Friday, October 24, 2014

New Risk Takers Design a Post-Coal Economy

11/27/2012

miner kentucky tattoo Kelli Haywood John Haywood's new business in the Eastern Kentucky coalfields is a tattoo parlor in Whitesburg. Haywood designed and executed this tattoo for Jon Free, a Kentucky native who teaches history at a university in North Carolina. All it requires is a short drive through the mountain towns of southeastern Kentucky to see a people on the defensive.  Defense from what?, you might ask.  For some the enemy is mountaintop removal mining, a sense that the environment and quality of life are in terrible danger from the ravages of mining.  For other people, the threat comes from a “War on Coal” and the belief that their capacities to provide for their families and create opportunity for their children are being taken away.

Both positions of the community are broadcast on vehicles and storefronts, on television and billboards. There are rallies on both sides and countless campaigns. All this effort ends in a question -- the same question on the lips of people from both sides of the argument: What is the economic future of the Kentucky coalfields?

On April 15, 2012 Tom Sanderson noted in Benchmark Journal, a publication on global investment: “This year, with the prospect of a renewed recession hovering over the U.S. economy, it is cheering to see that rural small business looks especially promising.” 

What may have looked like “promise” from the outside felt very different for my husband, John Haywood. When he went into business for himself in July 2011, we had no idea if this change would be financially viable for our family. The truth of the matter is we still don’t know. With coal miners being laid off in the thousands, families moving away from the region to find work, and people seeming to live in fear of a financial doomsday, it is hard to do anything more than work hard, hold our breath, and wait.

gas station Marion Branch Kelli Haywood Mike Hansel, the author's father, checks PCB levels at a reclaimed mine site in Letcher County. Hansel believes the region's future depends on coal. My father, Mike Hansel, has worked in the coal industry for 39 years. That hadn’t always been his plan. Before returning home to Letcher County, Kentucky, and marrying my mother, he went to East Tennessee State University, where he had planned to graduate and go on to teach physical education. But life demanded otherwise; if he was ready to start his family he would need to work, and the coal industry offered him “good money, good benefits” and training that allowed him to stay home with his family. He followed in the footsteps of his father, his grandfather, and his great-grandfather and went to work for the mines. My dad raised our family on coal money, and he now holds a strong view that reliance on coal mining is our region’s economic future.  He cannot see a future without it.

Whether John and I will be able to continue raising our family in our beloved homeland is often on my mind; neither of us really wants to imagine having to leave it again. So as many daughters do, I asked my dad what he thought. If the coal industry indeed does fail, will there be a financial future that will allow John to keep his business open?

My father has replied the same way many times over. As the Environmental Director of his company, he must have such an answer researched and ready. “If the coal industry disappears, the tax burden for each man, woman, and child in the State of Kentucky would increase by approximately $3,500.00 per year,” he told me. The tax increase would be needed to make up for losses of revenue from the Unmined Minerals Tax and the Coal Severance Tax.  According to my father, school funding would be greatly reduced, highway construction and repair monies would vaporize, and support for local businesses would greatly diminish.  These are mathematical facts, “not just numbers wished for or picked from the air by nay-sayers,” he said.  He emphasized that in Eastern Kentucky, where many people are on fixed incomes “the local economy is quite dependent upon a strong coal industry.”

According to the 11th edition of the Kentucky Department for Energy Development and Independence and the Kentucky Coal Association’s publication Kentucky Coal Facts, the coal industry paid $270.34 million in coal severance taxes and $16.9 million in unmined mineral taxes to the state of Kentucky in Fiscal Year 2009-10.  Some $97.3 million in coal severance tax receipts were returned to coal-producing counties for infrastructure improvements and economic development projects.  The booklet also states that the wages from employment in the coal industry made up 43.6% of the total wages earned in Letcher County in 2010.

