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An Economic Transformation

Tourism Under Trump: Can Recreation in Appalachia Revive a Struggling Economy?

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It’s mid-April, and the New River flows lazily past the town of Thurmond, West Virginia between ridges marked by the mix of leafless brown and electric green that signals the moment just before nature explodes and rafters return.

Looking down from the Concho Rim high above the river, Haynes Mansfield talks about Thurmond’s history as a coal hub and resort town in the early 20th century. Today, sections of the historic town are part of the National Park Service-managed New River Gorge National River. Mansfield, marketing director for ACE Adventure Resort, describes the location of the resort’s private put-in, on a bend below the town, as well as the put-in for other regional outfitters just above.

On this day, the river looks vacant. But within a few weeks, tourists will start to flow into the West Virginia communities that sit along the river for adventures in whitewater, rock-climbing, mountain-biking and other outdoor pursuits.

“Rafting is still the bulk of our income, but the rafting industry’s been in decline since ’96,” Mansfield said. “For us, it’s all about saying what can you do with 1,500 acres in Appalachia to provide different opportunities for people in the outdoors. It’s kind of like summer camp for adults.”

Along with Adventures on the Gorge, ACE Adventure Resort is one of the two biggest outfitting operations on the New River Gorge. The resort has grown so much since opening in 1987 that it’s running out of space to place visitors. It rents out 52 cabins on site, which range from tiny houses to 1,500-square-foot five-bedroom cabins and — during whitewater season — they’re booked solid.

In 2015, ACE moved to build a 60-room lodge on the Concho Rim, just feet from where Mansfield stands, but was blocked by the West Virginia Department of Environmental Protection due to a lack of wastewater capacity. As a result, the nearby city of Oak Hill annexed the historic mining community of Minden, as well as ACE. The company then launched a $23.6 million wastewater treatment project that will provide capacity for the lodge, as well as remove a number of open pipes that drain into the New River.

Mountain bikes sit outside of ACE Adventure Resort in Fayette County, West Virginia. (Photo: Mason Adams)

For Oak Hill, the annexation represents more than just an infrastructure project and expansion of territory. It’s an investment in a growing outdoor recreation sector that took root in the rafting rush of the ’80s and ’90s, and now has matured into a core part of the community’s culture.

“I went out last night with some friends who trained here in the gorge with me in 2001,” Mansfield said Monday. “They’re married, still live here. She flies with the Air Force, and he runs the outdoor program at WVU Tech. Another friend is a teacher. None of us ever thought we’d stay here. It just gets in your blood.”

Throughout Appalachia, many communities are considering a similar shift in focus when it comes to economic development. Outdoor recreation has grown substantially over the last few decades, not just as a way to bring visitors but also as a talent magnet. In doing so, advocates of the slippery, sometimes elusive concept of “economic diversification” are trying to change the community narratives in towns that have seen longtime legacy industries decline or even depart.

Each of these communities faces a different combination of assets and challenges, and so the formula varies place to place. Ask around for an example of a place where this has worked, and many people point to Roanoke, Virginia.

Roanoke, which sits in the Great Appalachian Valley at the junction of the Wilderness Road and Great Wagon Road, took off in the 1880s when Norfolk & Western built its headquarters there. The city rose and fell on the railroad’s fortunes through the 1900s, but the last few decades have seen a decline as the railroad shifted its offices to Norfolk and Atlanta, culminating in 2015 when it closed its last administrative offices in town.

By then, however, Roanoke had significantly shifted its model of economic development, pursuing outdoor, tech and science-based initiatives including the Blue Ridge Marathon, the GO Outside Festival, a broadband authority and an extensive partnership between Carilion Clinic and Virginia Tech that created a new medical school and research institute. In 2016—one year after Norfolk Southern closed up shop—the Roanoke Valley landed production breweries by Deschutes Brewery and Ballast Point Brewing and Spirits, as well Italian auto-parts manufacturer Eldor. Coming in quick succession, those economic development wins became a rallying point and completed Roanoke’s transformation from a gritty railroad city to a hip mountain beer town.

