7 Things You Need to Know About Why Coal is Declining in West Virginia (1 of 7)

West Virginia’s coal economy is not what it used to be. In 2013, coal production hit a 30-year low and employment in the industry fell to a nine-year low. While the coal industry and other like-minded people have put most, if not all, of the blame on President Obama and the Environmental Protection Agency’s “war on coal”, the evidence paints a much more complicated picture  of a coal region that is in the wake of a structural decline due to market forces and regulations.

Meanwhile, other commentators have written that there is “no war on coal” and that the recent development of shale natural gas is the driving force behind coal’s woes. The problem with this argument is that the growing competitiveness of natural gas for electric power generation is being partly driven by concern over current and future regulations of greenhouse gases. In other words, it is a much safer move for utilities – given the uncertainty of future carbon pollution regulations – to make the switch to natural gas given the growing concerns about climate change.

This series of posts is aimed at providing a more complete picture of why coal is declining in West Virginia. In doing so, policymakers and others will have a better understanding of the root causes of the problem and will be better positioned to guide policy action to meet these challenges.

#1 Coal is declining in southern not northern West Virginia (so far)

 The first thing you need to know about the decline of coal in West Virginia is that it is primarily happening in southern West Virginia. As this chart shows, the recent decline in production is mostly from the southern part of the state, where production has dropped from 130 million tons in 1997 to just over 70 million tons in 2013. Meanwhile, production in the northern part of the state has remained relatively flat since the mid-1990s. In 2013, the counties in the northern part of the state produced over one-third (37%) of the coal in the state, compared to just 21 percent in 2002.

so wv coal production

Perhaps nothing highlights this transition more than the fact that that Marshall County, which is located in the state’s northern panhandle, is now the state’s largest coal producer (2012 and 2013), pushing past Boone County, which as led the state for over three decades in coal production. Between 2008 and 2013, coal production in Boone County dropped by more than half, from 30.3 million tons to just 14.2 million tons. Meanwhile, Marshall County coal production rose over this period from 10.8 million tons to 15 million tons.  

Coal mining employment in West Virginia has also shifted north. In fact, as of the 2nd quarter of 2014, the number of coal miners in the northern part of the state was at a 15-year high of 7,162 according to data from the Mine Health & Safety Administration. Meanwhile, the number of coal miners working in southern West Virginia declined from a high of over 18,500 in late 2011 to just 13,300 by early 2014, a drop of nearly 5,000 jobs. The northern region now makes up about 35 percent of coal mining jobs, its highest share since 2000.

coal jobs north

The decline of coal production  in the south and the relatively stable production in the northern part of the state has to do with many factors (see more in future posts). The northern part of the state, similar to other western coal basins, contains mostly medium and high sulfur coal, while the southern coalfields have mostly low and medium sulfur coal. For years, many coal power plants were able to use low-sulfur coal to meet pollution requirements contained in the 1991 Clean Air Act instead of installing expensive anti-pollution scrubbers at their plants. Eventually through, all of the plants were required to install this equipment and this meant that the low-sulfur coal in the southern part of the state became less competitive as other power plants became outfitted to burn medium and high sulfur coal.

The transition or shift in coal mining from the south to the north is part of a larger structural decline that is taking place in the entire Central Appalachian region. This area, which includes southern West Virginia, eastern Kentucky, western Virginia, and eastern Tennessee, has been declining for well over a decade. From its peak in 1997 of 291 million tons, it has fallen by over half (56%) to just 127 million tons in 2013.  While Central Appalachian coal production began its decent in the late 1990s, it has dropped much faster over the last several years.

 central app coal

From 2008 to 2013, it fell by nearly 46 percent, or from 226 million tons to just 127. As the graph above shows, northern Appalachia produced nearly as many tons of coal as the Central Appalachian Region did in 2013. Corresponding with this decline is the falling share of coal production in Central Appalachia compared to other regions. In 1990, Central Appalachia made up nearly 29 percent of coal production in the United States. In 2013, this dropped by more than half to about 13 percent in 2013. Meanwhile, Northern Appalachian production has remained relatively steady declining from 16 percent to 12.5 percent. Today, both regions account for nearly the same share of U.S. coal production.

