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Home Publications Blogs Beat the Press NPR Hypes the Job Loss Story on Restricting Carbon Dioxide Emissions

NPR Hypes the Job Loss Story on Restricting Carbon Dioxide Emissions

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Tuesday, 03 June 2014 04:24

Like building a new airport, restricting carbon dioxide emissions will cost jobs. (If it's not obvious that building a new airport will cost jobs, then you better study more economics. The new airport will pull business away from other forms of transportation and other airports. That will cause people to lose jobs. On net, there will likely be job gains, but there will definitely be people who lose their job as a result of the new airport who either don't get another job or at least another job that is comparable to the one they lost.)

The reason that many people may not immediately realize that most government measures to improve the infrastructure, or really promote any form of economic development, lead to job loss is that the media generally ignore the job losers. They don't talk to the workers at the airports that are losing business, the truck drivers who might be displaced by air freight, or all the workers in restaurants, stores, and hotels who served the old facilities.

That is clearly not the case with measures to restrict carbon dioxide emissions. We have already heard numerous accounts of how this will devastate the economies of large parts of the country that are dependent on coal. NPR ran two such pieces on Morning Edition today.

It would be helpful if these stories gave some idea of the numbers involved. According to the Bureau of Labor Statistics there are just under 80,000 employed by the coal mining industry. This is less than 0.06 percent of total employment. If the economy generates jobs at the rate of 200,000 a month (roughly its pace over the last year), the total number of jobs in the coal industry are equal to the number that would be generated in 12 days.

Of course the measures proposed by Obama would not immediately eliminate all the jobs in the industry. They are supposed to be phased in by 2030 and even then the number of jobs in the industry is not likely to be zero. If we assume that the job loss occurs at an even pace over the next 16 years, it comes to a bit less than 5,000 jobs a year.

While this may not seem large relative to total employment, there are a small number of states in which the industry is heavily concentrated. In West Virginia the industry accounts for 32,300 jobs out of a total of 772,000, or 4.2 percent of total employment. In Kentucky it employs 11,600 workers out of total employment of 1,846,000, or 0.6 percent of total employment. In Virginia, the industry employs 9,900 people (this includes people employed in logging) out of a total employment of 3,768,000, giving coal mining a share of less than 0.3 percent of total employment. The employment shares in other states that are often referred to as "coal states" like Pennsylvania, Ohio, and Illinois would be even lower. There are counties in which coal is very important, but these are almost by definition small since the total number of coal miners is small.

Furthermore, as noted above, none of these states will be losing all these jobs immediately. Even in the case of West Virginia, in the complete disappearance scenario, we would be talking about the state losing less than 0.3 percent of its jobs a year due to the emission restrictions.

By comparison, our trade deficit means that an amount of demand equal to 3 percent of GDP is being spent abroad rather than in the United States. This directly translates into a loss of roughly 4.1 million jobs. If we could lower the value of the dollar relative to other currencies by enough to reduce the trade deficit by just 10 percent (0.3 percentage points of GDP), it would lead to 410,000 more jobs in the United States. This is more than five times as many jobs as we stand to lose in the coal industry over the next 15 years. In principle the reduction in the trade deficit can be accomplished in a relatively short period of time. Declines in the value of the dollar led to sharp reductions in the trade deficit (more than 2 percentage points of GDP) in the periods from 1987-1989 and 2005-2010.

The coverage of job loss in the coal industry also can't be explained by a special concern that the media have for the jobs of coal miners. We lost 75,000 jobs in the coal industry from 1985 to 1993, an eight year period, a time when the labor force was less than 75 percent as large as it is today. This much more rapid pace of job loss received almost no attention from the media at the time.

In short, it is difficult to explain the media's focus on the potential job loss in the coal sector either from the standpoint of a concern about jobs in general, since they usually don't express such concerns or even from a concern about coal miners' jobs, since they have been very willing to ignore larger job losses in the past.

None of this should take away from the fact that coal miners and these communities will take a real hit from addressing a problem that is not their fault. They deserve real compensation since they will be asked to pay a much larger price for slowing global warming than the rest of the country. However concerns for these workers and their communities cannot explain the media coverage we have seen on the issue to date.