“We don’t do tourism in the traditional sense, although there is a tourism byproduct,” said Pete Eshelman, director of outdoor branding for the Roanoke Regional Partnership, the region’s economic development group. “We’re focused on improving our community for the residents, and then making it that place where people want to be from a worker or talent standpoint. The offset is that’s where people want to go visit. Either way we’ve created a community with vitality, where people want to be.”

Other communities have taken note of how Roanoke and its sister city in North Carolina, Asheville, have used outdoor assets to build an economic development strategy that brings jobs that pay livable wages, not just seasonal service gigs. The approach varies by community, however.

In Johnstown, Pennsylvania, non-profit economic development organization Johnstown Area Regional Industries (JARI)  has shifted resources to supporting outdoor-related entrepreneurs, said President and CEO Linda Thomson.

“We believe that this is going to help with this new outdoor mountain town atmosphere,” Thomson said. “Now, when a company looks at our region, say they want to open a recreational business or something that supports that industry, we provide financing and technical assistance. We’re really handholding a lot of small companies today. It’s a deliberate step at being more supportive of homegrown small business and being more tuned in to the service sector.”

‘We’re seeing boomerangs’

The community narrative hasn’t always kept up with that forward movement, however. When the metallurgical coal market spiked several years ago, JARI found itself recruiting workers to fill 1,000 job openings in the mines. Thomson explained that some residents still hope to return to the city’s glory days as a coal-mining, steel-making industrial hub. As a candidate last year, Donald Trump’s pledged to revive both coal and steel as major employers. Such promises won him the support many Appalachian voters.

“We’re seeing people whose fathers worked in the steel mill saying, bring back that economy, and we won’t be satisfied if it doesn’t come back,” Thomson said. “But most people are very excited about living and working here. We’re seeing boomerangs—people who grew up here who are now coming back. There are amazing opportunities for communities like Johnstown to thrive in this new economy.”

Skip Glenn, a professor of marketing and entrepreneurship at the University of Pittsburgh at Johnstown, believes the election of Donald Trump in November may make those legacy issues more challenging.

“The steel collapse created a generation that felt betrayed,” Glenn said. “I hear that in people’s voices and stories here. With the arrival of Trump in office, they’re expecting coal and the industry to come back and save the region. It’s not going to happen.”

The Historic Fayette Theater sits along South Court Street in Fayetteville, West Virginia. (Photo: Mason Adams)

In Fayette County, West Virginia, a handful of surface and underground coal mines still operate, and many cultural indicators still point squarely at the legacy coal industry. King Coal Chevrolet billboards are everywhere, and the remnants of historic mining towns remain in places like Thurmond.

As with Johnstown and Roanoke, however, economic development organizations have shifted their focus. The New River Gorge Regional Development Authority, which serves Fayette, Nicholas, Raleigh and Summers counties, is putting lots of energy into boosting homegrown entrepreneurs. That includes small-scale farmers, as the organization works to build up the local food economy. It also spun off Active Southern West Virginia, a nonprofit that seeks to get more residents active and healthy—with the intended benefit of making the region’s workforce more attractive to prospective employers.

“We’re hoping, as many other rural places have, by focusing on entrepreneurship, those small businesses will happen in a grassroots kind of way,” said Lillian Graning, chief communications officer for the NRGRDA.“

As with Johnstown and Roanoke, changing the conversation and self-image of southern West Virginia is part of the challenge.

“We can be our own worst enemy as far as an inferiority complex, but just in the time I’ve been here the conversation has become more pragmatic and less emotionally charged,” said Graning. “We have been able to get away from the ‘diversification = anti coal’ idea into a larger pie model. We’re not taking anything away from somebody and giving it to somebody else; we’re growing the economy. We’re diversifying and building more businesses.”

