There’s Precedent for the Transition Assistance Eastern Kentucky Needs

coal fired plant - largeThe new power plant rules proposed this week will make coal less competitive in the coming decades. It’s just one factor pointing toward continued decline in eastern Kentucky coal production, the main causes of which are the rising cost of Central Appalachian coal as the dwindling resource is harder to access and the drop in natural gas prices due to fracking.

Coal’s further decline in the region spells more economic trouble for eastern Kentucky. That’s on top of being one of the nation’s poorest regions even when coal was booming.

When policies and other factors cause serious economic problems for a region or group of Americans, there is precedent for federal investments to help workers and communities adjust and transition. There’s even precedent in eastern Kentucky–the Appalachian Regional Commission was created in 1963 as a response to the region’s persistent poverty in a nation of growing abundance.

But the ARC’s non-highway budget has declined dramatically from its peak of over $1.2 billion in today’s dollars in the mid-1970s to well south of $100 million today, money which it spreads over 13 states.

Some small new federal investments have been announced for eastern Kentucky since the Shaping Our Appalachian Region (SOAR) initiative was launched, but much more is needed to transition an economy that has seen its coal jobs reduced by half in the last three years.

Other precedents for federal investments to support economic transition include:

  • The Trade Adjustment Assistance program, established in 1962, which provides services and supports to workers negatively impacted by U. S. trade policies.
  • The Job Training Partnership Act Title III, established (under a different name originally) at the same time and intended to provide employment and training services to workers replaced by automation and other shifts in the domestic economy.
  • The Base Realignment and Closure Commission, which helps communities harmed by the shuttering of U. S. military bases transition their local economies.
  • The Clean Air Employment Transition Assistance program, created as part of 1990 amendments to the Clean Air Act, which provided payments for training and other assistance for workers affected by Clean Air Act compliance.
  • The Regional Rail Reorganization Act, created in 1973, which helped workers impacted by the widespread financial failure of Northeast and Midwest Railroads.
  • The Redwood Employee Protection Plan and Northwest Economic Adjustment Initiative, worker and economic assistance programs targeted to particular regions of the Pacific Northwest where timber harvest was reduced by federal environmental regulations including protection of the spotted owl habitat.
  • The U. S. Community Adjustment and Investment Program, which provided economic development assistance for communities affected by NAFTA including U. S. border areas.

There are lessons to learn from these and other examples about what works and what doesn’t in transition assistance. Any help must be well funded, combine support for individual workers with economic development support for communities, be driven by local people and have clear avenues for broad democratic participation in planning.

Details can be worked out. But the important part now is for the nation to recognize the debt it owes the region for providing the cheap power that grew the U. S. industrial economy, and for Kentucky and regional leaders to speak to the inevitability of what lies ahead.

Jason Bailey

About Jason Bailey

Jason Bailey is Director of the Kentucky Center for Economic Policy and serves as Research and Policy Director of the Mountain Association for Community Economic Development.