Diversifying the economy of a mining region, especially when mining is still a viable industry, is an extraordinarily difficult task. Building a future-based economy is hard because the benefits to tomorrow’s generation are harder to see in the current one. The reward is promissory; gratification delayed.
It often seems Iron Range elected leaders and residents remain obsessed with mining and view other industries incredulously, almost as though they were a threat to a known way of life. Interestingly, I find the opposite is true among mining industry insiders, who know full well the limitations of a mining-only economy. Still, the mining companies are here to mine (it is literally their job) and it’s the job of other local leaders to steer the good ship Diversified Economy.
So it was interesting to read this story in the Lexington (Ky.) Herald-Leader about a recent presentation by Iron Range leaders to an economic forum in Eastern Kentucky’s coalfield region. Coal mines in eastern Kentucky are shutting down at a rate beginning to resemble the northern Minnesota iron mining collapse in the 1980s. Joe Sertich, a former community college president (disclosure: my former boss), and his son Tony Sertich, commissioner of the Iron Range Resources and Rehabilitation Board, addressed the group Monday, Dec. 9.
Sertich said the long-term effort has been successful. The unemployment rate in the [Iron Range] region is about 6 percent, and there has been nearly $500 million in public and private investment in the region since 2010, which is projected to create more than 4,100 jobs, he said.
Several Eastern Kentucky coal counties had unemployment rates well above 10 percent in October, preliminary figures showed, with Leslie County topping the list at 18 percent.
Essentially, the gist was that eastern Kentucky should learn from the example of the Iron Range and keep more of its mining revenue in the local area affected most by mining. This allows for more economic diversification. But that presumes two important things: that the Iron Range’s economy is actual diverse and that Kentucky is even capable of doing this.
The stark challenge facing Kentucky was clear in this excerpt from the story.
A roomful of people in one session Monday on tourism development applauded when Fred James, with the Prestonsburg Tourism Commission, said coal-producing counties should get 100 percent of the coal severance tax.
Beshear, however, said at a news conference that the state’s next budget will be stretched thin, “so we can’t be fooling” with the division of coal-severance money between the state and counties.
In other words, the very tools that make the Iron Range slightly more adaptable to changes in its mining economy, the only real advantage Minnesota’s mining regions have over Kentucky’s, are off limits in Kentucky’s political environment.
This doesn’t seem to bode well for Eastern Kentucky, but I’m also interested in how the story here in northern Minnesota has parallels. Diversifying the economy is something everyone’s for, until it causes some kind of hardship for the mining companies or the political structure the mining companies built. Then, it gets hard.
Political support for jobs is always strong on the Iron Range, but when those jobs don’t involve mining or natural resources, things local people understand quite well, and start to involve the internet, something still maddeningly foreign to most decision makers, well, it unravels. Patch Patch Patch. Ask the kids. Hope it’s just a fad.
In this way, I imagine northern Minnesota has a great deal in common with eastern Kentucky, despite our superior system.
The IRRRB helps keep more Iron Range money on the Iron Range (something that’s benefitted communities these last three decades), but we still struggle with the same resistance to economic diversification that eastern Kentucky sees. It’s entirely possible they get there first, if only because they’ll run out of other options before we do. That’s really what it’s about: political will.
Our economic problem is also a cultural and psychological problem. We need to become capable of letting mining be what it is, and planting other economic “crops” at the same time. This is what farmers do. This is what allows cities to keep chugging even if one big employer goes bankrupt. The uptick in increased mining tax revenue now is not an indication of permanent mining prosperity, it’s a one-time-only opportunity to diversify and achieve fiscal stability with less difficulty.
It’s true: we Iron Rangers do know how the people of eastern Kentucky feel right now with their mines closing. Do we really need to feel that way again to learn anything? The job of economic diversification is as hard as the rock miners piled up for more than a century in both Minnesota and Kentucky. Luckily, we know for a fact that rock can be moved.
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