Low Productivity in American Coal Mining

In order to reduce the Nations's reliance on imported oil, national energy policy calls for greater use of coal. The Nation's ability to make this transition to coal depends on the coal industry's ability to meet future coal production needs. Given the importance which labor productivity plays in the quantity of coal produced, productivity is crucial to meeting national energy goals. Between 1947 and 1969, the coal industry experienced a threefold increase in productivity. However, since 1969, overall coal industry productivity has declined 26 percent with a 43-percent decline in underground mine production. GAO evaluated the major factors determining productivity in the coal industry and identified those mainly responsible for the decline in labor productivity. The review is based on an analysis of a large coal mine database, interviews with mining personnel at 44 mines, and discussions with Government and private officials.

The decline in underground productivity during the 1970's was closely tied to the reduced quality of labor-management relations, especially after 1973. Mine Safety and Health Administration (MSHA) regulation was a primary cause of declining underground productivity between 1970 and 1973, but was less important afterwards. MSHA regulation reduces mine production primarily by requiring that increased labor be spent on nonproduction activities and by reducing available production time. The enactment of strict State reclamation laws is largely responsible for the decline in productivity in surface mining. Although coal mining technology has not caused productivity to decline, mechanization and technological innovation slowed in both underground and surface mines in the late 1960's and has not advanced sufficiently to offset the loss due to other causes. GAO found that geological conditions in underground mines, often cited as a possible cause for declining productivity, have not worsened or led to lower productivity. Since 1969, underground mines have experienced worsening labor-management relations as reflected in the increase in the number of strikes. Legislation, which authorized more stringent health and safety standards, vastly increased Federal enforcement powers and resources. Increased enforcement activity resulted in lower productivity during the peak of inspections in 1973. While MSHA regulation reduced fatalities in coal mines dramatically, nonfatal injuries have stayed high.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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