But while the conversation is shifting, other challenges remain and the new administration may be adding some new ones. Trump’s so-called “lean budget” severely cuts federal programs that aid in regional economic development, slashing Appalachian Regional Commission, the Economic Development Administration and the U.S. Department of Agriculture’s infrastructure budget, all of which provide key funding for programs and infrastructure. Congressional leaders have said they’ll preserve these programs, but even partial cuts could set back economic development efforts in Appalachia.

Then there are the challenges inherent to Appalachia’s climate. The outdoor economy still operates largely on a seasonal basis. In the New River Gorge, rafting season runs from April through October, with mountain biking and rock climbing providing a buffer “shoulder season” on each end. The outdoor industry provides mostly service jobs and full-timers often work as guides during the rafting season, then head to ski towns during the winter months.

Kenny Parker, co-owner of Fayetteville retailer Waterstone Outdoors, said his business has grown slowly but steadily since it was founded in the mid-’90s. He’s seen the rise of a local outdoors culture that plays in the gorge but flocks to local restaurants afterward. Parker sees more potential, but also missed opportunities, such as a friend in computer programming who moved to Fayetteville for several years ago but recently left.

Adventure as the fabric of community

Kelly Jo Drey, who works in county offices practically next door to Waterstone, is among those trying to make a difference. Drey is the Fayette County resource coordinator, but also is training to become a guide for Adventures on the Gorge this season. She’s developing a proposal to turn an 84-acre property into a farm incubator, as well as considering how to revitalize empty downtown storefronts in Mount Hope, a nearby city hit hard by floods in 2010 that’s also the target of an Active Southern West Virginia trail project. Drey also oversees Wolf Creek Park, a 1,000-acre county industrial park that was launched in 2006 as a live/work/play/learn mixed-use development.

“We thought to market to the outdoor industry to see if manufacturing might occur here,” said Gene Kistler, who sits on Wolf Creek’s board and also co-founded Waterstone Outdoors with Parker. “The idea was we’ve got this great place, with the outdoors at your fingertips, and technology allows you to work from anywhere.”

The park’s momentum was damaged by the recession of 2008 that ravaged the global economy, but the property still remains the county’s focal point for leveraging its outdoor assets into well-paying jobs. As of April, it’s home to craft brewery Bridge Brew Works, tunneling equipment maker Robbins Company, the county’s E-911 center, a WVDEP office and several single-family homes.

Drey walks along a series of boardwalks across a wetland at the park, describing how the structure was envisioned as a place for children to learn and residents to meditate, bird watch or just take a few minutes out of their day. As if on cue, a pair of red-breasted mergansers flush from the underbrush and take to the sky.

Drey believes draw of the gorge and other assets goes well beyond tourists: Outdoors culture is baked into the community.

“Certainly there are plenty of tourists that come here to spend time in the gorge and sample what we have to offer, but there are also a lot of people who come and live here year-round,” Drey said. “There are a lot of adventure athletes who make their lives here. That adventurous spirit is an important part of the fabric of the community.”

Further into the park, however, the long-term vision for Wolf Creek runs into reality, as the road abruptly ends at a graded 6-acre pad that sits vacant. There’s more land to be cleared and graded in the 1,000-acre park, but the county has been using the sale of sites to fund road building, so it’s got to sell that cleared pad to obtain the funding for the next phase.

In a way, this spot works as metaphor for the outdoors industry in many Appalachian communities. The region’s path forward leads to wildlands and some feeling of the unknown. But with investment, hard work and some good luck, perhaps those outdoors assets can be leveraged into jobs.

A native of the Alleghany Highlands, Mason Adams (@MasonAtoms) has worked as a journalist in the Blue Ridge Mountains since 2001. He lives with his family plus dogs, cats, chickens and dairy goats in Floyd County, Virginia. 

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An Economic Transformation

How to Get Out of the Debt Trap When Banks Won’t Help

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Photo: Pexels

In many rural areas, a lack of banking options has led to an increase in predatory lending. In eastern Kentucky, a new nonprofit is fighting back.

Erica Knight had been in charge of her own money since she was 16, when she had her first job.