 

 

Comments (16)Add Comment
...
written by Scott, June 03, 2014 6:26
In addition, the argument assumes that working in a coal mine is a good job. Historically, that hasn't always been the case - it's job with both short-term (mine collapse) and long-term (black lung) risks. Now it is true that in the second half of the twentieth century, the jobs have paid well, but wouldn't it be better for the coal miners if they could get equivalent pay and benefits at a different job?
...
written by John, June 03, 2014 7:45
Coal is a very polluting fossil fuel. The environmental and health impacts have caused irreparable damage. The total is probably not calculable. Typical of industry polluters, they themselves don't pay for the devastation. Miners and the public are the ones that pay.
@John
written by medgeek, June 03, 2014 8:07
Good point. As long as we're talking about economic principles, this is a classic externality.
Modern Tractors Were the First Big Job Killers in America
written by Last Mover, June 03, 2014 8:15

Members of Luddites for Jobs USA agree.

America has forgotten that jobs are a zero sum game. The opportunity cost of one job is another job. If more jobs are lost than gained, economic growth slows in order to maintain the natural full employment rate, since there are fewer jobs on the supply side to create its own demand. Econ 101, Fox News, 24/7.

This is why it is better to use manual labor as in agriculture in the early 1900s which employed 30% of the work force, before modern tractors killed off those jobs and reduced them to only 2% agriculture employs today.

Tractors killed millions of jobs and the media never said a word, instead fawning over how effective tractors were compared to manual labor. What were they thinking? That more productive tractors would translate into higher growth and absorb the displaced 28% into other jobs in positive sum fashion?

As NPR explains, the same logic applies to coal mine job replacement. Those jobs will be lost forever if they are forced to pay for the true cost of business that includes destruction of the earth.

Coal miners have no alternatives available because they are so highly skilled they will be structurally unemployed forever, in sharp contrast to many similarly displaced American workers who suddenly discovered they had really good fast food and greeter skills.

The answer of course is to ban all coal mining equipment and return to the days of full employment when miners dug coal on their hands and knees carried out by mules.

This would be no different than how NPR changed the way it reports news which created job loss as well - by replacing labor intensive serious investigative journalism with lightweight chit chatty stenographers who call themselves reporters as they take their marching orders from the economic predators who control them by remaining silent on the real issues.

Listen up America. Don't let the stenographers kill your jobs like the tractors did. Do what the luddites did when the tractors arrived. Surround and smother the stenographers with a listening blackout, then get your own super-PAC to crowd out their super-PAC and prove who the real job killers are.
Compensation for "taking" the coal....
written by pete, June 03, 2014 9:02
Increased compensation to transition the folks in Appalachia is what economists call compenstion for a regulatory "taking." I have argued this for mineral rights owners in places like NY where they are prohibited from selling their shale gas. By the way, not just the coal miners, of course. If the multiplier is like 3 or 4, then there are 3 to 4 times as many jobs in the economy who get multiplied out from the coal industry. Education, health care, diners, bars, etc., all will be affected.
...
written by JDM, June 03, 2014 9:08
Do they not refer to Wyoming as a coal state in these reports? It produces most of the country's coal . This was impressed on me a few years back when we drove through southern Wyoming and Nebraska and saw the innumerable and very long coal trains. It still only accounts for about 3.5% of Wyoming's jobs.

It often seems to me that news narratives are stuck in the now distant past, whether imagining that coal drives Kentucky or that small family farms are the source of our food supply. This now imaginary context doesn't help when it comes to accuracy. But then I imagine news reporters who go out and dig for a story instead of just cutting and pasting from a PR handout, so that stuck in the imaginary past thing is at play here too.
You don't get compensated for not doing people harm
written by Dean, June 03, 2014 9:30
Sorry Pete,
I don't have to pay you not to dump your sewage on my lawn. That is what is going on here. Emissions from burning coal are causing damage around the globe that destroy property and cost lives. People don't get compensated for not causing damage.
What about the job gains?
written by joe, June 03, 2014 11:26
What about the job gains from this regulation? Retrofitting power plants with scrubbers and more efficient technology, someone's got to produce it, install and maintain it.. And job gains in the clean energy sector?
Dean...your words that they "deserve real compensation".
written by pete, June 03, 2014 1:26
Sorry, that is straight up compensation for taking, as much as it may leave a bad taste in the mouth, since you are indeed suggesting paying these coal miners not to dump sewage in your yard.
Dirty Coal
written by jbakho, June 03, 2014 1:40
Those coal jobs tear up the roads with heavy trucks and destroy the environment, making a mess surrounding the strip mines and scattering coal dust from the open trucks and train hoppers. It makes the area unpleasant and unfit for recreation and other alternatives that could provide jobs. There could be development money and money to help those dislocated. The move to natural gas is destroying more coal jobs than EPA. They need a new economic model to replace the mining jobs.

