Belle Ayr coal mine

The Belle Ayr coal mine was closed on Monday, July 1, 2019, as its owner, Blackjewel, filed for bankruptcy. More than 600 workers lost their jobs when Blackjewel closed both its Eagle Butte and Belle Ayr mines. Rhianna Gelhart/Gillette News Record

CHEYENNE – The state released its first quarter report on Tuesday, showing Wyoming is still in the midst of a modest economic recovery.

But the positive news came just a day after two coal mines unexpectedly closed in Campbell County.

Wyoming gained 4,400 jobs in the first quarter of 2019 and saw its unemployment rate drop in line with the national average of 3.9%. But a large portion of those job gains have been related to utility construction projects like oil and gas pipelines and wind energy project construction, said Wenlin Liu, Wyoming’s chief economist.

While that construction has helped increase employment and economic activity, Liu said a large portion of those gains will stick around only as long as those construction projects are ongoing.

“If you take away that pipeline construction, we are still in a rebound, but at a more moderate pace – not as fast as the U.S. average yet,” Liu said.

The news of continued improvement in the job market came just one day after the Eagle Butte and Belle Ayr mines closed Monday afternoon. With owner Blackjewel LLC filing for bankruptcy, more than 600 miners are out of work, and two major producers of coal in the state are left idle.

During a Tuesday news conference in Gillette, Gov. Mark Gordon and Department of Workforce Services Director Robin Cooley promised to provide support for out-of-work miners in unemployment insurance, training for new positions and other resources.

“I have asked Director Cooley at the Department of Workforce Services to mobilize resources to provide workforce assistance to workers who are impacted by this decision,” Gordon said in a prepared statement before the meeting. “We are not unprepared for this set of circumstances, and are eager to do all we can for the hardworking employees of these mines.”

Liu said those miners who lost their jobs are entering a job market where the number of potential employees has shrunk due to an aging workforce and out-migration of younger Wyomingites. That could mean those left unemployed might not have to leave the state to find work, especially with an increase in utility construction projects.

“The labor force is so tight, since the economy is quite strong and the neighboring states of Utah, Colorado and Idaho’s economies are so strong they are attracting so many of our young people,” Liu said. “On the other hand, for some of these workers, even if they find another job, as far as their pay rate, it won’t be expected to be as high as their original job coal mining.”

Since coal mining jobs can pay in the low six figures, even those miners who find employment immediately will be facing a potential pay cut from what they were making just a few days ago.

More first-quarter numbers

Also in the first quarter report, Wyoming saw an increase in state revenue over the start of 2018. For the first quarter of this year, the state saw a 14.1% increase in taxable sales over the first quarter of 2018, which helped drive up state revenues by 7.6%.

Housing prices were better than the start of 2018, but the 2.1% increase in value was still below the end of 2018 and below the national average of 5.1%.

While state revenues were up in the first quarter, Monday’s two major mine closures could push that number down in subsequent economic reports. Liu said for every 5% drop in coal production, the state sees a $28 million reduction in its overall revenues.

“This year, we were already seeing lower than last year’s coal and natural gas production for the first few months,” Liu said. “Fortunately, oil production increased by 15% from last year to somewhat offset those losses, but probably not enough to offset completely the natural gas and coal production decline.”

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