Coal Miners Get the Shaft Again

The union movement in the United States may not have begun in the coal fields, but it arguably became a major force in the American economy, in American politics, and in the national life of the United States because of the stands taken by pro-union miners in coal fields from the Appalachian Mountains to the Rockies.

Today, in West Virginia, we see the unraveling of the last vestiges of union rights in the coal fields. Over the last few decades, two major coal companies, Peabody Energy and Arch Coal, have negotiated contracts with their miners that included good pensions and health-care benefits for their retirees. To get out from under those obligations, the companies created a subsidiary, Patriot Coal, to which they sold their deep-mining operations. In effect, they separated out their assets that have been declining in value with the shift away from deep-mining and to surface mining, which in the Appalachians includes the controversial practice of “mountaintop removal,” which is a euphemism for mechanically stripping away everything else that makes up a mountain in order to get at its core of coal. And, at the same time, Peabody Energy and Arch Coal saddled their newly created subsidiary, Patriot Coal, with the substantial corporate liabilities to meet the pension and health-care obligations to miners that had accumulated over decades. Rather quickly and very predictably, this new subsidiary–created precisely and cynically for this purpose–declared bankruptcy, and as part of its plan to emerge from bankruptcy, it has asked the courts to excuse its pension and health-care obligations to the miners.

It’s all very legal, and it is nothing less than legally permitted theft. It stinks.

Most of the companies that have been similarly “over-burdened” by pension liabilities have simply not set aside promised pension funding but have, instead, used the “available” revenues to support corporate expansion primarily intended to drive up stock prices, which not coincidentally have been directly linked to and have driven up executive compensation. Everyone has been walking away richer, except of course for the workers who have never seen the pensions that they were promised and that they were very much depending on. And let’s be very clear, these pensions are not the equivalent of bonuses; they were negotiated as part of the workers’ total compensation and were sometimes preserved in negotiations in lieu of higher salary increases.

Things have become so skewed that companies can almost routinely free themselves of any long-term obligations to their employees. The Far-Right sees nothing wrong with this sort of bad faith. The GOP is, after all, the party that would like to see the federal government similarly free itself of its obligations to retirees who depend on social security and Medicare. And the Democrats have become such ineffectual supporters of organized labor that they cannot even extend themselves to force votes on nominees to fill vacant positions on the NLRB—even when President Obama has nominated Republicans to fill two of those open positions, a gesture of non-partisanship that, at this point in the game, seems so obstinately optimistic as to be ridiculously idiotic.

Deep-mining of coal is an industry in decline, and as “surface” mining becomes increasingly a very automated industry, mining, like manufacturing is supporting fewer and fewer jobs. There is nothing that the formerly large and powerful industrial unions can do about this trend. They cannot protect jobs that machines can do much more efficiently, and trying ineffectually to do so has, arguably, cost those unions more in credibility and influence than even the dues that they have lost.

So what is to be done?

When I started contributing to this blog almost a year ago, one of my first posts was “Restoring the Middle-Class by Refashioning the Appeal of Unions” []. In that post, which might have been titled “ . . . by Redfining the Function of Unions,” I offered a handful of suggestions on how unions might reestablish the value that they have for workers. Specifically, I suggested that since unions no longer have the leverage to force companies to meet their long-term promises to workers, the unions should pool their memberships to provide benefits, including pension plans, at low cost to their members. In this way, the benefits will be portable and move with a worker from job to job. The issue of benefits will be taken out of any negotiations over compensation, and salaries should be forced upward because workers will expect those salaries to allow them to cover the cost of their benefits, which they themselves will to some extent control. The unions will regain lost influence because membership will not be dependent on employment with a given company. Workers will not even have to belong to bargaining units in order to join unions. In fact, as membership in these newly defined unions grew, I would suggest ultimately going back to the old concept of “workers associations” to make labor law—and right-to-work laws—moot. Doing so will remove the talking point that some workers are being “forced” to join unions and will make joining a union, again—and perhaps more than ever–a desirable personal and professional choice and an advantageous financial decision.

One of the truths that has been lost in the decline in union membership and in the rise of anti-union rhetoric over the last three decades is that large corporations used to view having a unionized workforce as a positive thing because labor contracts insured stability in terms of both workplace operations and financial liabilities. It was only when deregulation created a free for all in corporate mergers and in the creation of one jimmied up financial investment device after another (from junk bonds to mortgage-backed securities), that corporate stability became as much of an anachronism as strong unions.

2 thoughts on “Coal Miners Get the Shaft Again

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