Connect with us

An Economic Transformation

My Cold Kentucky Home: Coal Country Turning To Solar As Heating And Housing Costs Climb



A solar array installed this month at housing nonprofit, HOMES, Inc. Photo courtesy of HOMES, Inc.

This article was originally published by Ohio Valley ReSource.

Joe Oliver and Tony Brown peered into the dark crawl space beneath a Letcher County, Kentucky, home. Already, they could see problems. The crawl space had been blocked off with just a thin sheet of plywood; the posts supporting the house rested on uneven blobs of poured concrete; the whole place reeked of mold. 

A gas leak detector beeped urgently at the meeting of two pipes.

Crawling on elbows and knees, ducking to avoid exposed pipes, Oliver and Brown found flood damage, poor ductwork and one very large spider.

Later, the pair hauled themselves into the homeowner’s attic, appalled at the poor craftsmanship. A flimsy internal door was all that stood between insulated space and an unsealed attic. This homeowner was likely wasting a huge amount of electricity.

Energy auditors assess a Letcher County, Kentucky, home. Photo: Sydney Boles, Ohio Valley ReSource

“I’d say this is about average for houses around here,” Brown said.

Brown and Oliver were conducting a home energy audit for the Appalachia HEAT Squad, a program through the nonprofit Fahe. The program helps homeowners and renters lower utility bills through energy efficiency upgrades.

“We’ve seen housing built without proper beams, foundations, ventilation,” Oliver said, “just numerous issues construction-wise.”

Stagnating incomes and high unemployment have left many in rural Appalachia struggling to cover basic expenses. Housing is no exception. Recent research from the Pew Charitable Trusts found that although prohibitive housing costs are thought of as an urban problem, rural Americans are fast catching up.

A person is considered cost-burdened when rent or mortgage costs exceed 30 percent of that person’s income. A person is considered severely cost burdened when those costs exceed 50 percent of income.

The data show 40 counties in Kentucky, Ohio and West Virginia where the percent of severely cost-burdened homes increased from 2010 to 2017, and more than half of those are rural counties. Nearly a quarter of the region’s rural counties (23 percent) experienced increases in severely cost-burdened households, far higher than the rate of all counties when more urban areas are included.

Click here to view the interactive map on the Pew website. Graphic: Alexandra Kanik, Ohio Valley ReSource

In Letcher County, 12.6 percent of homeowners are considered severely housing cost-burdened, up from 8.3 percent in 2010.

A significant part of that is the cost of energy. Experts say that once utility costs exceed 6 percent of household income, families struggle to meet other basic needs. In some eastern Kentucky counties, the average resident is paying more than 19 percent of their annual income on energy costs. In some counties, the average low-to medium-income household spent more than 40 percent of their income on energy costs.

“I’ve seen bills as high as $1,400 to $1,600 a month,” said Appalachia HEAT Squad project manager James Caudill. “It’s more of an epidemic than a problem.”

The average cost of energy in the state isn’t particularly high. Other factors, including the aging and substandard housing stock, contribute to the cost burden. Facing the combined effects of stagnating wages, growing utility bills and rising housing costs, more residents in rural coal country are looking to energy efficiency and solar power for solutions.

Cost of Warmth

Benham, in eastern Kentucky, was a coal mining town, and until the 1960s electricity was provided by mining company International Harvester. When mining operations closed down, International Harvester sold the power grid to the town. Benham, home to fewer than 500 people as of the last census estimates, is one of only a handful of municipalities in Kentucky to own and operate its own power company.

“Everybody takes care of one another,” Power Board chairman Danny Quillen said. “It’s a close-knit community.” Quillen, 50, grew up in the neighboring town of Lynch.

In 2015, the Benham Power Board began receiving donations for an energy efficiency program called Benham$aves. The program conducted five energy efficiency audits before it shut down for lack of funds. It recently restarted when it received an anonymous donation of over $200,000. Quillen hopes the money will cover 20 more audits.

Quillen received one of the five original audits and it helped cut his power bill from $400 a month down to about $180 a month in winter.

