Future of workers uncertain as third-biggest US coal company declares bankruptcy

E.A. Crunden

E.A. Crunden Reporter, ThinkProgress

The third-largest coal company in the United States has declared bankruptcy, leaving the future of its more than 1,000 workers uncertain. The announcement is also the latest indicator that the faltering coal industry is spinning further into decline despite the efforts of President Donald Trump to save it.

Wyoming-based Cloud Peak Energy filed for Chapter 11 reorganization on Friday, a move that has been expected since at least the spring. The company has pointed to a weak market as a leading reason for its struggles, in addition to sluggish success in expanding exports. Officials said the company’s mines will continue to operate throughout the bankruptcy process; Cloud Peak operates two mines in Wyoming and one in Montana.

“While we undertake this process, Cloud Peak Energy remains a reliable source of high-quality coal for customers,” Cloud Peak President and CEO Colin Marshall said in a statement.

The company’s workers lack union protections. But even coal miners backed by unions are at risk — a ruling earlier this year allowed a coal company to abandon union contracts. And broader threats to federal funding for miner benefits are jeopardizing pensions for tens of thousands of workers.

Cloud Peak’s financial troubles reflect the broader realities of coal, which is being displaced by cheaper energy sources, including natural gas and renewables. Since 2015, major coal companies Alpha Natural Resources, Peabody Energy, Arch Coal, Mission Coal, and Westmoreland Coal have all declared bankruptcy amid falling profits and increasing concerns over long-term viability.

While that trend has continued through several presidential administrations, more coal plants closed during Trump’s first two years in office than during the entire first term of the Obama administration.

In total, at least 50 U.S. coal plants have shuttered under Trump as of this month, according to a Sierra Club report released last week. The uptick reflects market realities but it also comes despite the White House’s best efforts to revive coal.

Trump has strongly supported the coal industry since becoming president, going so far as to advocate for a controversial bailout of the struggling sector. While that plan has fallen by the wayside amid pushback, the administration’s larger backing has not. Documents obtained recently under the Freedom of Information Act (FOIA) show that the Interior Department has even altered federal endangered species protections in order to help the coal industry.

Meanwhile, workers on the ground are being severely impacted. In February, a judge ruled that bankrupt coal company Westmoreland could legally abandon its union contract obligations with United Mine Workers of America (UMWA). That decision has compromised the health care benefits and pensions once promised to hundreds of current and retired miners.

At the time of the ruling, a representative for UMWA told ThinkProgress that many of those impacted are sick and unable to work after years spent in coal mines, leaving them in need of health care.

Westmoreland’s workers are unionized, but that isn’t the case for Cloud Peak. Bill Corcoran, regional campaign director for the Sierra Club’s Beyond Coal project, said Monday that the Wyoming company’s approximately 1,200 workers lack union protections and that their future is uncertain following the bankruptcy news. As Cloud Peak has edged towards bankruptcy, Corcoran told ThinkProgress, the company’s workers have already endured the brunt of the fallout.

“[Cloud Peak] has typically slashed or eliminated health care benefits for their workers,” he said, pointing to a larger trend of coal companies cutting worker benefits while bolstering the bonuses given to executives in order to incentivize them to stay.

The impact of coal company closures on their workers has long been a concern for unions and coal communities, but the issue has gained heightened prominence recently. As climate change becomes a leading issue for the U.S. public, lawmakers have faced a conundrum over how to protect those most impacted by a shift away from fossil fuels — namely, workers.

Under the Green New Deal resolution proposed in February by Rep. Alexandria Ocasio-Cortez (D-NY) and Sen. Ed Markey (D-MA), coal miners and other impacted workers would see a “just transition,” one that would theoretically protect their livelihoods.

It has been unclear exactly what such a shift would look like, but unions and labor rights organizations have said a plan like this will be crucial to secure their support. Some unions have been skeptical of the Green New Deal precisely because they have not yet seen legislation that would guarantee the protections of current fossil fuel workers.

Meanwhile, outside of union protections nearly 100,000 coal miners are at risk of losing their pensions by 2022 or sooner as coal companies continue to edge towards bankruptcy. The average benefit provided by the federal Pension Benefit Guaranty Corporation (PBGC) is only around $600 a month, but current and retired miners say that amount is critical to their well-being. The PBGC is heading towards insolvency, with bipartisan efforts in the Senate to rescue the fund currently stalled.

Corcoran emphasized that it is unclear what might happen to Cloud Peak’s current workers and that it is hard to say how the company might proceed. But he noted that the current downward trajectory of coal is at odds with worker security.

Efforts by Trump and lawmakers supportive of the coal industry are also failing to address that long-term problem, Corcoran said, noting that they have steered away from proposals to retrain workers in the renewables sector, for example.

“The real question,” he said, “is how are we helping workers transition?”

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Reposted from ThinkProgress

Posted In: Allied Approaches

Union Matters

Federal Minimum Wage Reaches Disappointing Milestone

By Kathleen Mackey
USW Intern

A disgraceful milestone occurred last Sunday, June 16.

That date officially marked the longest period that the United States has gone without increasing federal the minimum wage.

That means Congress has denied raises for a decade to 1.8 million American workers, that is, those workers who earn $7.25 an hour or less. These 1.8 million Americans have watched in frustration as Congress not only denied them wages increases, but used their tax dollars to raise Congressional pay. They continued to watch in disappointment as the Trump administration failed to keep its promise that the 2017 tax cut law would increase every worker’s pay by $4,000 per year.

More than 12 years ago, in May 2007, Congress passed legislation to raise the minimum wage to $7.25 per hour. It took effect two years later. Congress has failed to act since then, so it has, in effect, now imposed a decade-long wage freeze on the nation’s lowest income workers.

To combat this unjust situation, minimum wage workers could rally and call their lawmakers to demand action, but they’re typically working more than one job just to get by, so few have the energy or patience.

The Economic Policy Institute points out in a recent report on the federal minimum wage that as the cost of living rose over the past 10 years, Congress’ inaction cut the take-home pay of working families.  

At the current dismal rate, full-time workers receiving minimum wage earn $15,080 a year. It was virtually impossible to scrape by on $15,080 a decade ago, let alone support a family. But with the cost of living having risen 18% over that time, the situation now is far worse for the working poor. The current federal minimum wage is not a living wage. And no full-time worker should live in poverty.

While ignoring the needs of low-income workers, members of Congress, who taxpayers pay at least $174,000 a year, are scheduled to receive an automatic $4,500 cost-of-living raise this year. Congress increased its own pay from $169,300 to $174,000 in 2009, in the middle of the Great Recession when low income people across the country were out of work and losing their homes. While Congress has frozen its own pay since then, that’s little consolation to minimum wage workers who take home less than a tenth of Congressional salaries.

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