 In the next few posts, I’ll explain the factors driving the decline of coal in southern West Virginia and what the prospects look like for the future.

Insurance Industry Doesn’t Understand Retirement Access

In Sunday’s Gazette-Mail, John E. Pauley, the executive director of the West Virginia Chapter of the National Association of Insurance and Financial Advisors, wrote an op-ed making several dubious claims about the state of retirement security in West Virginia and about the proposed Voluntary Employee Retirement Accounts (VERA) program that is being supported by AARP. 

For example, Pauley says:

The AARP claims that 250,000 West Virginia workers lack access to an employer-based retirement savings option. This is simply not true. The real question is whether workers who currently choose not to explore private market retirement options would suddenly consider retirement advice from a state-managed plan?

To use Pauley’s own words, this is simply not true. According to the Current Population Survey from 2011-2013, approximately 287,645 private-sector workers in West Virginia work for an employer that does not provide any type of retirement plan. This is about 47 percent of the state’s private-sector workforce. Pauley offers no evidence to the contrary. Instead, he just changes the subject by asking whether these workers would enroll in a private market retirement plan if they were offered one from the state. While this a good question, it has virtually nothing to do with how many workers lack access to retirement plans at work.

The good news is that research shows that when workers do have access to retirement plans at work they usually take advantage of them.  According to a recent study by the Boston College Center for the Study of Retirement Security, 86 percent of older low-income workers and 95 percent of higher-income workers participate in retirement savings plans when they are offered one at work.

Pauley also says that the $3 million in start-up costs for VERA would be better used for financial educational campaigns and tax incentives. The problem here is that the $3 million in start-up costs is a loan from the state’s unclaimed property fund that will be paid back by account fees over time. Therefore, this is not $3 million that is available for program services or tax incentives unless Pauley wants to add a new line-item in the budget.

Pauley also errs when he tells readers that the state will incur a financial liability in implementing VERA similar to state public pensions. Unlike the defined benefit plans Pauley mentions, VERA would be a defined contribution plan similar to the state’s 457 Retirement Plus and  SMART 529 College Savings plan that is administered by a private-sector financial company. Therefore, it would not be a liability on the state’s books. Pauley also asserts that VERA “presents significant risks, costs and liabilities… for West Virginia’s small employers.” This claim is also unsupported by the evidence. There would be no more risks for small employees than if they started a SIMPLE IRA or 401k with a private company.

While Pauley is correct in saying that “there also is no guarantee” that VERAwould earn tax-preferred status from the IRS” so far there is little to no evidence to suggest that the IRS wold not allow VERA IRA plans to be tax-deferred accounts. If enacted, the State Treasurer’s Office will have to submit the plan to the IRS in order for it to be tax-deferred plan.

While there is some uncertainty in how the proposed VERA program would roll out and work, it is pretty safe to say that if West Virginia does nothing it will continue to have almost half of its workforce without a retirement plan at work. This means that the state will have to spend much more money down the road on senior services and other programs as the population ages.

As one newspaper editorial concluded in early May, “Pension promises are easy to make and difficult to keep. Legislators should stay clear of them.” – See more at: http://www.wvgazette.com/article/20141019/ARTICLE/141019104/1103#sthash.EmXHfQeI.dpuf

 

250,000 West Virginia workers lack access to an employer-based retirement savings option. This is simply not true. The real question is whether workers who currently choose not to explore private market retirement options would suddenly consider retirement advice from a state-managed plan? – See more at: http://www.wvgazette.com/article/20141019/ARTICLE/141019104/1103#sthash.EmXHfQeI.dpuf

Budget Beat – October 17, 2014

SCORE Initiative Announced

Yesterday at the state Capitol, Senate President Jeff Kessler announced the kick-off of his SCORE initiative, Southern Coalfields Organizing and Revitalizing the Economy.