“This is an old coal camp, and these are old houses,” Quillen said, referring to towns that were built and owned by coal companies to house workers. “You’ve got a lot of homeowners in the city that are on a fixed income and are unable to upgrade things that need to be upgraded.”

In Harlan County, where Quillen lives, the average low-to-medium income household spends 27 percent of their annual income on energy costs. The average per capita income in Harlan County is $13,351.

Alexandra Kanik, Ohio Valley ReSource

The impact of energy cost burden on already struggling families can be dramatic. A nation-wide study from the National Energy & Utility Affordability Coalition, an energy efficiency advocacy group, found that 17 percent of people who receive utility cost assistance from the federal Low Income Home Energy Assistance Program, or LIHEAP, had moved in with friends or relatives due to the high cost of utilities. Six percent of respondents had become homeless. Significant minorities of respondents said that because of high utility costs, they had skipped meals, heated their home using their oven, or failed to pay the full energy bill.

Katrina Metzler, the executive director of NEUAC, said the need for energy assistance was much higher than the funds allocated for it. According to her organization, only 23 percent of Kentucky’s eligible population received energy cost assistance from LIHEAP.

“The average LIHEAP consumer is making well below $20,000 a year,” Metzler said. “After rent and groceries, there’s no money for anything else.”

A new homeless shelter in Letcher County has witnessed the impact of utility cost burden first-hand. Jimmy Scott, board member with Saving Grace Homeless Shelter, said he’s seen a number of residents seeking respite from the weather when they can’t afford their bills, or, in some cases, they are in houses that don’t have electricity at all.

“When it gets to the extremes, either in the middle of the summer too hot, or in the middle of winter when it gets close to zero, with no heat, then we see those people,” Scott said. “They have to come somewhere.”

Energy costs push some people to use Letcher Co.’s Saving Grace Homeless Shelter. Photo: Sydney Boles, Ohio Valley ReSource

Housing Woes

When Seth Long isn’t producing maple syrup on his family farm, he runs the Letcher County housing nonprofit HOMES, Inc. Long sat down with Fahe’s James Caudill and explained that functionally, HOMES was the only housing developer in the county.

“There’s not many trained professional builders out there building these houses,” Long said. “Most of these houses around here, you find a carpenter, you pay them an hourly rate, you buy the materials, and you end up with a home. But what you end up with are just energy hogs.”

Mel Jones, Associate Director at the Virginia Center for Housing Research at Virginia Tech, saw that pattern region-wide. “In the aftermath of the recession, we saw construction companies consolidating and smaller construction companies failing,” she said. “That really hit rural places.” Construction of new housing has plummeted since the recession, driving up the cost of existing units.

Much of eastern Kentucky’s older housing stock was designed for coal heat, which required a draft to let out harmful smoke. “Those houses weren’t really retrofitted to handle ductwork,” Caudill said.

Long said many of the audits his organization and Fahe perform on older homes don’t get to energy efficiency upgrades because they exhaust the available funds on safety upgrades first. “The roof is bad, the HVAC is out, the floors are falling through. There’s things that really need to be done. And you go through all that before you can really address the energy efficiency stuff.”

According to energy auditors Oliver and Brown, the most challenging homes to audit and upgrade are manufactured homes. Mobile homes that were built before the 1976 implementation of energy efficiency regulations are especially costly to heat, Jones found. There are about 31,120 such homes in Appalachian Kentucky and 36,106 in West Virginia, accounting for roughly 20 and 28 percent of all manufactured housing in those states, respectively.

Utility Tensions

Rural Appalachian ratepayers have also been hit by the loss of industrial energy consumers. According to the Kentucky Public Service Commission, Kentucky Power, the utility that covers much of eastern Kentucky, has lost 26 percent of its industrial and commercial load since 2010, more than every other Kentucky utility except one.

“The utility’s got certain fixed costs that it’s going to have to pay,” said PSC spokesperson Andrew Melnykovych. “If you have fewer industrial and commercial ratepayers to share that burden, that shifts those fixed costs to residential consumers.”

