The Shrinking Middle Class: A Future Beyond Coal

December 26, 2018

When Scott Shoupe was growing up in Hazard, Ky., the playgrounds and streets were teeming with people, and the town had country clubs and golf courses.

But now his hometown, a burg of 5,000 people some 120 miles southeast of Lexington in the heart of Kentucky’s Coal Country, is a shadow of itself. “Today, there’s no downtown business,” says Shoupe, a fourth-generation coal miner who now works at the local economic development agency, Mountain Association for Community Economic Development (MACED). “The homes are falling down because they’ve been vacant for so long,” he says. “There are no jobs here.”

Perry County, home to Hazard, now has about 29,000 people, down from 50,000 in the early 1950s. And some 27.4% of the population lives below the poverty line, far more than the national average. Peter Hille, president of the MACED, says 2012 was a tipping point, when many coal-mining jobs in Eastern Kentucky evaporated as natural gas prices fell below those of coal. Employment in the sector fell by half “almost overnight,” he says. Unemployment in the broader region has stood at about 10% for years. These days, the top employers include a group of regional hospitals, a rehab center, a UPS sorting facility, and a call center. For Shoupe, a wage of $16 to $20 an hour now qualifies as good money—“but it’s still not like making coal-mining money,” he says, when he earned almost twice that.

The town faces an uphill battle in diversifying its economy. But residents are trying.

Hazard entrepreneur Joey McKenney founded Appalachian Apparel Co. in 2017, designing and making products himself. He recently opened a store in downtown Hazard, hoping to be the spark that revitalizes a once-vibrant city center.

McKenney says he’s been told that he wouldn’t be successful because the coal industry is fading. His response? “There are people here who refuse to give up.”

A version of this article appears in the January 2019 issue of Fortune as part of the special report, “The Shrinking Middle Class.”