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Six months after Black Thursday, Gillette bent but not broken

On April 28th, Mark Frausto went to work at Alpha Coal’s Belle Ayr mine, only to learn it was his last day. Along with 37 others at Alpha’s two mines, Frausto was let go. He’d worked 14 years with Peabody Coal, but only one with Alpha. There would be no severance package, no month’s pay, no buffer at all but filing for unemployment.

Frausto’s layoff came just one month after Black Thursday, March 31st, when Peabody and Arch Coal cut 465 miners between them.

“We didn’t know what the future was,” Frausto says.

Five months later, he’s still on unemployment despite a continual job search. Gillette is the coal capital of the nation’s most productive coal-mining state, and while it has not boarded up its doors or “rolled up its streets,” as Mayor Louise Carter-King puts it, the town remains in the grip of an economic downturn. Some indicators point to recent stabilization, but prolonged unemployment and increased stress on social services tells the tale of tough times.

While Frausto hopes recent hiring at the mines might get him back on as a mechanic with Peabody, he has applied for work wherever he could. Despite continually widening the range of jobs he applies for, he’s had no luck, not even at big-box stores like Home Depot and Menards.

“Places like that don’t want to hire mechanics,” he says.  

For the month of August, Campbell County had a 6.8 percent unemployment rate, still nearly double what it had been the year before, but finally down after five months of hovering around 8 percent.

“We’ve not been at 8 percent in years and years and years,” says Vermona Petersen, the manager of the Gillette office of Workforce Services.

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Many people in Gillette know someone like Frausto—who lost their job and is still hunting a new one. Take the Cowboy Bowling League, which gathers each Tuesday for their weekly matches. The league is down two teams, or ten guys, from the year before. League manager Scott Green, who himself has been looking for work since March, says at least three of the guys left town.

On Green’s bowling team is Jeff White, a city electrician who’s nervous after the city laid off ten employees. White’s 31-year-old son was among the 235 workers laid off by Peabody, and has been collecting unemployment since.

There’s also Terry Michael, a local radio DJ, who says his wife quit her job as branch manager for Professional Transportation, Inc., a company that specializes in moving railroad crews, after she was told she would receive a $10,000 cut to her salary and lose her benefits. Unemployment payments were a better deal.

But she’s applied for over a hundred jobs since and had only a few interviews. One was for assistant manager of local hotel Arbuckle’s Lodge, and lasted less than five minutes, Michaels says.

Asked about the job, Arbuckle’s manager Laura Spooner says she put up a help-wanted ad on September 7. Within a week she had 262 applicants. An ad for a front-desk receptionist netted 455. “It’s almost overwhelming,” she says. Most of the applicants have no hospitality experience but are instead truck drivers or coal miners, Spooner adds, “that kind of work.”

Gathering around a table between their turns at the lanes, this bowling team’s members have little doubt about what will decide Gillette’s future.

“It all depends on November,” Michaels says. He supports presidential candidate Donald Trump, who has promised to abandon the U.S.’s global commitments to limit carbon emissions and roll back a moratorium on federal coal leasing.

Michaels’ daughter Jenikah, a high-school senior, agrees with her father. If Hillary Clinton is elected, she says, “this town will go off the map.”

A bowling team at the Tuesday night Cowboy Bowling League in Gillette. Behind them are empty chairs and tables. The shrinking league is down ten guys from the year before.

A bowling team at the Tuesday night Cowboy Bowling League in Gillette. Behind them are empty chairs and tables. The shrinking league is down ten guys from the year before.

According to voting data for Campbell County, there are 14,678 registered voters ahead of the 2016 presidential election.  Only 1010 of them are Democrats. 

Darryl Anderson, a well informed voter who prefers to be an independent but registered Republican to vote in some primaries, says that he’s watched a political hardening occur in the energy workers who frequent his auto repair shop.

The sense of being victimized by a “war” on coal has gotten much stronger, and the EPA, never very popular here, has become a dirty word.

“Probably more so now than it was three years ago,” Anderson says.

Stay or Go

Dire predictions about the results of the election, and the job-hunt difficulties his wife is facing aside, Terry Michaels says his family owns their home and isn’t leaving town.

Frausto, on the other hand, rents. He drove roughly 300 miles to Fort Collins, Colorado, just to interview for a job fueling the city busses, and is willing to move anywhere with work. Most recently, he’s applied for a job as a border patrol officer.

How many people have left Gillette and Campbell County in the face of reduced economic opportunities is difficult to pin down, but some indicators, like school enrollment, show the exodus was not as large as many feared. Enrollment in the The Campbell County School District, which includes Gillette and the outlying coal towns of Wright and Rozet, is down 5 percent.

The decrease is certainly tied to the energy downturn, school officials say, but when spread over the individual schools the impact is not severe. Gillette’s high school, for example, is down 50 kids out of 1,623.

“Nothing earth shattering,” Principal Troy Zickefoose says.

In real estate, another possible indicator, the number of houses on the market has increased steadily over the last six months. In March, there were 417 houses up for sale, close to double what there was a year ago. By August, that number was up to 553.

Local real estate agent Lexi Ostlund says that after a significant number of homes entered the market from March until June, that number leveled off during the summer, and so far in September sales have been up. “You never know where the bottom of the market is until about six months after,” she says. However, she feels it’s possible that Gillette has seen the bottom and is starting to turn around.

Rental properties, on the other hand, still report a slow market, which indicates movement out of the city by more mobile energy or service workers who lost their jobs. Apartment complexes that used to have waitlists now find themselves with vacancies and offer reduced rents.

“People are moving out faster than they’re moving in,” said Jordan Newell, a leasing agent with Highland Properties, which manages three Gillette apartment buildings with affordable housing. Out of their 200 apartments, 37 are vacant.

