Despite some improvements in recent years, West Virginia remains 50th in the nation in overall business climate rankings, and faces obstacles not of its own making, a national economic development consultant told legislators Sunday.
One factor, according to Ted Abernathy, managing partner for Economic Leadership, LLC, is that since 2010, job growth and population growth has been concentrated in metropolitan areas of 1 million or more population.
“One of the things impacting West Virginia in a big way is that nationally, there’s been an urban advantage,” he told members of the Joint Commission on Economic Development.
Abernathy noted that West Virginia has experienced a 27 percent decline in workers between the ages of 25 and 44, with only a handful of north-central and Eastern Panhandle counties avoiding population loss in that demographic.
However, he said West Virginia in not unique, citing similar losses in rural counties in southwestern Virginia, while noting that in Indiana, the only counties to avoid losses in that age demographic are concentrated around Indianapolis.
“It’s just where the growth is. It’s pushed to these large urban areas,” he said.
A key factor, he said, is that quality of life has moved up to the 4th highest factor considered when manufacturers are scouting locations, behind highway accessibility, labor costs and availability of skilled labor.
Abernathy said West Virginia has seen some positives lately, including a competitive corporate net tax rate, and improvements in high school graduation rates, gross domestic product growth and increased exports.
He also lauded growth in two categories of manufacturing: pharmaceuticals and motor vehicle production.
However, he said, “A couple of things scare me.”
He said that includes a decline in manufacturing employment, to 59 percent of 1998 employment levels, as well as dropping manufacturing output, down to 84 percent of 1998 levels.
Also troubling is that West Virginia’s workforce participation rate remains lowest in the nation, Abernathy said, adding, “Moving your participation rate up needs to be a priority.”
He said West Virginia needs a five-year strategic plan to help anticipate changes in manufacturing, including the expansion of automation and robotics.
To illustrate rapid advances in technology, Abernathy pointed out that smartphones, which are ubiquitous today, were essentially unheard of 12 years ago.
Also Sunday, Sen. Ron Stollings, D-Boone, asked if there has been any progress in filling vacancies in top positions in the state Department of Commerce, including Commerce Secretary.
Gov. Jim Justice fired then-Commerce Secretary Woody Thrasher in mid-June, and was recently quoted as saying he has not been able to find a qualified replacement willing to take the job.
“I’ve heard a lot of things are on hold,” Stollings said. “I’m from a region that’s lost 40 percent of its economy, and it’s not the time to dilly-dally.”
Delegate Martin Atkinson, R-Roane, committee co-chairman, said he was not aware of any progress in filling those positions.