“I was always very independent and very good with trying to manage my own money and do it all on my own,” Knight said.

But when she got married in 2017, she realized that she and her husband needed to get their finances in order before they could think about planning for their future. Knight had racked up $20,000 in credit card debt over 10 years, from the time she was 18, just trying to make ends meet. Most of the debt she incurred on credit cards was for everyday expenses, such as gas for her car and groceries.

“A lot of the time, a credit card was the difference between me having food to eat and gas or not,” Knight said. “It wasn’t irresponsible things I was using it for; it was livelihood.”

She was working two jobs—as a bank teller and a waitress—and attending college, all while trying to tackle her debt. But she said it wasn’t until she was married and realized her debt was about more than just her, that she understood how deep a hole she was in. She went to her local bank in Hazard, Kentucky, for a debt consolidation loan, but was told the amount she needed was more than they could provide.

That’s when she heard about Redbud Financial Alternatives, a nonprofit community development financial institution based in Hazard. The 5-year-old organization was created by the Housing Development Alliance, a local builder of affordable homes, to offer low-interest consumer microloans to people in a four-county area in southeastern Kentucky. The intent is to help them fill the various gaps in their finances that make it difficult for them to pay off their debt and get on a more sustainable path.

“I think a lot of people are making a [financial] decision based on short-term needs and hope they’ll figure something out for the long term,” said Mae Humiston, the CDFI director for Redbud. “One-time emergencies can have long-lasting impact if they don’t have access to affordable credit.”

The nation already has a worrisome trend in the “unbanked”—households with no bank accounts and reliant on nontraditional financial sources. But the problem has spread to middle-class households that already have bank accounts and still find themselves having to go outside the banking system. According to a 2017 survey by the Federal Deposit Insurance Corp., 18.7 percent of people nationwide were “underbanked.” In Kentucky, the rate is 19.6 percent.

As more and more middle-income earners try to bridge financial gaps and manage their money, they are at risk of being taken advantage of by offers of high-interest credit cards, payday lenders and other personal finance companies. However, most consumers don’t realize the terms they’re agreeing to, and they end up stuck in a snowballing cycle of debt because the high-interest charges keep them from paying off their principal balances.

Organizations such as Redbud are attempting to offer alternatives to predatory lenders, to help people get back on track and not end up in dangerous levels of debt. They provide affordable credit to people who in the past may have turned to more exploitative sources.

“The people who pay the most for credit are the people who most can’t afford it, and we are condemning them to a lifetime of debt, and we need to think about how to restructure the system so this doesn’t need to happen,” Humiston said.

She said institutions such as payday lenders, whose business model depends on high credit costs, have primarily been an urban phenomenon, but as rural banks and financial institutions have closed or been bought out in recent years, rural people’s assets have eroded and their access to good credit has become limited, and predatory lenders have moved in to fill those gaps.

At the same time, she said, traditional banks have increasingly become spaces for people who already have assets or good credit, and have become less about helping people build assets from nothing.

“We’re looking at where the gaps are and how we can [lend] in a way that’s fairer to people who don’t have access to credit,” Humiston said. She said the current financial system is rigid, and doesn’t allow for the kind of flexibility her clients—and many others in places targeted by predatory lenders—need to get back on their feet and get out of debt. Redbud offers that flexibility, and it isn’t the only institution trying to fill the gaps.

Amy Shir, president and CEO of the nonprofit LHOME in Louisville, Kentucky, said her clients face enormous barriers to financial stability, and most especially because a majority of them are people of color, immigrants and refugees. Louisville is the fourth most segregated city in the country, and LHOME aims to serve communities of color. They’ve made 56 loans in three years, and all but six of them went to people of color.

LHOME, which stands for Louisville Housing Opportunities and Micro-Enterprise Community Development Loan Fund, became certified as Louisville’s only CDFI in June 2018, and now offers an array of loan products that are intended to help community members build assets, including property tax assistance loans, interest-free loans in compliance with Islamic law for Muslim borrowers, and working capital loans to help construction companies owned by women or people of color complete jobs they successfully bid on. The organization also plans to launch a loan product soon to help immigrants and refugees become recertified in the careers they had in their home countries.