In a statement released yesterday, Senator Kessler cited these goals for SCORE:

  • Increase funding for tourism advertising and development
  • Education and workforce development and retraining initiatives
  • Dedicating monies for viable redevelopment projects
  • Agribusiness and rural development opportunities
  • Increase Broadband access
  • Expanding and supporting intermodal transportation
  • Explore development of coalbed methane reserves
  • Support clean coal research and development

In last month’s State of Working West Virginia, the WVCBP outlined the challenges facing southern West Virginia as coal-mining jobs continue to decline and market pressures slow coal production. Transition assistance is needed for the region and the SCORE initiative is a step in the right direction by policymakers.

Read more in the Charleston Gazette’s Coal Tattoo blog.

VERA Presentation at Next Week’s Interims

Next Tuesday, October 21 at 4:00PM, WVCBP’s Fiscal Policy Analyst Sean O’Leary will present to state legislators on the need for Voluntary Retirement Accounts (VERA).

The WVCBP, along with the West Virginia Chapter of the AARP, has long supported VERA as a way for West Virginia’s aging population to prepare financially for retirement. Many West Virginians have no access to a retirement plan at work, and VERA would provide a voluntary mechanism for small businesses to help their employees while retaining workers. Stop by the House Judiciary Committee next week to learn more when Sean makes his presentation.

VERA infographic
Reminder: Registration Now Open for Summit on Race Matters in Appalachia

The Summit on Race Matters in Appalachia is less than a month away – please hold your seat by registering today!

We’ve added another nationally known speaker, Dustin Washington, Director of the Community Justice Program with the American Friends Service Committee.

The event costs just $25 which covers registration for both days.

To learn more about the event and register, visit www.wvpolicy.org

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What is a Safe Water System? Let’s Make it Happen!

A panel discussion & community conversation on our water

Thursday, November 6th
7-9pm (doors open at 6:45)
University of Charleston, Erma Byrd Gallery (in Riggleman Hall)
Event is free. Register here

Speakers include: Dr. Rahul Gupta (Kanawha-Charleston Health Department), Fred Stottlemyer (former director of Putnam PSD), and other safe water experts.

Despite legislation and promises from our politicians, our drinking water system is still at risk. The Public Service Commission’s investigation of WV American Water has been pushed back until next year, and the legislation we have won is at risk. Hear experts explain what a safe water system might look like, and discuss among our community how we can achieve that goal.

Sponsored by: Advocates for a Safe Water System, WV Center on Budget & Policy, WV Council of Churches, National Association of Social Workers, and WV Healthy Kids & Families Coalition.

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Budget Beat – October 10, 2014

Registration Now Open: Summit on Race Matters in Appalachia

The WVCBP is a proud sponsor of the Summit on Race Matters in Appalachia, taking place November 10 & 11 in Charleston.

You won’t want to miss the Summit’s two amazing keynote speakers: Dr. Gail Christopher with the Kellogg Foundation, and Michael Wenger, author of My Black Family, My White Privilege. They will join other speakers to lead us through discussion of the powerful film “Cracking the Codes: Social Determinants of Racial Inequality.”

The event costs just $25 which covers registration for both days.

Register today to hold your seat! 

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Economic Recovery Not Reaching Southern Coalfields

Last week we released State of Working West Virginia 2014: Economic Recovery and Transition in the Mountain State. As cited in the report, recovery from the Great Recession isn’t bringing much relief to the state’s southern coalfields, as noted in the Logan Banner, one of that region’s newspapers. The Beckley Register-Herald also quoted the report in this article, where the headline says it all – Pay Attention: Policy Changes Can Have Major Impacts on People.

SWWV 2014 cover

Development Plan for Early Childhood in West Virginia

Last week we posted here about how the West Virginia Early Childhood Planning Task Force has released a draft of its Development Plan for Early Childhood in West Virginia. The public comment period closes this Sunday, October 12 on the report. Comments can be sent to jenny@terzettocreative.org.

