Economic Studies
"Surprisingly little evidence" for economic good times
The most comprehensive study ever conducted on the economic impacts of mining on rural economies — which examined literally all of quantitative findings available (301 in total) — concluded that mining led to positive outcomes in just 29% of cases, and most of those came from before 1982.
The study concludes: "There is surprisingly little evidence that mining will bring about economic good times, while there is a good deal of evidence for expecting just the opposite."
Instability in the Work Force
One of the factors contributing to mining's negative impact on economies is the inherent instability of many operations, which must lay off workers or even board up shop when the price of the metal falls, an effect called flickering.
To take the historic White Pine Mine as an example, the 2013 Thomas Power Report states:
"Over a 20‐year period the White Pine Mine complex expanded its production, processing, and employment. Employment reached a peak of about 3,000 in 1974 and then plunged by almost 2,000 jobs over the following five years. By 1984 most of the White Pine copper complex had been shut down and only 270 employees worked there. A brief recovery brought employment up to 1,100 between 1989 and 1995 but then employment plunged to only about 100."
Flickering at Copperwood?
In 2011 the Copperwood Project cited a value of $2.50 per pound of copper required to keep the mine operational, but inflation now brings that value closer to $4.00
So what happens when the price of copper drops below that value, as has occurred numerous times throughout history? What happens when rising inflation increases the cost of the subcontractors? What happens when a large new copper deposit is discovered in another area, increasing supply and reducing the value?
As the copper price flickers, so too does employment. Laid-off workers hang around hoping for the mine to reopen, very often living off of government welfare, until they decide it isn't worth their while and move elsewhere.
Diminishing Returns
Due to mechanization and automation, mining's economic contributions are more underwhelming than ever. This 2020 study shows that, after brief a honeymoon period of initial job growth, a sustained decline follows, with impacts especially pronounced in the outdoor recreation and amenity sectors.
According to Harvard economist James Stock, a former presidential advisor: "In 89% of cases copper mining ends up being a negative for jobs and a negative for incomes."
As mining falls, the U.P. rises...
From the 2013 Thomas Power Report:
"Western U.P. jobs declined by 4,000, or 55%, between 1969 and 2010 in the fields of mining, forest products, manufacturing, and agriculture, mostly associated with the closure of the White Pine Mine.
Despite this major loss of export jobs, the rest of the regional economy did not follow downward. Instead, jobs in other sectors of the economy actually expanded significantly, adding 12,100 jobs, a 70% gain."
...and is rising faster than the rest of Michigan
"Between 1969 and 2010 the increase in real per capita income in the Western U.P. was 73%, nearly on par with the national average of 75%, and far higher than the growth of Michigan as a whole, which was only 41%.
Despite the massive losses in mining jobs, by most measures the regional economy displayed considerable economic vitality."
So that's the secret the mining industry doesn't want you to know: we don't need them.
Tourism is the economic backbone of the Upper Peninsula
- Tourism brings in around $1.6 billion to the Upper Peninsula's economy annually.
- Meanwhile, mining contributes around $1.4 billion — and that's in all of Michigan, including non-metallic mining.
But these industries should not be compared on equal footing: One sector requires the long-term protection of the environment, whereas the other profits from its destruction; one sector contributes sustainably to the economy, whereas the other is a pattern of short booms followed by longer, deeper busts — can you guess which is which?
Is mining the cornerstone of our economy?
In fact, this report by Michigan Works! shows that all natural resource extraction jobs comprise just 3% of total jobs in the Upper Peninsula.
And even these numbers may be an overstatement. Whereas the Michigan Works! report cites natural resources as 1% of the Michigan total, a report by the Michigan Center for Data and Analytics puts it at just 0.2%.
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