WVU presents state economic outlook
CHARLESTON — A economist told lawmakers Wednesday that the state needs to focus on getting residents back into the workforce, marketing itself to manufacturers, and promoting the state as an outdoor recreation location for remote workers.
“If we do more to ultimately continue to boost tourism in West Virginia, get people to start thinking of us as a tourism-oriented state at least in some sense, if we can do things to bring more remote workers to come here and spend more money in the state to build momentum in some of our communities, I think we might be able to ultimately move away from that negative stereotype that we want to avoid,” said John Deskins, director of the Bureau of Business and Economic Research.
Deskins presented a report Wednesday morning from West Virginia University’s Bureau of Business and Economic Research during a joint meeting of the finance committees of the House of Delegates and Senate.
The annual West Virginia Economic Outlook report is normally presented to lawmakers the first day of the yearly legislative session, but this year’s presentation was delayed one week.
Deskins said this year’s report doesn’t factor in the recent economic development announcements made last week. The three projects represent thousands of new jobs and billions in investments in the state.
North Carolina-based steel manufacturer Nucor announced a new steel mill for Mason County, Canada-based electric bus manufacturer GreenPower announced a new school bus manufacturing plant in South Charleston and a health care products preparedness center being proposed by WVU Medicine and Owens & Minor in Morgantown.
Deskins said he had a positive outlook about the state’s economy looking at the recently announced economic development projects and other initiatives occurring around the state. Economic development officials need to take advantage of these successes by better promoting the state to companies and manufacturers and investing in site preparation and selection, he said.
“We have to think of this in terms of investment, putting resources behind selling West Virginia, selling plots of land, having plots of land that are ready to go for businesses, because Ohio and Pennsylvania are doing it,” Deskins said. “Kentucky is doing it. Virginia is doing it. Other states are doing it. Those states are all bigger than us, and it’s a very aggressive and very tough competition.”
The number of West Virginians no longer in the workforce is another concern for Deskins. As of November, West Virginia’s seasonally adjusted unemployment rate was 4% according to WorkForce West Virginia. But data from the Federal Reserve Bank of St. Louis shows the state’s seasonally adjusted labor force participation rate was 55.1%, putting West Virginia dead last for the number of residents in the workforce or actively looking for work.
Deskins said some of the issues with workforce participation can be attributed to the state’s aging population retiring from the workforce. West Virginia also is ranked 50th when it comes to residents within prime working age between 25 and 54 in the workforce. Deskins said this is driven by poor educational outcomes, health issues and substance abuse.
“Even if you restrict it to prime working age, West Virginia is still 50th among the 50 states for workforce participation, so the issue is related to the fact that we’re old but it’s more than that,” Deskins said. “Getting more of our people in the workforce is crucial for economic development. In order to get a business to come to West Virginia, we have to be able to convince that business that it can find the workers that it needs in West Virginia.”
Deskins encouraged lawmakers to think regionally when considering ways to improve the economy. While some parts of the state have seen large improvements in employment, such as parts of the Northern Panhandle, Eastern Panhandle and North Central West Virginia, much of the central parts of the state and Southern West Virginia have seen declines.
As the state is set to receive billions of dollars in federal investment from the American Rescue Plan and the hard infrastructure package passed by Congress in November, Deskins said the state needs to think about how to best use those dollars long-term to improve the state.
Lastly, Deskins said the state needs to continue to build on the successes in recent years when it comes to tourism. As Deskins spoke, dozens of tables lined the upper rotunda of the Capitol for Tourism Day at the Legislature. Deskins said there is still more than can be done to boost tourism.
Deskins also said the state’s outdoor amenities can be used to recruit remote workers who can relocate anywhere for their jobs. Last year, former Intuit CEO and current Marshall University President Brad Smith started the Ascend West Virginia program. Ascend gives $12,000 to remote workers who relocate to Morgantown, Shepherdstown or Lewisburg, Ascend also awards remote workers with a year’s worth of free outdoor recreational opportunities donated by resorts and outfitters.
“It’s a way to create momentum, a way to start some of our communities moving in the right direction by attracting remote workers,” Deskins said. “We can say keep your high-paying job in New York or Washington or Chicago and come to West Virginia and enjoy our low cost of living here. Enjoy some of the cool outdoor amenities. This is some of the best things to market to remote workers.”