Listen to “Jobs Can Fix a Lot, Including Bad Stats” on Spreaker.
The West Virginia Chamber of Commerce released its annual Campaign for Jobs Digest to the broader public Wednesday.
The numbers are not good.
West Virginia’s 10-year job-growth rate ranks 50th in America. Personal income ranks 49th. The state’s overall tax burden is among the highest in the country, as is its business-tax burden. West Virginia’s corporate net income tax rate also remains well above the bottom tier nationally.
Low rankings in research-and-development spending and educational outcomes remain part of the status quo.
Own a home — or thinking about buying one — in West Virginia? Long-term home-price appreciation also badly trails most of the country. That matters. For millions of Americans, their home is the largest asset they will ever own and one of their primary vehicles for building wealth.
Then there is labor-force participation.
West Virginia remains at or near the bottom nationally. There has been a small but concentrated effort to explain away that statistic because of the state’s older population, disability rates and other demographic factors. Those factors deserve consideration. But they do not make the statistic meaningless.
Labor-force participation measures something critically important: how much of the working-age population is actually engaged in the labor market. Every state faces demographic and workforce challenges of one kind or another. West Virginia’s persistent position near the bottom remains an economic problem that must be tackled, not explained away with unmerited excuses like you’d expect to hear from the kid in right field who doesn’t want the ball hit to him.
Taken together, it’s not the prettiest of pictures.
So what’s the fix?
Jobs, jobs and more jobs.
Companies create those jobs. And given many of the disadvantages reflected in these rankings, West Virginia has to offer compelling advantages if it expects businesses to invest here rather than somewhere else.
That is where our natural resources matter — and one reason energy-intensive industries such as data centers are interested in West Virginia.
Reduce some of the hurdles, combine that with our abundant natural resources and energy potential, and more companies may consider giving West Virginia a try.
Business taxation is an obvious place to examine.
The purpose of a business is not to generate revenue for government. It’s to provide a product or service that meets a need. Do that successfully with efficiency and prosperity can flow to investors, workers and communities — and, ultimately, to government through a larger tax base.
Taxes also matter in investment decisions. They are a cost of doing business, just like labor, energy, land, transportation and capital. Consumers ultimately bear those expenses.
And companies compare those costs across states.
If an investment cannot produce an acceptable after-tax return in West Virginia, capital does not simply disappear. It can go to Ohio, Pennsylvania, Virginia, North Carolina or somewhere else entirely.
This fundamental point needn’t be complicated… many of those who would seek to complicate it have never invested capital – a company’s money or their own.
When the Legislature returns to Charleston after the midterm election, lawmakers and the governor will have another opportunity to examine the state’s tax structure. The Chamber’s latest Digest provides data they can and should consider as part of that debate.
The economic theory is straightforward: make West Virginia more competitive for investment, attract more employers and expand existing ones. More investment can mean more and better-paying jobs. Higher incomes can mean more consumer spending, more economic activity and, ultimately, additional tax revenue generated by a larger economy.
Jobs can fix a lot.
But there is another side of the equation: attracting people who already have jobs.
Ascend WV has demonstrated considerable demand for that proposition. The program reports more than 92,000 applications since its creation, and has attracted more than 1,500 new West Virginians while retaining more than 96 percent of participants, 41 percent of which have purchased or built a new home. Participants receive a $12,000 relocation incentive, among other benefits.
The Legislature should examine substantially expanding the state’s investment in Ascend; how that could accelerate success — bringing more working, taxpaying residents to West Virginia sooner rather than later.
The program was originally built on Brad and Alys Smith’s $25 million private investment, and the state has increasingly partnered with it. Just this month, the Morrisey administration announced a $2.4 million award to Ascend WV specifically aimed at recruiting and retaining healthcare professionals in rural West Virginia.
Economic growth ultimately requires two things West Virginia has struggled to produce consistently enough: more jobs and more people.
We should be aggressively pursuing both any way we can.
Onward and upward.