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West Virginia’s labor participation remains last

CHARLESTON, W.Va. — This Labor Day, West Virginia’s labor force participation rate continues to be last in the country.

The labor force participation rate is an economic indicator calculated by the U.S. Bureau of Labor Statistics where the sum of employed workers plus the unemployed looking for jobs is divided by the working age population.

People not included in the participation rate include those who do not want to work or can’t work.

It’s a number that has bedeviled West Virginia. A few months ago, Politifact asked, “Does West Virginia have the nation’s lowest workforce participation rate?” Fact check: true.

The nation’s civilian labor force participation rate in July was 63 percent.

West Virginia’s rate was 54.8 percent.

Brian Lego

“We’re quite a few percentage points off of the next lowest state,” said Brian Lego, economic forecaster with West Virginia University’s Bureau of Business and Economic Research.

“We are about three percentage points off of Mississippi. The margin between us and No. 49, to close that, even that is not easy to do.”

Mississippi, a spot above, is at 55.6 percent. Arkansas is at 58, Alabama at 58.2, South Carolina at 58.5 and Louisiana and New Mexico at 58.6. Those are all seasonally-adjusted numbers.

“The whole workforce participation is kind of the fundamental driver that we’re faced with. Looking at the participation rate is interesting. And it’s scary once you look at it,” Lego said.

“It’s really going to be a major obstacle if we’re to have any kind of stronger than expected growth.”

Lego is particularly alarmed by a subset of the numbers: prime-age labor force participation.

“We have a large number of people in those prime workforce years that just aren’t involved in the workforce,” Lego said.  “That’s one of the reasons we have a lot of the outcomes we do.”

For those aged 25 to 34 years old, West Virginia still ranks next to last in the country — just ahead of North Dakota — with a 76 percent rate. The national average is 83 percent.

For those aged 35 to 44 years, West Virginia is last at 76 percent. The national average is 83 percent.

And for 45 to 54 year olds, West Virginia is again last at 73 percent. The national average is 81 percent.

Major drivers of those numbers are related to health, including drug addiction problems, Lego suggested.

“Those key participation years between 25 and 54, it’s a really sobering look at the impacts of the drug crisis here in West Virginia,” he said.

He added, “It just doesn’t look all that good for West Virginia. It’s not only older but it’s also less healthy so you’ll have less participation.”

Jill Upson

Jill Upson, the executive director of the state’s minority affairs office, was asked a question about the labor force participation rate during a panel discussion at last week’s Business Summit.

Upson, a Republican and former state legislator, responded by advocating continued efforts toward criminal justice reform, particularly building on “second chance” laws.

She emphasized efforts to give nonviolent offenders opportunities in the workforce.

“In the private sector, that will go a long way toward mitigating that particular issue as we continue to grow as a state — especially in manufacturing — if we would open the doors to people,” Upson said.

“Do they have these blemishes on their record? Have they gone through recovery?”

Brian Dayton

Brian Dayton, research director for the West Virginia Chamber of Commerce, which lobbies for business, took note of some overall improvement.

West Virginia’s seasonally-adjusted labor force participation rate is up from 54.6 percent in June and 53.7 at this point a year ago.

That’s not to say West Virginia is in great shape, Dayton said, but it’s a little better.

“We’re seeing a turnaround. We hit rock bottom in 2015. We’re making a gradual turnaround. We’re still lowest in the nation by a good amount,” he said.

“But we’re at least turning it around. We were on a downward slide and that’s been arrested and we’re coming back up.”

West Virginia’s average workforce participation rate in 2018 was 53.9 percent.

That’s a little better than the prior years.

In 2017 it was 53.3 percent, in 2016 it was 53.1 percent, in 2015 it was 52.8 percent, and in 2014 it was 53.1 percent.

A boom in construction and recovery in natural gas and coal has helped, Lego acknowledged.

“You have a number of people who have popped back in for this little bit of growth we’ve seen for the past couple of years,” he said.

The labor force participation issue builds on itself, Lego said, as companies assess the workforce in West Virginia.

“That’s one of those overarching issues when a company is considering to locate in a place or people are looking to expand in jobs,” he said.

“It’s kind of a multifaceted issue you’re dealt when you don’t have enough people participating in the workforce.”

Participation Rate Data (Text)

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