Unemployment figures also indicate at least some worker exodus. The percentage of unemployed workers is down, but so is the labor force, by 800 people from the year before. That change is consistent with workers either moving away or giving up the job search, says David Bullard, economist with the Wyoming Department of Workforce Services.

Crunching Budgets 

Faced with steep decreases in the sales tax revenue that makes up its general fund, the city of Gillette reduced retirement benefits for its employees, laid off 10 people, and declined to fill 22 recently vacated positions. It also hired less than half of the seasonal employees normally taken on for the summer.

Still, administrator Carter Napier says the changes residents see are relatively minor: parks and right-of-ways aren’t being watered or mowed as often as they used to be, and instead of large dumpsters for every couple houses, the city has scaled back to the traditional household trash can, a lower expense.

City hall’s goal is to match cuts with needs. For example, with new construction down, the administration is cutting staff from the permitting office. Given a three-year trend of dropping crime, the police department was another target for staff reductions, losing five sworn officers as well as three full and one part-time staff positions.

Napier believes these cuts have saved the city $2.5 million on its budget. “I think we’re setting a new bar here for rearranging government and setting services,” he says.

Asked if perhaps maintaining a high level of services for residents could mean reimagining Gillette as a smaller city going forward, Carter-King conceded it’s a possibility. “We could see a new norm,” she says. “It’s just hard to say if we will ever see as good an industry as we had.”

That’s a tough idea for Gillette to accept. Carter-King noted that over the summer trucks of food donations have arrived from elsewhere in the state. “Normally we are the ones filling the trucks,” she says.

In July and August, sales tax revenue stopped its year-long slide, at least temporarily, after an uptick in coal mining activity and a big boost to local business brought in by the national finals for high school rodeo, which was held at Gillette’s massive Cam-Plex event facility. Even with the uptick, revenue remained 9 percent below what the city had projected when putting together its budget.

A coal train rolls out of Gillette. A recent uptick activity at the mines has led to some optimism that Gillette's economy, heavily based on coal, might at the very least be stabilizing. (Andrew Graham)

A coal train leaves Gillette. Recent uptick in activity at the mines has led to optimism that Gillette’s economy, heavily based on coal, might be stabilizing. (Andrew Graham)

For those who lost jobs, unemployment only goes so far, and Gillette’s safety net is also feeling the crunch, just when it’s needed most.

The United Way of Campbell County, which raises money for local charities through voluntary deductions from people’s paychecks and gifts from local businesses and corporations, reports funding is down by half. The reduction would have been more, but the organization was able to offset it with some of its financial reserves, according to recently departed Executive Director Roxann Backer.

Economic uncertainty meant fewer people willing to donate money, and bankruptcies in the coal sector meant less corporate giving as well. Added to the loss of private giving was a reduction of funds the city allotted to social services out of its sales tax revenue.

Meanwhile the groups United Way supports report significant increases in people showing up for their services.

Jenny Nell, director of the Gillette office for the Salvation Army, says that since October the organization has dispersed three times more financial assistance than in the past. Like other charities, the Salvation Army is trying to meet the increased need with half their usual resources.

Much of the money was given to help people pay their rent, their mortgage or their utilities. “These are folks who never really needed help before,” Nell says.

Mark Frausto, the laid-off mechanic, is 47 years old and a 24-year veteran of the military. He served three tours in both Iraq wars, and receives disability payments for PTSD. He’s seen and done a lot, but is neither ready nor able to quit working. Like Gillette itself, Frausto is unused to inaction.

“I’ve never had this happen to me at all,” he says.

Five months out from Frausto’s layoff, he is eligible for only one more month of unemployment, and will then be unable to reapply without first working again.

While disability payments will keep him afloat without charity, Frausto says his wife, who suffers from back problems, and his kids, living with his first wife in Douglas, need the health benefits a job provides.

Frausto was initially angry following his layoff, but now that’s been replaced by frustration and boredom. “I ride my motorcycle, I go lift,” he says of his days. He gets online and applies for jobs anywhere and everywhere, logging his applications to prove to the unemployment office that he’s still looking for work.

Mark Frausto, laid off from a coal mine in April, sits on the weight bench in his garage, his motorcycle behind him. Bored by unemployment, he says that weight lifting and riding the bike have been much of what he's done over the last 5 months. (Andrew Graham)

Mark Frausto, laid off from a coal mine in April, sits on the weight bench in his garage, his motorcycle behind him. Bored by unemployment, he says weight lifting and riding his bike are two ways he copes. (Andrew Graham)

 

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Andrew Graham is reporting for WyoFile from Laramie. He covers state government, energy and the economy. Reach him at 443-848-8756 or at [email protected], follow him @AndrewGraham88

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3 Responses to Six months after Black Thursday, Gillette bent but not broken

  1. George Broadbin October 4, 2016 at 1:30 pm #

    Excellent journalism! Keep up the good work!

    New York, New York

  2. Bryon Lee October 4, 2016 at 9:30 am #

    My question for those in the Powder River Basin, is what do they expect from Trump and Liz Cheney? How are they going to change global market trends regarding coal? Also, why all the disdain for an agency that protects our environment,….which includes the water we drink, the air we breath, and the landscape we love?

    Laramie, Wyoming

    • Aricka Turner October 8, 2016 at 8:37 am #

      Coal lives matter.

      Coal is not going away. Other countries still use coal for power and to get 3rd world countries’ energy efficiency going coal is the best way to start that. Even green technology needs to have backup because it is not efficient. And you have obviously never seen a reclaimed mine site, they are a better landscape than what it was before the mine.

      Gillette , Wyoming

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