been separated from jobs in the coal industry, conditions in the larger labor market and targeted training/re-employment programs have evolved, begging the question of whether separated workers’ employment outcomes have changed over time. In Kentucky, the percent of workers formerly employed in coal mining holding a job three years after their separation has marginally increased over time. Additionally, it may be the case that large-scale economic downturns affect these outcomes, given that workers separated from their jobs in the immediate aftermath of the Great Recession exhibited lower three-year employment levels than their counterparts who were separated from their coal mining employment in other years. 

Percent of Former Coal Workers Employed in Kentucky Three Years After

Separation (by Year of Separation)

Source: Kentucky Center for Statistics (KYSTATS), Kentucky Longitudinal Data System (KLDS)


Data also indicate that a substantially lower number of older workers maintained employment after their separation from the coal industry, despite the exclusion of workers older than 54 from the analysis. Generally, younger workers demonstrated the highest levels of employment three years after a separation from a job in the coal industry, with the youngest (age 16 to 24) exhibiting the highest levels (57%). Conversely, only 28% of former coal workers aged 45-54 (the upper range of what the Bureau of Labor Statistics considers ‘prime working age’) were employed three years later.

Percent of Former Coal Workers Employed in Kentucky Three Years Later

(by Age at Time of Separation)

Source: Kentucky Center for Statistics (KYSTATS), Kentucky Longitudinal Data System (KLDS)


Wage Outcomes

Among former workers who were employed in Kentucky after separation from the coal industry, 54% went on to earn wages greater than or equal to the wages they previously earned2. For those who did, the median length of time after their coal separation that it took to begin earning comparable wages was 5.25 years. Three years after being separated from coal jobs, half of all workers were earning 73% or less of their mining wages.

Volume of Former Coal Workers by Wages Earned Three Years After Separation

(Expressed as a Percentage of Their Former Mining Wages)

Source: Kentucky Center for Statistics (KYSTATS), Kentucky Longitudinal Data System (KLDS)


The wage outcomes of separated coal workers were highly dependent on the industry in which they eventually found employment. Some industries, such as Pipeline Transportation, Management of Companies and Enterprises, and Paper Manufacturing afforded comparatively high wages to separated coal workers but absorbed relatively few of them. Other industries, such as Administrative and Support Services or Specialty Trade Contracting, absorbed high volumes of separated coal workers, but afforded them comparatively low wages. Support Activities for Mining, which includes mining-related business activities such as mineral exploration, site preparation, and overburden removal, absorbed a relatively high number of former coal mining workers and afforded those workers relatively high wages. However, like coal mining, this industry is in decline (with employment down 45% from 2012 to 2022, according to the Bureau of Labor Statistics).

See below for a scatter plot of industries that have absorbed former coal mining workers. Hover over an individual point to see the industry, the number of former coal workers included in this analysis that it absorbed, the average weekly wages of those workers, and a description of the kinds of business activities typically performed in that industry.


Industries Employing Former Coal Workers

(Number of Former Coal Workers vs. Average Weekly Wages of Former Coal Workers)

Source: Kentucky Center for Statistics (KYSTATS), Kentucky Longitudinal Data System (KLDS)

Summary and Future Research

Coal mining employment has sharply declined in Kentucky, marking the disappearance of thousands of living wage jobs across the state (and particularly in Appalachian Kentucky). Many workers separated from jobs in the coal industry (especially those in the upper range of prime working-age) never went on to work in Kentucky again. For those who did, employment was sporadic or otherwise not sustained across multiple years. Just over half of the workers who held employment after being separated from the coal mining industry ever went on to earn comparable wages post-separation, and, for those who did, it took an average of more than five years to do so. Employment outcomes of separated coal workers improved from 2007 to 2017, but wage disparities existed between workers who found employment in different industries.

Future research into the employment outcomes of former coal workers could explore outcomes by other demographics not mentioned in this article (e.g., gender, race/ethnicity, place of residence). Additionally, the educational outcomes of former coal workers could be examined; i.e. how many former coal workers enrolled in adult education, career training, or postsecondary education programs before (or in lieu of) pursuing near-term employment opportunities? Finally, future developments in interstate data-sharing capacity between Kentucky and neighboring coal-producing states could allow for a larger analysis of employment and wage outcomes throughout Central Appalachia.



Footnotes

1

The analysis presented here utilizes individual wage records obtained from Kentucky's Office of Unemployment Insurance (OUI), as well as age/death data obtained from Kentucky's Office of Vital Statistics (OVS). To be included in this analysis, an individual:

    • Must have been employed, by the same employer, in NAICS 2121, in a job covered by Kentucky’s Unemployment Insurance system for at least three consecutive quarters after 2007. Additionally, among all industries in which a worker held a job, NAICS 2121 must have been the largest source of wages earned.
    • Must have been separated from employment in NAICS 2121 prior to 2018.
    • Must have been born in Kentucky and must have been less than 55 years of age at the time of their separation. The exclusion of workers 55 and older limits the analysis to individuals who were younger than (or within) prime working-age at the time of their separation. Workers' employment status at ages greater than 55 is reflected in this analysis, but only in the context of individuals' employment outcomes after their separation.
    • Must not have a record of death in Kentucky within the five years following their separation.

2

Note that, to allow for appropriate comparisons across time, all wage values represented in this analysis derived from the KLDS were inflation-adjusted to Q3 2023 dollars prior to any calculations performed.


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