Shir said the organization listens to its community and tries to create products that will best serve them.

“It’s an enormous privilege to be able to meet people who have been shut out of the system because of too much student loan debt or credit, and to be able meet them where they are and have a dignified transaction and build trust in a community that has been repeatedly preyed upon,” Shir said. “They begin to see what’s possible and change the narrative about these communities and neighborhoods.”

Redbud offers five loan products, with its “credit rescue” loan being its most popular. This loan allows clients to pay off high-interest credit card debt and offers financial counseling so customers can learn to identify the behaviors that led to them accruing so much debt in the first place. 

This is the loan Knight accessed through Redbud. She said she found it hard to approach Redbud at first because she didn’t want to be labeled as someone who was irresponsible with money. But, she said, the company’s staff always treated her with respect and didn’t make her feel guilty because of her situation. They taught her about interest rates and the ways in which she needed to pay off her debt to avoid paying more in interest over a longer period of time. These were things she said she had never known before.

Redbud was able to loan Knight $7,500—the most that the organization offers. She consolidated another significant chunk of her debt onto a credit card that charged 0 percent interest for a year so she could pay down her principal. Knight hopes she’ll be able to pay down her Redbud loan and then refinance more of her debt with them.

Knight is not alone as a middle-income person who is struggling with significant debt. Humiston said many of Redbud’s clients work in steady middle-class jobs and make their payments. They just can’t overcome the steep interest rates to make significant progress toward becoming debt-free and building their assets.

Knight wants to help shift the narrative about debt, too, and emphasized that getting into as much debt as she did can happen to anybody. In the past, she’s managed other people’s debt in the course of three past jobs, but she still got into a hole she couldn’t get out of. Redbud helped her find a path forward, and she said other people can be similarly helped if they are ready and willing to take back control of their financial lives.

“Credit cards are not the devil; interest is the devil,” Knight said.

She’s hopeful now and said she “sees a light at the end of the tunnel.” She said she has the tools to keep her on the path to debt freedom.

“In time, if we keep making smarter decisions, and really buckle down, I think we will get to the point where we can consider homeownership or whatever the big next step is,” Knight said.

This article was funded in part by a grant from the One Foundation. It was originally published by Yes! Magazine.

Ivy Brashear wrote this article for YES! Magazine. She is the Appalachian Transition coordinator at the Mountain Association for Community Economic Development. She has written for Spotlight on Poverty and Opportunity, Huffington Post and Next City.

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An Economic Transformation

Q&A: Founder of ‘Transformative Model’ of Development Wins National Prize

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Coalfield Development Corp. Founder Brandon Dennison. Photo: Provided

West Virginian Brandon Dennison, founder of Coalfield Development Corp., has received the Heinz Award for Technology, Economy, and Employment. Coalfield Development has combined programs in business development, employment, job training, education and personal development. “No one piece of what we’re doing is anything new,” says Dennison. “But I think the way we’ve put it together is fairly creative.”

The founder of a social enterprise working on entrenched poverty, job creation, and economic change in southwest West Virginia is the recipient of a national award that comes with a $250,000 cash prize.

Brandon Dennison, the founder of Coalfield Development Corp. in Wayne, West Virginia, has been named this year’s recipient of the Heinz Award for Technology, Economy and Employment. The award is one of several given annually by the Heinz Family Foundation. The awards honor the late Senator John Heinz of Pennsylvania.

The Heinz Family Foundation said in its announcement that Coalfield Development Corp. employs a “transformative model of employment-based social enterprise [that] is helping to end generational poverty and create a new, diverse and environmentally sustainable economy for West Virginia.”

Coalfield Development serves a largely rural area along West Virginia’s border with Kentucky, along with the metropolitan areas of Charleston and Huntington. The nonprofit has created a family of businesses that employ 200 workers.