John opened his business, The Parlor Room – Fine Art and Custom Tattoo, in Whitesburg, the county seat of Letcher County. With coal mining a leading employer here, it isn’t an unfounded concern that the loss of coal jobs would also mean a loss in income for us.

miner tattoo Kelli Haywood Eddie Bentley, an Eastern Kentucky miner, now wears this stunning image of his trade by John Haywood. John has known he’d have to take charge of his own employment from the time he changed his major in college from Art Education to Graphic Design and then to Studio Art. He knew he’d either be doing commissioned or contract work or peddling his own designs, paintings and drawings. His choice to follow an artistic calling and pursue education in art on the college level didn’t come easy. He was continually asked whether he really thought he could make a living at art and was told that in order to do so, he’d have to leave the mountains.

After college, we did leave for Louisville where we both received Masters Degrees and began our careers.  It was then he realized that in order to make a living wage and still remain sane, he’d have to put his artistic skills to use in creative ways. He went under apprenticeship to the award winning tattoo artist Big Daddy Tray (recently featured on the television show Ink Masters) and learned the trade of tattoo.

After the birth of our first daughter, we both realized that something was drawing us out of the city and back home.  So, we followed that intuition.  It was back in the mountains where we both decided to be our own employers. I went into service and John, after a few years of contract work and selling his paintings, decided to explore the possibilities that opening The Parlor Room would bring.

Parlor Room sign Kelli Haywood The Parlor Room is one of five new businesses that have opened recently on Main Street in Whitesburg, KY. It seems John’s entrepreneurial endeavors are following a rural trend.  “Since 1969, the number of self-employed rural workers has expanded by over 160 percent to 5.6 million. In comparison, there was only a 64 percent growth in rural wage and salary workers over the same time period,” writes Stephem J. Goetz ("Self-Employment in Rural America: The New Economic Reality," Rural Realities, Vol. 2: Issue 3, 2008).

Goetz goes on to cite other findings, ominous ones for us. “In the last four years, self-employment earnings relative to earnings of traditional workers have reached historic lows. In 2005, the average self-employed worker earned only one-half of what wage-and-salary employees captured ($16,851 versus $31,596).”  This affirms that for a rural business owner to make an income, there must be wage earners who are earning enough to spend their hard earned money at the business,  sharing a little piece of the pie.       

Unlike my father, John never really saw entering the mines as a realistic option. It wasn’t that he felt it wasn’t good work or that he wasn’t capable, but his grandfather had counseled him against it. He had always told John, “I want you to get your education and stay out of those mines.” 

McIntire Risner, John’s grandfather, had quit school in the 6th grade to go into the mines for work and stayed there until he retired.  He was active in the United Mineworkers of America and managed to make a good life for himself and his family. But he was also diagnosed with Black Lung and suffered with poor health until he passed away in 2005.  Having always looked up to his hard working Papaw, John took his advice as gospel. 
John Haywood tattoo artist Kelli Haywood John Haywood works at his shop.  Open for just 16 months, his Parlor Room already has taken on another tattoo artist and two apprentices. “The meaning of my Papaw’s advice has changed over the years,” John says. “He also told me that nobody could take away what you know in your heart and mind. I am sure in his lifetime he faced unemployment and layoffs many times. I don’t think he wanted me to fall victim to that as well. Even though there have been times in my life where I wished that I could just hang it up and get a 9-5, I knew I couldn’t let down my Papaw. When I hear about layoffs, and people losing their jobs, I feel a little bit safe in knowing that by listening to what he said, I am now my own boss and practice a trade that I can take with me wherever I go.”

I’m not sure what Mack expected when he told John to go to school. I wonder if he thought it would mean more money or an easier life, or if he foresaw the economic instability in coal’s future. It’s not surprising, after reading Goetz’s “one-half less” statement, and in light of the 31.8% employment rate in coal for Letcher County, that John earns (at this time) less than a miner; the volatility in future mining jobs could possibly mean he’ll earn even less in the future.