For more on this important project, check out Pay for Success Financing and Early Intervention Programs: Recommendations from the Pay for Success Working Group to the West Virginia Early Childhood Planning Task Force. WVCBP Executive Director Ted Boettner is one of this report’s coauthors.

Budget Beat – October 3, 2014

West Virginians Working Harder, Pay Not Keeping Up

West Virginia’s economy is recovering from the Great Recession but low- and middle-income workers not are seeing similar growth in their paychecks, according to the annual State of Working West Virginia, released this week, by the American Friends Service Committee and the WVCBP.

Incomes remain stagnant for many West Virginia workers unless they are high-wage earners. Additionally, the report describes how the state’s energy economy is shifting northward, toward the booming natural gas industry, while in the south coal production continues its decline.

Read more in the Charleston Gazette, Beckley Register-Herald, Associated Press or listen to American Friends Service Committee Director Rick Wilson on West Virginia Public Broadcasting.

SWWV 2014 cover

Save the Date! Summit on Race Matters in Appalachia Coming to Charleston

Mark your calendars today for the Summit on Race Matters in Appalachia, taking place November 10 & 11 in Charleston. The event will include a screening of Cracking the Codes: The System of Racial Inequity and two nationally reknowned keynote speakers.

Look for registration information in next week’s Budget Beat!

Long-Time Health Care Advocate Set to Retire

At the end of the year, Perry Bryant, Executive Director of West Virginians for Affordable Health Care plans to retire. The WVCBP has worked closely with Perry over the years on many health-related policy issues and West Virginia has been lucky to have Perry here working on behalf of all of us who have the right to affordable, accessible health care. Happy Retirement to Perry! Read more about his career and accomplishment in this week’s Daily Mail.

More on Health Care…

Speaking of health care, WVCBP Health Policy Analyst Erin Snyder talks about the state’s health exchange in this week’s Charleston Gazette. The possibility of private independent exchanges coming to West Virginia could mean more choices for consumers and savings for employers.

ICYMI – check out this op-ed by WVCBP president Renate Pore on an interesting initiative coming to Kanawha County, Choosing Wisely, which promises to contain health care costs while improving care.

 Stock Photography: Nurse Checking Listening to Boy's Chest with

Share Your Comments on Building a System for Early Success

The West Virginia Early Childhood Planning Task Force has released a draft of its Development Plan for Early Childhood in West Virginia. The public is encouraged to submit comments on the report by October 12 to jenny@terzettocreative.org or Terzetto Creative, PO Box 188, Barboursville, WV 25504.

Here is some background on the Task Force from the report’s introduction:

Recognizing the importance of the earliest years of life, Governor Earl Ray Tomblin created the Early Childhood Planning Task Force in May 2013. The Task Force was charged with creating a development plan for West Virginia’s early childhood system. A 10-year plan for improving early childhood programs, financing and governance was completed in September 2014.

The Task Force partnered with the state’s Early Childhood Advisory Council on the creation of the plan. More than 1,200 West Virginians provided input through community forums, stakeholder discussions, study groups, an online survey and key informant interviews. The ultimate goal is for more pregnant women, young children and their families to receive the services they need and want. Our litmus test for the recommendations included in the plan was, “Will this work for the children we love and for the children in our state who are the most vulnerable?”

Budget Beat – September 26, 2014

More on Last Week’s Poverty Numbers: Rich Getting Richer

Last week ‘s data on poverty in West Virginia showed that the number of children and families living in poverty is still too high. What we also learned is that the state’s economy is starting to grow again, post-recession, but it’s the wealthiest in the state who are seeing the biggest boost. The gap between low-income workers and high wage earners continues to grow and the recovery is not boosting the state’s middle class. For more, here is Sean’s blog post.

