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State of Working West Virginia: Growth Weak, Moving North

PHOTO: Ted Boettner, who heads the West Virginia Center on Budget and Policy, says economic growth remains weak in West Virginia, and energy extraction is moving to the northern part of the state. Photo courtesy West Virginia Center on Budget and Policy.
PHOTO: Ted Boettner, who heads the West Virginia Center on Budget and Policy, says economic growth remains weak in West Virginia, and energy extraction is moving to the northern part of the state. Photo courtesy West Virginia Center on Budget and Policy.
October 1, 2014

CHARLESTON, W.Va. - West Virginia's economy is still weak, and much of the energy-extraction growth has shifted north, according to the annual State of Working West Virginia report.

The southern coalfields continue to experience declining production, said Ted Boetner, executive director of the West Virginia Center on Budget and Policy, who helped write the report. Much of the growth in natural gas and expanded health-care coverage is taking place farther north in the state, he said, and isn't replacing what's being lost.

"While West Virginia's economic recovery has been assisted by strong growth in the natural gas industry and the expansion of health coverage from Medicaid," he said, "wages remain stagnant; unemployment remains elevated."

Boettner said it would benefit the state to work on ways to help bring about what he called "a soft landing" for southern West Virginia. He noted that there are proven ways to do that - such as when the federal government assisted areas with declining manufacturing because of imports or less tobacco farming because of less smoking.

"There's a large precedent to use federal transition assistance when there have been mass layoffs in an industry," he said. "We can also look at reallocating abandoned mine land funds."

According to the report, the state is being hurt by a pattern showing up in other parts of the nation. Boettner said job growth has been weak and concentrated in low-wage positions. The trend makes inequality worse, he said, and the whole economy is more fragile because consumer demand remains tepid.

"While workers are more productive, their wages have remained stagnant, have not grown along with GDP and productivity," he said. "This has contributed to income inequality, a larger share of people in poverty."

The coal industry charges that production declines are the result of environmental policies - what it calls a federal "war on coal." But Boettner pointed out that the easy-to-get coal has been mined out, which raises production costs and makes coal less competitive than cheap natural gas.

The report is online at wvpolicy.org.

Dan Heyman, Public News Service - WV