“The longstanding historic trends in the coal industry in Kentucky, combined with the reality of a rapidly changing energy landscape, pose challenges to the long-term role of coal as a provider of employment and source of tax revenue for Kentucky,” writes Mountain Association for Community Economic Development.  Despite this truth, our plans for the future include living in the coalfields of southeastern Kentucky. John feels like it is better to stick it out and see what happens than to change the course before we know we have to. He didn’t take out any business loans to start The Parlor Room. He used a credit card and income tax returns to fund the start-up costs.  The shop’s location on Main Street is surprisingly affordable and the operation itself doesn’t have to be expensive to be high-quality.  After 16 months, the shop pays for itself and the business has grown. Now John has another artist working with him and has taken on two apprentices.

parlor room Kelli Haywood Entrepreneurs like John Haywood are taking a risk, but these days the Appalachian coal economy is risky business, too. Haywood, shown here at the office of The Parlor Room, was discouraged from working in the mines by his grandfather. Since opening The Parlor Room, John has been joined on a reviving Main Street by new start-ups: a restaurant, a consignment shop, an art gallery and, much anticipated, a new bakery.  In Whitesburg and the surrounding towns in Letcher County, we see the trend in entrepreneurship very clearly. Joining the well established small business community are several men and women who have begun photography businesses. There are new embroidery shops, up-scale consignments, an outdoor sports and apparel shop, and a noticeable abundance of peddler’s malls.

I asked my dad whether he believed, if the coal industry completely dissolved, the region would recover economically. His answer wasn’t comforting:

 “No, and here is why. Eastern Kentucky has no infrastructure to support any heavy industry, nor light industry for that matter. Rail systems have sold track lines and rights of way. Freight lines on highways would create tremendous traffic problems and air pollution from diesel exhaust. There are no natural tourism attractions which would entice outsiders to visit, let alone spend money. You have some nice views, but attractions, none.  Tourism could not flourish; it also has no infrastructure.” 

In the face of this, stands the revival of Whitesburg’s Main Street. Somehow hope resides there, and in other areas of the region. 

bright skeleton tattoo Kelli Haywood Local businesses like The Parlor Room could benefit if tourism catches hold in Appalachia. John Haywood designed and inked this tattoo for a psychology student. You’ll also hear vague suggestions that a tourism economy could transition southeastern Kentucky, and Letcher County in particular, from coal. For a tattoo business, tourism would offer new clientele. John’s work already has brought people from surrounding counties, cities, and states – even from Europe -- to Whitesburg for a tattoo.  But the larger picture doesn’t seem so promising.  At best, if we were able somehow to attract outsiders in, we’d have seasonal income and the sorts of jobs that provide for the single person or student but not enough for benefits or the family pay that raising children requires.  It would take work and lots of it to give Whitesburg even a good shot at attracting enough visitors. The work would have to begin now. No, this hope we see in newly lit shop windows of Main Street isn’t about tourism.  

In some small compartment the larger local consciousness, there’s the “make do” attitude that has sustained the Appalachian people for hundreds of years. Whether a person stands on the side of the coal industry or feels the industry is the detriment to our well-being isn’t going to matter when we are faced with having to transition our economy from coal. After the likely mass exodus, like those we have seen in our past when coal production declined, those left behind -- and those who choose to stay -- will have to find a way to work together to provide for their families or live in dire poverty.

I dare say that a way will be found.  I honestly don’t know if John and I will be in the group that tries to work it out or in the group that goes --  or if, in the meantime, we will pack up the house and head on out to a community that isn’t facing such a critical position, such hostility toward those of the opposite opinion, and such day-to-day turmoil.

Dad says, “If the coal industry goes away, the only thing left in eastern Kentucky would be those singing kum-ba-yah around the campfire to deaf ears.”  Who knows what would come of that?  I’ve been around some pretty productive campfires - and not. What if, though, this little pocket of d.i.y entrepreneurs is the beginning of something new?

Kelli B. Haywood is a Lamaze certified childbirth educator, birth doula, and certified prenatal yoga instructor.  She lives in southeastern Kentucky with her husband and two daughters.  See her weblog about childbirth and prenatal care: Birthtrue.

Editor's note: For more perspectives on the Eastern Kentucky economy, we recommend Dee Davis's "Living in the Fixer-Upper" and Thomas Miller's "Proximity Matters."