Dennison has said that Central Appalachia suffers from an over-dependence on the coal industry and that Appalachian values such as self-reliance and creativity can be key ingredients in building an alternative economy.

Last year, Coalfield Development received a $1 million prize from the Communities Thrive Challenge, sponsored by Mark Zuckerberg and Priscilla Chan and the Rockefeller Foundation.

I asked Dennison about the Coalfield Development Corp.’s activities and why he thinks the organization is receiving national attention. And, of course, I asked him what he intends to do with the $250,000 prize. The interview is edited for clarity and length.


Tim: You have talked about tapping into Appalachian creativity, gumption, and grit as sort of a bedrock of how to build a new economy in the region. What do you mean by that?

Brandon: Our theory of change is that there have been a lot of do-gooders and philanthropists and government agencies that have been truly well intentioned in Appalachia but have not gained a lot of traction. Because I think it feels like, oftentimes, that it’s trying to change this place into something that it’s not. There is change that has to happen here in Appalachia, but it should be change that’s more on local terms, and change that honors all the things that are really good about this place.

Our approach starts with what’s really good about the place and builds from there, rather than emphasizing all the problems, and other than, you know, making Appalachia feel like it’s some alien, backwards, messed up, hopeless place.

Tim: Tell me more about what you see as the things that are working, or the things that are good that that can be built on.

Brandon: I think there is a really special creativity here in Appalachia. I think there’s a frugalness. I think Appalachian people tend to not be real wasteful, and tend to not really put on airs. We don’t need a lot of fancy, expensive stuff to be happy. I think we are, by and large, more in touch with our landscape and our environment than maybe some folks in more urban settings might be. There’s an ingenuity, so we’re able to think creatively, work with what we have at our disposal, put things together based on what we have and come up with solutions.

Tim: Are you saying that Appalachians have these special characteristics that are different from other parts of the country? I know the statement, “We’ve mined the coal that fed the industrial revolution and created wealth for others.” But other parts of the country have their own stories. In the Midwest they can say “We’ve grown the food.” Detroit could say, “We’ve given people transportation and mobility at an affordable cost.” So, do you see Appalachia as unique in its bedrock culture and what can be built upon? Or is there something going on in Central Appalachia that’s more universal?

Brandon: Well, when you talk about those histories and farming — just, in one fell swoop, when the soybean farmers were hurt by the tariffs, the USDA wrote out like a $1 billion subsidy program for farmers affected by that, in one fell swoop, lickety split.

Of course, Appalachia is not unique in being the only region that’s contributed to this country’s development in really significant ways. But I think we are probably – along with the Mississippi Delta and our Native reservations — unique as being under-invested in by the country. Our country has set up a system that has extracted wealth from Appalachia and other natural resource communities. The wealth has flowed out of here, and what’s flowed out of here is much greater than what’s flowed back in.

Tim: What are some of the things that you’re doing at Coalfield Development that tap the region’s creativity and grit?

Brandon: We’re creating new businesses, and the businesses are staffed by local people. The businesses are designed to show what a new economy that’s not just coal can look like. They’re designed to tap into that creative ingenuity and that grit that I really believe is here and that I see is here every day.

So, I think what makes [Coalfield Development] different from other social enterprises is we put people straight to work. We’re not just a training program where you get a certificate. We’re an employer, and we’re an employer of local people. We’re betting our whole business model on the ingenuity and the creativity of local people.

Tim: What are some of the different enterprises you’ve got going there with the participants?

Brandon: We helped start the first solar installation company in southern West Virginia. We have a construction and renovation company, a woodworking company, an agriculture enterprise. And our newest one makes T-shirts out of recycled materials. We have a license with Major League Baseball, which means we can sell shirts with team logos on them. It means that that we are in the gift shops of six Major League Baseball stadiums.

Tim: You get people employed right away, but you’re also doing more than that. Tell me what the other things are that you think need to be in place for somebody to be successful in creating and finding their own job.