Income inequality affects different states in different ways, and is caused by different policies. With the incomes of lower- and middle-class families remaining stagnant, however, no matter where you live those families will have less to spend. More in this Washington Post article on the far-reaching impacts of income inequality.

income inequality

State of Working West Virginia: State’s Energy Economy is Moving North

West Virginia is still a coal state but production has been declining in the south and held steady in the north. That trend, coupled with the boom in natural gas production, means West Virginia’s energy economy landscape is changing.

Our annual State of Working West Virginia report, due out next week, will paint the complete picture on the state of West Virginia’s current employment situation and recommendations for how to give coal miners and the state’s economy a smoother transition as coal plays a smaller and smaller role.

A sign of the changing role of coal and other fossil fuels hit Wall Street this week when the Rockefeller Brothers Foundation announced it would divest its interests in carbon-emitting energy sources. Read local reaction in this week’s Charleston Gazette.

 

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Constitutional Amendment Clarifies Property Tax Law, But Just for Boy Scouts

On November 4th, a constitutional amendment will be on the ballot to allow the Boy Scouts of America to rent out its Summit Bechtel Reserve to for-profit businesses without losing its non-profit property tax-exempt status.

The Summit Bechtel Reserve is a 10,600 acre outdoor activity center that hosts the National Scout Jamboree. In addition to hosting the Jamboree, the Boy Scouts wish to use the reserve to host other events, and use the profits from those events to maintain the property and offset expenses. However, the Boy Scouts are concerned that by leasing the facility to a for-profit business, they could lose their property-tax exempt status, leading them to seek the constitutional amendment.

Current West Virginia law is ambiguous as to whether or not the Boy Scouts would lose their property tax exemption if they leased their facility to a for-profit business. The West Virginia Constitution provides a property tax exemption for, “property used for educational, literary, scientific, religious or charitable purposes.” The Constitution does not address the leasing of property by exempt entities.

The leasing of property is addressed in state code. West Virginia code states that property used for charitable, or economic development purposes by a nonprofit is exempt, unless the property is held or leased out for profit [§11-3-9(12), §11-3-9(14)]. However, the code also states that any property owned or held in trust by a nonprofit or charitable organization is not exempt, unless the, “property, or the dividends, interest, rents or royalties derived there from, is used primarily and immediately for the purposes of the corporations or organizations [§11-3-9(29)(d)].”

According to Dr. Calvin Kent at Marshall University, the language granting the property tax exemption to nonprofits that use rents received from the property for their organizational purpose was adopted in 1945, in response to a 1944 West Virginia Supreme Court decision in which a nonprofit organization that used the profits of a commercial hotel it owned for charitable purposes lost its property tax exemption.

Since the 1945 amendment, the West Virginia Supreme Court has allowed an exemption for buildings owned by a nonprofit but leased to another nonprofit, but has not considered a case where a nonprofit leases to a for-profit organization, nor has it ruled on the constitutionality of the 1945 amendment.

It is unclear whether or not the Boy Scouts would lose their property tax exemption by renting their facility to for-profit businesses under current state law. How such scenarios are treated apparently varies county by county. In a recent survey conducted by the Center for Business and Economic Research at Marshall University, county assessors where given hypothetical scenario of nonprofit foundation which owns a campsite that is rented to for-profit businesses and that rental income is used for the expenses and debt of the campsite. 11 of the 19 responding assessors said that the campsite would be exempt from property taxes, while 8 said it would lose its exemption.

In another scenario, assessors were asked about a building owned by a nonprofit, but partially leased to a for-profit, with the rental income used for the work of the nonprofit. 7 of the 16 responding assessors said that the entire building would be exempt from property taxes, while 9 said it would not be fully exempt. Of the 9 that said it would not be exempted, 8 said that the portion of the building used by the nonprofit would be exempted, while 1 said the entire building would be taxable.

With the ambiguity in state law, and disagreement among county assessor over the issue, the Boy Scouts are right to be concerned with the property tax exemption, and West Virginia’s laws do need clarifying. But the constitutional amendment on the ballot in November only clears up the issue for the Boy Scouts.

