West Virginia’s unemployment rate is at historically low levels. The seasonally adjusted jobless rate for March was 3.7 percent, marking the sixth consecutive month of record-setting low unemployment.
That is positive economic news, but it is not the whole story. The other more significant figure is West Virginia’s workforce participation rate, and it is abysmal. Data from the WVU Bureau of Business and Economic Research show that the total number of West Virginians who are either employed or looking for work represents just 55 percent of total workforce population.
(Workforce population is defined as civilian non-institutional population age 16 or older.)
That 55 percent rate is consistently among the lowest, and often the lowest, in the country. (Mississippi’s is typically a close second.) The national average is 62 percent.
Dr. John Deskins, director of WVU’s Bureau of Business and Economic Research, says the scarcity of workers is a consistent drag on the state’s economy.
“In West Virginia, our problem is not that a large number of people are looking for work and can’t find it. Rather, our problem is that so many West Virginians aren’t looking for work in the first place,” Deskins said.
There are several reasons why:
–West Virginia’s population is older. Our median age is 43, which is third highest in the country, after Maine and New Hampshire. Older individuals are more likely to have dropped out of the workforce if their skills do not match the needs in the economy.
–Our health holds us back. The United Health Foundation rankings for 2021 listed West Virginia as the least-healthy state. Approximately one in five West Virginians has multiple chronic conditions. It is difficult, if not impossible, to work when you are sick.
–The state has a drug epidemic. Addiction prevents individuals from being consistent, productive employees. The often-told anecdote is that when an employer announces at a job fair that they will be drug tested, many of the potential applicants walk out.
Brian Leggo, economic forecaster for the WVU Bureau of Business and Economic Research, says these factors magnify the worker participation rate among older workers. “The deficit between West Virginia’s rate and the national average increases to 12 percentage points (54% for WV vs. 66% for U.S.) among residents between the ages of 55 and 64.”
West Virginia fares no better among younger workers. West Virginia’s labor force participation rate among people 25-54 is 75 percent, compared with the national average of 83 percent.
The state’s economy has improved in recent years. The business climate is better and an increasing number of companies looking for a place to expand are finding West Virginia has its advantages.
These developments have contributed to an economy where the demand for workers outstrips the supply. That has driven down the unemployment rate to record low levels, but also exposed the underlying weakness of labor force participation.