Brandon: I think that’s another piece of our theory of change. In Appalachian economic development circles, there’s so much talk about — normally it’s the politicians — “We’ve got to have jobs, we’ve got to have jobs, jobs, jobs, jobs.” And that’s true, but it’s really an incomplete conversation. Because it’s not just joblessness we’re dealing with in Central Appalachia, it’s poverty. And it’s generational poverty. A minimum-wage job is not enough for a person to claw their way out of generational poverty. It really takes a holistic set of support.

So, we always knew that we would be a direct payer of wages, and we would create jobs. That was a key hook. But the community college piece was always really important, because that’s a credential that a person can keep with them for the rest of their life that will help them earn more and provide more to the local economy.

And then we layered on the “threes” [element of the program] because we realized that, OK, we got a job, we’re advancing education, but there’s still all these other challenges that are getting in our way — mental health challenges, physical health challenges, financial debt, transportation problems, childcare problems, addiction issues. Even things like just attitude, like, you know, no sense of optimism. That can shape this sort of an attitude that needs to be kind of coached through. So we decided to carve out three hours every single week to work on deeper life stuff, and to reflect together, and hold ourselves accountable to goals, and life plans. I think that’s the most important piece of the whole deal, actually.

I think we had a realization that if you’re just training people for entry level jobs, you’re almost cementing poverty, and making it permanent, holding people back from their full potential. …

We call someone who’s worked with us for two years and earned four professional certifications and finished their associate’s degree, we call them a “coalfield champion.” And for coalfield champions, we have a 100% success rate for placing them in jobs at or above what they’re making with us and launching successful careers. Literally 100%. [Not all the members] achieve champion status. That’s more like 70%, about two thirds, give or take.

There’s an important takeaway there, too. A lot of times when it comes to economic transition, it’s like, “Oh, well we’ll just retrain those people, and that’s the solution.” And that’s totally insufficient. We can train people in all kinds of jobs, and they can have all kinds of certificates. But if there aren’t healthy, diversified businesses and all those different kinds of jobs, then that certificate’s worthless. I think our conversations about job training and retraining need to go a lot deeper.

Tim: And have you been able to locate the different enterprises in different places? Are they all in one spot?

Brandon: To drive from the north end of our service area to the south end, it’s three-and-a-half hours. So, we are spread out. It’s logistically challenging, but we definitely feel obligated to be a job creator and opportunity provider in those smaller communities.

Tim: In a guest column in Newsweek you talked about some of the public and private entities that are helping in the region. You feel like there’s a role for outside or public entities to play in development?

Brandon: Very much so. I think ultimately we’d like to have this thriving private sector economy of locally owned businesses who do trade together, but we’re so far from that reality that I don’t see any way forward without significant federal support. Now, the way the federal support comes in, the processes are actually really important. I think the federal support should come in with strong local grassroots on-the-ground partners. And then I think foundation support, government support, and certainly your private business support — it’s going to take all three sectors to get where we want to go.

Tim: Coalfield Development has received national attention for your work. And now the Heinz Award. What is it in your work that folks are able to say, “Hey, that’s something I want to get behind”?

Brandon: I think it’s so tangible because we hire people, and we take on these physical spaces. People connect with it because it’s just real in that way. … No one piece of what we’re doing is anything new. But I think the way we’ve put it together is fairly creative. There are other on-the-job training programs, there are other community-college programs, there are other life-skills programs, but we’ve kind of pieced it all together in a holistic, comprehensive way that seems to connect with a lot of different stakeholders.

Tim: The prize comes with a substantial cash award. Do you know how you want to use that money yet?

Brandon: Yeah, I’m working on a plan, but I have some pretty good initial thoughts. The vast majority of it will go to Coalfield Development, and one of the things that I’m going to do is set up a lifelong learning fund. And so, this will be for Coalfield staff and employees to advance their careers, both personally and professionally. So, really just trying to establish a culture in Coalfield that celebrates learning and supports people in Appalachia taking their learning as high and as far as they can.