The proposed amendment clarifies that a nonprofit organization would not lose its property tax exemption on its property whether or not that property is used for the purposes of the nonprofit. However, the amendment only applies to a nonprofit, “that has as its primary purpose the development of youth through adventure, educational or recreational activities for young people and others, which property contains facilities built at a cost of not less than $100,000,000 and which property is capable of supporting additional activities within the region and the State of West Virginia.” In other words, the amendment would only apply to the Boy Scouts’ Summit Bechtel Reserve.

So while the Boy Scouts would be in the clear if the amendment passes, the ambiguity in the law would remain for everyone else. Hospitals, churches, and other nonprofits that engage in this activity would be left in limbo.

For example, the CAMC Nautilus facility is run by a for-profit corporation, but is located on CAMC property. And while CAMC Nautilus pays personal property taxes on its equipment, neither it nor CAMC, a tax exempt non-profit hospital, pays real property taxes. The passage of the constitutional amendment may imply that either CAMC or CAMC Nautilus should be paying real property taxes. The same is probably true for any other tax exempt hospitals that lease space to privately run gift shops, coffee stands, and cafeterias.

Of note is the fact that while the Boy Scouts claim to want to use the revenue for maintenance and upkeep of the park, which arguably is already legal under state law, the proposed amendment allows for the use of the property whether or not it is for the purposes of the organization. This could be the key factor. If the Boy Scouts are planning to use the proceeds from renting the facility for reasons outside the purposes of the Boy Scouts organization, then they would need the amendment to keep their tax exemption, since the code clearly states the property and rents must be “used primarily and immediately for the purposes of the corporations or organizations.”

While it is clear that West Virginia’s law need clarifying, the proposed amendment doesn’t actually fix the law. By carving out a special exemption for one organization, the state would be leaving all other organizations in limbo, and would set a bad precedent for the future. And if, as the language of the amendment implies, the Boy Scouts want to engage in activities that do not further the purposes of its organization, then they probably don’t need special tax treatment to do so.

Census Data Show Rich Getting Richer in West Virginia

Last week’s release of the American Community Survey (ACS) data contained more than just poverty statistics. It also contained some interesting information about income trends in West Virginia. As we noted last week, one of the reasons poverty has been slow to fall, despite economic growth, is income inequality, with little of the past three decades of economic growth reaching the poor and middle class (for more on that topic read this).

While we’ve covered growing income inequality before, the ACS data provides a fresh view on the extent of income inequality in West Virginia and its growth. According to the Census data, the richest 1/5th of households in West Virginia, the top 20%, take in nearly half of the income in the state. And their share has been growing in recent years.

income inequality

The trend is even more pronounced when looking at the top 5% of households in West Virginia. In 2013, the top 5% of households in West Virginia took in 21.1% of the state’s income, up from 19.8% in 2006.

The top 20% of households took home an average of $138,603 in 2013, compared to just $9,205 for the bottom 20%, and $41,253 for the household in the middle. Those in West Virginia’s top 5% had an average household income of $235,421 in 2013.

These numbers from the Census serve as yet another reminder that with growing income inequality, economic growth alone is not enough to help the middle class or lift families out of poverty. Without public policies like raising the minimum wage and expanding the EITC, more and more struggling West Virginians will see their slice of the economic pie shrink.

Gambling With Children’s Health

The health of of close to 25,000 children in West Virginia is at risk if Congress does not chose to reauthorize the Children’s Health Insurance Program (CHIP). As  Senator Jay Rockefeller mentioned in today’s Charleston Gazette, defunding CHIP could hurt not only children’s health but making it harder for families to make ends meet. CHIP is a highly successful program in West Virginia, granting quality health coverage to thousands of children from working families. 

The added benefits offered in the CHIP program might otherwise be unaffordable for many working families in state. For example, CHIP’s medical benefits include dental care, hearing aids, and additional physical/occupational therapy where marketplace coverage designed for adults does not provide these options for children.

