“High-Skilled Hillbillies” Become Computer Programmers As Coal Dies Slow Death

In our classic post “This Is Canada’s Depression: Surging Crime, Soaring Suicides, Overwhelmed Food Banks ‘And The Worst Is Yet To Come,” we brought you a few first-hand accounts of the effect oil’s plunge has had on the Canadian labor market.

Bloomberg documented the fate of “Jillian”, described as geology graduate who was “lucky” enough to land a job at ConocoPhilips. Jillian and her boyfriend – also a geology graduate with a job – bought a house before both were laid off amid the crude carnage. “A friend’s company has provided some contract work paying slightly more than employment insurance as Berling-MacKenzie tries to land positions just about anywhere, seeing no postings she qualifies for in her field,” Bloomberg wrote, outlining the grim prospects for the couple.

Then there was Keely Eng, a 27-year-old who held an engineering position at a Cnooc subsidiary from which she was let go as oil prices plummeted. Seeing no end to the rout, Eng simply decided to change career fields. She’s now applying to medical school. Apparently, the price for doctors isn’t subject to sudden, sharp reversals.

And don’t forget 61-year-old Kevin Mulligan who, after being let go from Stampede, resigned himself to helping his wife make Christmas ornaments.

But it’s not just oil jobs that are being shed in what is rapidly becoming one of the most epic commodity bust cycles in history, and the job losses aren’t confined to Canada. The likes of Texas and North Dakota face dire prospects with oil stuck in the doldrums, while Minnesota’s iron industry is “melting” in the face of China’s hard landing.

And then there’s Appalachia. The death of coal as had a dramatic impact on the region, where generations of miners depended on the industry to provide economic stability. 

“These people are prohibited from working and fall to the negative side of the economic ledger for the rest of their lives,” one furious coal baron lamented last year. 

Now, with coal rapidly becoming a black relic of a bygone era thanks in part to cheap natural gas and angry environmentalists, some Kentucky residents have taken up a new profession: coding. Here’s Bloomberg with more:

Jim Ratliff worked for 14 years in the mines of eastern Kentucky, drilling holes and blasting dynamite to expose the coal that has powered Appalachian life for more than a century.

 

Today, he rolls into an office at 8 a.m., settles into a small metal desk and does something that, until last year, was completely foreign to him: computer coding.

 

“A lot of people look at us coal miners as uneducated,” said Ratliff, a 38-year-old with a thin goatee and thick arms. “It’s backbreaking work, but there’s engineers and very sophisticated equipment. You work hard and efficiently and that translates right into coding.”

 

 

He works for Bit Source now, a Pikeville, Kentucky, startup that’s out to prove there’s life after coal for the thousands of industry veterans who’ve lost their jobs in an unprecedented rout that has already forced five major producers into bankruptcy.

 

Few places are as steeped in coal lore as Pikeville, a town of 6,900 wedged into a narrow bend in the Big Sandy Valley.

 

The coal market began to collapse in 2011 as a global glut of the fuel swelled. Prices are down 75 percent since then, and nowhere has that hit harder than in Appalachia. Central Appalachia coal has dropped 70 percent from a record $143.25 in July 2008 on the New York Mercantile Exchange. Pike County’s output dropped to 6.9 million tons in 2015, and its mining jobs fell to 1,285, about a third as many as four years earlier. 

Rusty Justice, a 57-year-old co-founder of Bit Source and a fourth-generation Pikeville native, felt the pinch too. His excavation and engineering company, Jigsaw Enterprises, lost 70 percent of its customer base, including big miners like James River Coal Co., Alpha Natural Resources Inc. and Arch Coal Inc. that all filed for bankruptcy protection.

 

Looking to diversify, Justice and his business partner M. Lynn Parrish watched a presentation about Kentucky’s growing ranks of computer coders, who mostly live three hours west in the “Golden Triangle” of Louisville, Cincinnati and Lexington. They make starting salaries of as much as $70,000, similar to coal miners’ wages.

 

“We didn’t think that was that big of a jump,” Justice said of the miners. “Daggone, these are high-tech workers that just get dirty.”

Well next thing you know, Justice and Parrish bought an old Coca Cola bottling plant and just like that, Bit Source was born. The pair launched radio ads calling for applications from unemployed coal workers interested in becoming programmers.

They expected a few dozen applications. They received nearly 1,000.

Most applicants know “absolutely zero about computer code,” so Bit Souce provides them with five months worth of training in HTML, JavaScript and PHP. 

The company has only hired 10 people thus far, so there’s a ways to go to make up for the 26,000 coal jobs the US has shed, but Bit Source does plan to be profitable by the end of the year.

If he were dead, Robert Murray would be rolling in his grave.

Here’s a look at coal industry employment in Pike county:

And here’s the percentage of the county’s total employed working in coal:

Somehow we doubt Pikeville’s nascent computer programming industry is going to fill the void.

Still, Rusty Justice is optimistic. “The coal industry is dying here,” he told Bloomberg. “But we could be the grassroots of something truly special.”

“We’ve got a lot of high-skilled hillbillies here,” he added.