The other thing I’m going to … but I hesitate to, I don’t want to sound overly self-righteous about it. But I’m going to make some donations to some key partners and entities that have helped me get where I am as well, which will be kind of cool, because you know, so many folks have given to Coalfield over the years, and helped Coalfield, as an entity, and me as an individual, get this far. Now it’s a chance to kind of pay that back.

This interview was originally published by the Daily Yonder.

 
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An Economic Transformation

Minimum Wage Hike Would Have Major Effect In Ohio Valley

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Photo: Steve Rhodes via Creative Commons

A new report from the Congressional Budget Office shows increasing the federal minimum wage to $15 an hour would boost the wages of 17 million workers and lift about 1.3 million people out of poverty. But the CBO warns that could also result in more than one million lost jobs and could diminish overall income for others. 

The report comes as Congressional Democrats prepare to vote on the first increase in the federal minimum wage in a decade. It’s a move that could have a tremendous impact in the Ohio Valley, where low-wage service sector jobs are replacing higher-earning positions in manufacturing and mining in many communities. 

Democratic Congressman Bobby Scott of Virginia, who chairs the House Education and Labor Committee, said the new CBO report makes a strong economic case for a higher minimum wage.  

“Raising the minimum wage will provide a boost in the economy by putting money in the pockets of workers who will spend that money in the economy,” Scott said in a press call. 

Scott is pressing his caucus for passage of the Raise the Wage Act of 2019, which would increase the federal minimum wage to $15 an hour over the coming five years. The bill would also eliminate the lower minimum wage for tipped workers. The federal minimum wage is currently set at $7.25 an hour and hasn’t increased since 2009.

Opponents are concerned that raising the minimum wage could strain employer budgets, add costs for consumers and result in fewer people being hired.

Click for an interactive map from Economic Policy Institute, which advocates for a higher minimum wage. Source: Economic Policy Institute

Regional effects

The Economic Policy Institute, a left-leaning think tank, conducted a separate analysis in February showing how the Ohio Valley region would be affected by a $15 minimum wage by 2024. The policy group’s research shows across the nation about 40 million workers would see an increase in pay and parts of the Ohio Valley would see some of the most pronounced effects in the country.

For example, the EPI report predicts that in large portions of eastern Kentucky, southern West Virginia and southeast Ohio, roughly 40 percent of workers would see some increase in wages.

EPI says some workers employed year-round in Kentucky could see an increase in their average annual income of about $4,000. In West Virginia and Ohio, workers might see about $3,000 more in average annual income. 

EPI Economist Ben Zipperer said, in general, raising the minimum wage can help workers who earn the least, and he said those are typically women and people of color. 

“Minimum wages, because they focus on the bottom of the wage distribution, they affect and raise wages for people who are the least-paid in our economy,” he said.

Zipperer said raising the minimum wage can help reduce pay disparities by gender and race. He also said a federal minimum wage increase would improve incomes even for those working above the current rate. 

“And then also you’re going to be raising wages for people who are just earning about 15 or a little bit more than that as there is some kind of ripple effect,” he said. “It does extend a little bit beyond.” 

The Economic Policy Institute report is based on data from the American Community Survey. The states are broken up into Congressional districts where people live and not necessarily where they work. EPI said the CBO’s report overestimates the number of job losses that would come from raising the minimum wage. 

The policy center of EPI is lobbying for passage of the Raise the Wage Act.

Opponents of raising the minimum wage worry it could cause employers to lay off workers and raise unemployment levels. There’s also concern that raising wages would cause production cost and prices to increase, forcing more people into poverty rather than lifting them out of it. 

The Heritage Foundation, a conservative think tank, argues small businesses would not be able to increase revenue enough to cover the cost of higher wages. The group also said employers would be forced to increase prices or cut costs by laying people off. 

The CBO report notes uncertainty about the responsiveness of employers to a wage increase and how incomes will increase by 2025. 

This article was originally published by West Virginia Public Broadcasting.

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