The big coal companies take most of the profits out of state and leave behind a mess. Mountainous areas will never be as economically sustainable as areas where transportation is faster and better developed.
Republicans weeping for the poor
written by jumpinjezebel, June 03, 2014 1:54
Republican are all for taking away food stamps, not extending unemployment insurance, not extending Medicaid and against raising the minimum wage - all things that effect the poor. But now they're wailing about the plight of the poor due to the EPA regulations that will affect their jobs. Yeah right!! Can you spell Hypocracy??
Re: spelling challenge.
written by John Wright, June 03, 2014 8:45
From an earlier posting:

"Can you spell Hypocracy??"

Yes, "hypocrisy"

But perhaps "hypocracy" is a good term for the evolution of the USA democracy as it evolves to a hypo (under) democracy that serves the wealthy and connected.

Job Loss
written by John Parks, June 03, 2014 9:21
"Job Loss" is a mantra that is supposed to end any honest discussion and it is repeated so often that it is seldom examined too closely, as Dean has so well pointed out. The term is a knee-jerk justification for gutting any rules/regulations/agencies that stand in the way of predatory capitalism.

I have seen second hand how bad it could become. NPR mentioned that a good portion of the mined coal goes to China. (I kind of recall it was almost one third) I have had the pleasure of having as guests in my home recently two different individuals from China. We are now hosting for the next couple of months a young lady taking an intense English language course before she begins university this fall back home in China. Both of our guests, separated by over 30 years of age, had one thing in common. They were awestruck by the blue sky.
They took countless pictures, not of statues, monuments, waterfalls, mountains or rivers, but of little white puffy clouds flowing by on a bright blue background.

There but for fortune.............
Instead of trying to convince us it doesn't cost anything
written by Bill H, June 04, 2014 8:57
or at least anything that matters, how about stressting that it is so important that we should be willing to pay the cost. One of the reasons that America has become a country os "Yes we want it, but only if we don't have to pay for it," is people like you who come up with ways to hide costs and sell projects on a basis of the pretense that they will "cost only .0001% of GDP."

The local equivalent, of course, is "It won't raise taxes because it will be paid for with bonds."
Global warming will be the real job killer
written by Mark H., June 04, 2014 9:54
If global warming is as bad as credible predictions--average global temperature rises of 7.2°F with a likely range of 4.3 to 11.5°F, according to the IPCC's worst-case scenario--no one's going to worry about a few lost jobs in the coal industry. We'll be worrying about trying to stay alive and find water. It'll be an apocalyptic nightmare that'll kill global GDP and cost TRILLIONS of dollars yearly, not billions. So why is NPR obsessing about us losing a few coal jobs that'll cost a few million dollars? They're two orders of magnitude off in what to really worry about. What are they, brain-dead?
Industry Towns
written by Greg, June 08, 2014 7:01
I live in KY. I see all the local politics and influences involved. Here, as most likely in many coal producing areas, the coal companies have worked very hard to be the only ticket to a good paying job. They do so by any means necessary - including direct bribery.

The reason for this is simple: other good paying (and less dangerous) jobs would significantly drive up the cost of labor for them. It would also lessen the amount of leverage they have on their legislators to minimize regulation.

While I feel sorry for the communities that will suffer as coal jobs continue to disappear I recognize that they were warned many times that relying on one industry for survival is dangerous. They chose repeatedly to not make the hard decision and push back against the coal powers' essential monopoly. As each short term decision combines into the long term result the economic impact worsens.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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