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The advantage of unionised Appalachian coal mines

APPALACHIA'S unionised underground coal mines are safer and more productive, new analysis by ener...

Anthony Barich

Combining the past two years of health and safety data from the US Mine Safety and Health Administration and union status data from the US Energy Information Administration, SNL found that unionised underground mines in Central and Northern Appalachia produced about 94,091 tonnes of coal for every injury reported in 2013, compared to 71,110t at non-union mines.

Last year, the gap was narrower at 79,001t at union operations, compared to 76,087t per injury at non-union operations.

SNL Energy's analysis looked at all active underground coal mines in Central Appalachia and Northern Appalachia, comprising 16 union and 241 non-union mines in 2014, and 18 union and 308 non-union mines in 2013.

All underground production methods were included in the analysis.

Underground union mines in the region produced more tonnes for every injury reported despite research suggesting that unionised miners were more likely to report injuries that had occurred on the job.

A 2012 study authored by Stanford University labour regulation expert Alison Morantz found that unionisation is associated with a 13% to 30% drop in traumatic injuries and a 28% to 83% drop in fatalities.

She concluded that unionisation tends to predict higher total and non-traumatic injuries in the data she analysed from 1993 to 2010, suggesting that injury reporting practices differ between union and non-union mines.

"Interestingly, the union safety effect on traumatic injuries seems to have escalated just before the turn of the millennium," Morantz wrote.

She proposed several possible explanations for this trend, including an overall improvement in labour relations since the 1970s, fluctuations over time in the stringency of MSHA's enforcement scrutiny, the growing competitive pressures faced by union leaders and the increasing sophistication and professionalisation of United Mine Workers of America safety programs.

Of the 16 fatalities attributed to the coal industry in 2014, only one was at a union operation, and that that occurred when a miner was struck by a piece of underground equipment at Patriot Coal's Highland 9 mine.

When Patriot announced it was closing the mine just a few weeks after the incident, it left Kentucky without any union coal mines.

SNL's analysis also found that underground union mines produced more coal per man hour.

In 2013, the average coal produced per employee hour at Appalachia's underground coal mines was 3.6t at union operations and 3.08t at non-union operations, making miners about 17% more productive at union operations.

In 2014, underground union coal mines produced approximately 4.09t/man hour, while non-union operations produced 3.54t/man hour, indicating about 16% higher productivity at union operations.

While SNL's analysis found that union underground mines in Appalachia generally were more productive based on tons produced per hour, the firm said this did not account for the cost of each tonne produced, a metric not widely reported at mine-level.

That cost-per-tonne measure could potentially be higher at union mines due to negotiation and legal costs that would not affect productivity measures, or other factors.

One explanation for the higher productivity levels at union mines, at least one study proposed, is that unions tend to pick more productive mines to organise.

"The aspect of mine heterogeneity that we focus on is the width of the mine's seam of coal," the abstract of a study published in Applied Economics and written by St Lawrence University economics Professor Brian Chezum said.

"Wider seams increase productivity. Empirically, we find that unions disproportionately organize mines with wider seams and this accounts for the positive relationship between unions and productivity observed in our data.

“In fact, once seam thickness is accounted for, the estimated effect of unions on productivity is negative."

Within the industry as a whole, the picture is slightly different as SNL revealed a clear pattern that the average union mine is increasing in employees while producing fewer tons of coal, while coal employment has generally increased roughly alongside production totals at non-union operations.

“This is likely due to the higher productivity associated with surface mines and mines in the more geologically favourable Illinois Basin and Powder River Basin, where unionisation has historically been less common,” SNL said.

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