If you caught the State of the Union on Tuesday, February 28th, you heard quite a few references to the coal industry and coal miners specifically. Coal has been mined for thousands of years but became an important commodity in the 19th and 20th centuries and helped fuel the Industrial Revolution. Since the early 1970’s, coal has been under attack by interest groups for being hazardous to the miners, destroying the physical environment and being a major contributor to carbon dioxide in the atmosphere. On the heels of last night’s State of the Union, China announced today that they are going to cut half a billion jobs in the steel and coal industries throughout 2017.
Over half the world’s steel is produced in China and the economic slowdown and sagging global demand has created a massive overcapacity in the country. Coal is used to fire the furnaces and smelters that melt and form the steel. This is not the first time that China has cut steel and coal jobs, as nearly three-quarter of a billion jobs were eliminated in 2016. Despite the news coming out of China that the process is orderly and conflict free, hundreds of workers protested the cutbacks last April 2016 in Hebei province.
Unemployment in the industrial sectors of China were typically absorbed by the agricultural sectors that migrant workers could return to and work until things improved. Urbanization over the last decade has swallowed up large swaths of farmland that they once used to call home. China’s unemployment rate is set to increase over the coming year, not decrease, due to additional cutbacks without any improvement in the forseeable future. Beijing, in many ways, is struggling now with something that has been a reality in the United States for at least the last 10-15 years.
Trump has promised that he will bring back the coal industry and more than likely received a lot of support across the rust belt and the mid-west because of that promise. The grim reality is that coal is primarily only used for industrial purposes or electricity generation. Industry in the United States has been in steady decline for several decades in favor of cheaper labor in foreign countries, another promised change by Trump. As much as I would like to see him come through on all his promises to the American people, revitalizing the coal industry just is not one promise I see ever coming true.