The population declined dramatically in the 1960s and 1970's as mining techniques shifted to less labor intensive methods. In the 2000 census, the city population was 900. The 2007 population estimate had Lynch's population at 828.
Lynch is the nearest city to Kentucky's highest point, Black Mountain, elevation 4145. Sitting at an elevation of 1600 feet above sea level, Lynch is Kentucky's highest incorporated city.
There were 408 households out of which 24.0% had children under the age of 18 living with them, 40.7% were married couples living together, 16.2% had a female householder with no husband present, and 38.5% were non-families. 36.8% of all households were made up of individuals and 20.1% had someone living alone who was 65 years of age or older. The average household size was 2.21 and the average family size was 2.88.
The age distribution was 22.6% under the age of 18, 8.9% from 18 to 24, 20.4% from 25 to 44, 28.2% from 45 to 64, and 19.9% who were 65 years of age or older. The median age was 43 years. For every 100 females there were 82.6 males. For every 100 females age 18 and over, there were 80.1 males.
The median income for a household in the city was $17,609, and the median income for a family was $21,625. Males had a median income of $31,500 versus $19,038 for females. The per capita income for the city was $13,369. About 36.7% of families and 37.8% of the population were below the poverty line, including 57.6% of those under age 18 and 25.9% of those age 65 or over.