No More 10 Minute Breaks: Why West Virginia Metros Are the Nation’s Most Troubled Labor Markets

Nine years into the economic expansion, metros across the nation are posting double-digit job growth. But West Virginia cities have yet to share in these gains.

The coal-based state is home to three of the 10 U.S. metro areas posting the steepest job losses since the recession ended in mid-2009, according to Labor Department data.

In Charleston, West Virginia’s capital, employment declined by 7.7% from June 2009 through July of this year. Parkersburg and Weirton, other West Virginia cities in the northern region of the state, saw the number of jobs drop over this period by 6.8% and 9.5%, respectively.

“The demise of coal [has] really battered the local economy,” said Matt Mowell, senior economist at Oxford Economics. “You really don’t have enough of a diverse industry base in the state to pick up any of the slack.”

The coal industry has been steadily losing jobs over the past several years as power plants turned to cleaner alternatives like natural gas. There were 29,000 mining jobs in West Virginia when the recession ended. Today there are less than 23,000.

West Virginia’s economy is so coal-dependent that coal’s demise translated into job losses in industries and metros across the state. The manufacturing industry is down nearly 4,000 jobs since June 2009, for example.

While jobs in West Virginia have grown 1.5% on a year-over-year basis, thanks in part to stabilizing commodity prices, the state stands in stark contrast to other energy-based economies.

Texas, riding a boom in oil and gas, has seen some of the fastest economic growth in the nation recently. Specifically, Midland, Texas, the heart of the Permian Basin, posted the strongest job growth of any U.S. metro area since the recession ended in mid-2009, Labor Department data show.

Further, notes economist Rob Martin of UBS, oil extraction leads to a lot of jobs outside of mining jobs because it is so manufacturing-intensive. By contrast, coal is less reliant on other industries.

Only slightly behind Midland in postrecession job growth are Elkhart, Ind., and Provo, Utah. Employment in these two metro areas has catapulted by upward of 45% since mid-2009, and has been a boon to economic growth.

Meanwhile, in Charleston, W.Va., annual economic output has actually contracted for the bulk of the expansion.

A silver lining underlies West Virginia’s prolonged woes: Most of the state’s pain could be over. Mining jobs have grown on an annual basis for most of 2017 and all of this year.

“I don’t expect to see the same pace of losses in the mining sector that we have over the last few years,” Mr. Mowell said. “That’s not exactly a glaring endorsement for this economy.”

Why U.S. Prime-Age Workforce Participation Is Lagging Behind Other Nations (June 6)

Firebrand Candidate Tests the Limits in West Virginia (May 8)

Coal Miners Are Losing Jobs In States With Coming Primaries (Mar. 25, 2016)

from Real Time Economics https://ift.tt/2NagRB2