Because of the cost of transmitting energy and maintaining the system, it is significantly more cost-effective to deliver a large amount of energy to one big industrial consumer than it is to send the same amount of energy to many lower-consumption residential consumers. In order to spur economic development and attract more high-consumption customers, Kentucky Power has sought to offer competitive, reduced rates to certain industrial players.

“Few people want to go back to a time before electricity, so we want to make a system that works for all of us,” said Kentucky Power spokesperson Allison Barker., “That’s why we support economic development, it’s why we offer energy efficiency tips to our customers, and it’s why we want to help the communities that we serve through our acts of appreciation.”

The utility has offered reduced rates to companies including Braidy Industries, which plans to open a new aluminum plant in Ashland, and economic development grants to companies including truck parts manufacturer Silverliner in Pike County.

According to the PSC, energy efficiency, or demand-side management programs, are not primarily about saving customers money: They are meant to help power companies delay the need to invest in new power plants. In eastern Kentucky, the loss of major consumers has meant that wasn’t a risk.

The PSC in 2017 mandated that Kentucky Power eliminate all but one of its energy efficiency programs. Kentucky Power offers heating assistance programs through community action groups, and some customers make use of the utility’s Average Monthly Payment program, which reduces the spike in energy costs in winter months by charging customers for the average of their last 12 months’ usage.

Solar Solution

A recent analysis from the National Oceanic and Atmospheric Administration has shown that much of the Ohio Valley, including Appalachian Kentucky, will see an increasing energy burden as climate change progresses.

“It is very clear that energy expenditures in places like Tennessee, Kentucky, southern West Virginia and Ohio are going to increase 10 to 15 percent, according to the latest climate assessment,” said Union of Concerned Scientistsenergy analyst Joe Daniel.

“There’s increasing evidence that rooftop solar can reduce the energy burden,” Daniel said.

The housing nonprofit HOMES switched to solar power this month to save money as energy bills rise.

“We’re seeing the trend of this cycle and saying, we can’t be in business here 10 years from now if we just go along with this,” Long said. “Thinking about this made us think we need to invest dollars in solar so that in the future we’re not so impacted by these trends.”

Solar energy had already been gaining ground in coal communities, with the Kentucky Coal Mining Museum in Benham turning on its panels in 2017. Now a combination of factors has spurred a rush among groups in the region already looking to renewable energy to protect against future utility cost increases. In June, Letcher County’s Kings Creek Volunteer Fire Department and arts and media organization Appalshop, which is home to Ohio Valley ReSource partner station WMMT, added solar as well.

This is partly driven by a recent change in state policy. Even as HOMES and other nonprofits are looking to solar power as a solution, the state has made it harder for people to afford solar. Kentucky in 2019 passed legislation that reduced the potential return on investment for solar installations, likely slowing residential and commercial shifts to solar power. Like most utilities, Kentucky Power supported the legislation.

Solar systems in operation by the end of 2019 will be “grandfathered” into the law and would be allowed to retain all the financial benefits of switching to solar.

Gwen Johnson’s mother, Mabel, center, cuts the ribbon for the solar installation at Hemphill Community Center. Photo: Sydney Boles, Ohio Valley ReSource

Gwen Johnson runs the Hemphill Community Center in Letcher County. She grew up in coal camp housing. “They were just built out of slats and plaster,” she recalled. “The windows were just single-pane and they weren’t caulked very well, so in the winter when the wind would blow, the curtains would fan in.”

Now, Johnson knows others in her community are in need of a warm place to go. In winter, she opens the center as a warming station. “We just had showers installed, so that when folks have power outages or they have no power, they can come here and warm,” she said.

Johnson said energy bills were often Hemphill’s biggest expense. The community center celebrated the completion of its new solar installation on June 21.

An Economic Transformation

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



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.

Continue Reading

An Economic Transformation

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



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.

Continue Reading

An Economic Transformation

Minimum Wage Hike Would Have Major Effect In Ohio Valley



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.

Continue Reading