Will Promise Zone initiative lift Eastern Kentucky’s coal country out of poverty?

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• NARRATOR:

  In this south central mountain country, over a third of the population has faced chronic unemployment.

• MEGAN THOMPSON:

  For as long as anyone can remember, the coal country of Eastern Kentucky has struggled. In 1964, President Lyndon Johnson came through here after he declared the War on Poverty. This is the area became the face of his campaign.

• PRESIDENT JOHNSON:

  We are just not willing to accept the necessity of poverty.

• MEGAN THOMPSON:

  Back then, the poverty rate in some areas was around 60 percent.

  Eastern Kentucky has made big strides in the last 50 years since Lyndon Johnson came through here. But even still, the area continues to struggle today.

• MEGAN THOMPSON:

  The poverty rate in Eastern Kentucky has dropped, but in some parts still hovers around 30 percent. Unemployment in some counties is more than 10 percent, much higher than the national average. And the region is still dependent on coal, which has meant trouble as the industry's gone south.

• MEGAN THOMPSON:

  How big is the coal industry?

• TOBEY MILLER:

  Everything here stems off of coal.

• MEGAN THOMPSON:

  Like many here, Tobey Miller's roots run deep, and they run through the coal mines.

• TOBEY MILLER:

  Well, my Papaw, he worked in the mines. Used to tell me stories about when he moved here.

• MEGAN THOMPSON:

  Miller's papaw – his grandfather – bought the family farm in Knox County in 1941 with the money he earned from coal. Miller's dad worked in coal. And straight out of high school, Miller did too, welding the heavy machinery used in the mines. Miller's family – his wife, two daughters and granddaughter – lived well. He earned more than $50,000 a year. That's double the median household income around here. But then a year ago, Miller was told his job was being cut.

• TOBEY MILLER:

  I've got kids that have needs. That I couldn't provide for. I guess actually I got depressed. Real, real bad. And I- I just- I was just scared of losing everything.

• MEGAN THOMPSON:

  Miller says his family's farm has helped him get by. He grows most of his own food, and has already chopped firewood for winter.

• TOBEY MILLER:

  That'll be my heat.

• MEGAN THOMPSON:

  After his unemployment checks ran out, he did odd jobs for neighbors to stay afloat.

• TOBEY MILLER:

  You just can't go out here and find a job that suits you. I mean, it just ain't here.

• MEGAN THOMPSON:

  Since the 70's, more than 130,000 coal jobs have been lost in the U.S., a decline of about 50 percent. Coal employment in Eastern Kentucky's now at a historic low. More than 7,000 jobs have been lost since 2008.

• JAMES ZILIAK:

  The thing that hasn't happened at an adequate rate is the diversification of the local economy.

• MEGAN THOMPSON:

  University of Kentucky economist and poverty expert James Ziliak says a vicious cycle is at work. Like other persistently poor areas, Eastern Kentucky's high school and college graduation rates are lower than the rest of the country. So, few other industries – increasingly in need of highly-skilled workers – have located here.

• JAMES ZILIAK:

  I think the recognition has come at this point in time that coal, it's not gonna be the engine of- of job growth going forward.

• MEGAN THOMPSON:

  There are many reasons for coal's long decline – increased mechanization, a dwindling coal supply, the low cost of natural gas, stricter environmental regulations.

• ADVERTISEMENT:

  Coal means jobs in Kentucky. While the EPA and bureaucrats try to kill Kentucky's coal industry.

• MEGAN THOMPSON:

  The job losses are a hot topic in the senate race here. Republican incumbent Mitch McConnell has tried to capitalize on the latest round of environmental rules, proposed by the Obama Administration last summer. Even Democratic challenger Alison Lundergan Grimes has kept her distance from the administration.

• ALLISON LUNDERGAN GRIMES:

  I don't agree with what the president has done, his energy philosophy.

• MEGAN THOMPSON:

  While President Obama's blamed, right or wrong, for the coal layoffs in Kentucky, he's also getting some credit for a new plan to boost the economy, unveiled earlier this year.

