It is a common belief that mining and other extractive industries will bring significant economic benefits and prosperity to communities.
For example, B.C. Premier Clark stated the following about the Ajax mine during her visit to Kamloops last week (The Daily News, Oct. 25):
“We know that it could mean that there are many, many more families that could put the food on their tables with really high paying jobs for a long, long time. It could lift many people out of poverty forever.”
Rather than taking this common belief as true, I decided to research the scientific literature and came across an interesting U.S. study entitled Mining the Data: Analyzing the Economic Implications of Mining for Nonmetropolitan Regions, published in the peer reviewed journal Social Inquiry in 2000 by Freudenburg and Wilson.
The study examined the results of 301 published articles and/or technical papers.
The authors selected papers that compared nonmetropolitan mining regions in the U.S., excluding those that are predominately rural, relative to other nonmetropolitan regions and/or against the same mining regions but across time.
Contrary to the popular belief, the authors discovered that half of the studies found negative economic outcomes in mining communities, with the rest split equally between favourable and neutral effects.
Income was favourable in 48 per cent of the papers but many other studies found unfavourable effects (34 per cent) and the remaining 18 per cent found a neutral
When it came to poverty, 44 per cent of the studies found an adverse effect on poverty in mining non-metropolitan regions, followed by 36 per cent that found a neutral effect and only 20 per cent of the studies found a positive effect on poverty.
Almost 60 per cent of the studies found unemployment increasing in the mining regions, with 25 per cent being neutral and only 20 studies found unemployment declining.
They also reported that over half the positive findings came from the period prior to 1982 which is considered a boom period for this sector. The majority of the findings after 1982, considered the bust period, found significant adverse effects.
They concluded by stating: “Until and unless future studies produce dramatically different findings, there appears to be no scientific basis for accepting the widespread, ‘obvious’ assumption that mining will lead to economic improvement.”