• PRESIDENT OBAMA:

  We're here today to announce the first five Promise Zones.

• MEGAN THOMPSON:

  The Promise Zone initiative will fight poverty by concentrating aid in specific regions of the U.S. It's not a new idea. Republican congressman and housing secretary Jack Kemp pushed enterprise zones starting in the 80's. President Clinton promoted empowerment zones. They appeal to the left and right because they use tax breaks to spur job growth.

  Obama proposed tax cuts for the promise zones. But they have to be passed by Congress, a prospect considered unlikely for now. And there's no guaranteed federal aid – just a promise of priority for federal grants.

  The Promise Zone in Kentucky includes parts of eight counties in the southeast part of the state, where Tobey Miller lives. Jerry Rickett led the effort to apply for the Promise Zone designation.

• MEGAN THOMPSON:

  It's no secret that this part of the country has been struggling with a lot of these issues for many years. What is it about this Promise Zone that you think is gonna actually make a difference?

• JERRY RICKETT:

  Well, it gets back to the plan and it gets back to the partners all working together. You know, one individual group can only do so much. But if you weave us together into a rope, we can be really, really strong.

• JAMES ZILIAK:

  The people of the region have said, this is it. We gotta do something now, or else we might not be able to pull back.

• MEGAN THOMPSON:

  In fact, the Promise Zone has brought together a new coalition of local governments, schools and community organizations that will implement the Promise Zone goals: diversifying the economy, creating jobs, growing small business, and improving education and retraining. The work is just getting underway. But Rickett points to a couple successful local initiatives that show how the promise zone could work.

• JERRY RICKETT:

  We've got to get a better-educated workforce, got to help the adults that, you know, need additional training or retraining.

• MEGAN THOMPSON:

  Especially unemployed coal miners. Many are leaving in droves to find work. So in Hazard, Kentucky, two Promise Zone partners – the community college and a job-training group – launched a new program to teach laid-off miners to repair electricity and phone lines. So far 39 have graduated and almost every one has found a job. Tobey Miller is also retraining. At his nearby community college he's earning an Associate's Degree to repair heating, air conditioning and ventilation systems, or HVAC.

• TOBEY MILLER:

  If I can, I'm gonna stay right here and try to get through this school that I'm doing. Because it's here. HVAC work is here.

• MEGAN THOMPSON:

  Miller says he wants to start his own business one day. Promise Zone supporters say that's exactly what they want, too.

• JERRY RICKETT:

  We really believe in entrepreneurship, trying to get businesses to start, trying to find ways to help the ones that are here, you know, thrive. It's really difficult to recruit industries into Eastern Kentucky.

• MEGAN THOMPSON:

  Because it's so difficult to recruit outside employers, Rickett says they need to grow their own. Last year, Rickett's group got an $800,000 federal grant, which they then loaned to local manufacturer Clyde Phillips. He hired 19 people with that money, and plans to hire dozens more.

• MEGAN THOMPSON:

  When we're talking about thousands of people losing their jobs and thousands of people already un- unemployed, will one or two jobs here or a dozen jobs there make that difference?

• JERRY RICKETT:

  Well, it's the only op- opportunity we have. You have to be realistic and work within the areas that you can and have progress and success in.

• JAMES ZILIAK:

  I do get the sense that there's greater energy and enthusiasm to- to- to tackle the problem. Time will tell if it will pay off. Clearly, we're hoping that it does.

• TOBEY MILLER:

  I've never been dependent on programs before.

• MEGAN THOMPSON:

  Like many here, Tobey Miller blames the government for the coal layoffs, but admits he's been helped by federal programs, too. A local promise zone partner signed him up for federally-supported programs that have helped pay his mortgage and provide a stipend for a few months.

• TOBEY MILLER:

  It has been a very big bonus for me. I mean, it saved my bacon. But the problem I have with it is – if they'd left things alone, everything would've still been going along just fine.

• MEGAN THOMPSON:

  Miller says his dream is to save enough money to send his youngest daughter to a four-year college. She'd be the first in the family to go.