Additionally, CHIP coverage is much more affordable for working families due to the caps on deductibles and out-of-pocket costs. A report  from the National Alliance to Advance Adolescent Health details the potential cost increases if the children in the CHIP program are moved to private marketplace plans, qualified health plans (QHPs).

chipoutof

chipdeduct
Source: Margaret A. McManus and Harriette B. Fox, “Lack of Comparability Between CHIP and ACA Qualified Health Plans” (Washington, D.C.: The National Alliance To Advance Adolescent Health, July 2014). 

These charts show that the out-of-pocket limits could cost families almost tenfold in a marketplace plan. Also, children in the CHIP program have to pay little to cover their deductibles, where, in marketplace plans, families could end up paying close to $2,500 before their insurance company will begin paying.

We shouldn’t be playing a political game with the health of  children in our state. Children have special health care needs. Ignoring the difference in needs of children and adults will put the healthy development of children at risk.

The marketplaces are not yet ready to provide the type of comprehensive coverage these children need and the costs put children at risk of becoming uninsured altogether.  West Virginians should encourage lawmakers to make sure CHIP funding is renewed and not “wait and see what happens” when the program is gone.

West Virginia Has Recovered From The Recession, It’s Poor Have Not

By most measures, West Virginia’s economy has finally recovered from the recession. Real GDP has grown by more than nine percent since bottoming out in 2009, the unemployment rate has been steadily declining, and the state finally has as many workers as it did before the recession.

gdp

But while the economy as a whole has been improving, the gains haven’t been shared by all West Virginians, particularly the state’s poorest citizens. According to data released this week from the U.S. Census Bureau, West Virginia’s poverty rate has continued to remain above its pre-recession levels.

West Virginia’s poverty rate grew during the recession, from 16.9% in 2007 to 18.1% in 2010. Since then the rate has fluctuated some, but none of the changes has been statistically significant, meaning that after rising during the recession, the state’s poverty rate has been essentially unchanged.

poverty

The same is true for the state’s child poverty rate.  The state’s child poverty rate jumped up from 22.1% in 2007 to 25% in 2010, and has yet to come back down. Once again, fluctuations in the state’s child poverty rate have not been statistically significant.

child

Poverty among children under the age of five has not followed  the same pattern as overall child poverty. The young child poverty rate was essentially flat throughout the recession, with none of the fluctuations in the rate being statistically significant. Then, in 2013, the poverty rate for children under five jumped from 28.3% to 33.2%. However, it should be noted that the children under five poverty rate has a large margin of error, particularly with one year of data. To really get a firm grip on what is happening with child poverty, we may need to wait for the three- or five-year data.

under 5

Senior poverty also diverged from the overall poverty trend. While overall poverty increased, senior poverty actually fell between 2008 and 2011, from 11.0% to 9.4%. It has since remained essentially flat, with the year-to-year fluctuations not statistically significant.

senior

Finally, in addition to the poverty data, the ACS release also has some data on incomes in West Virginia. One important income data point that can be used to measure the state’s economic health is median household income. Median household income measures the income of the typical household – or the household in the middle of the income distribution – and serves as a good indicator for how the middle class is faring. 

Adjusting for inflation, West Virginia’s median household income fell during the recession, from $41,638 in 2007 to $39,844 in 2011. It had recovered to $41,253 in 2013, but is still below its pre-recession level. Real median household income has also underperformed compared to Real GDP growth, suggesting that not only is the state’s recent economic growth not reaching the poor, its not doing a good job of reaching the middle class either.

median income

The ACS data not only showed that the state’s economic growth isn’t reaching the poor and middle class, they also showed the growth is benefiting the wealthy. The ACS also measures the state’s Gini Index, a measure of the distribution of income in a region. The higher the score on the Gini index, the greater the income inequality. A score of 1 means that all the income in a region is held by a single person, and a score of zero means that all income is held equally among the population.

West Virginia’s Gini Index has grown since the recession, from 0.454 in 2007 to 0.465 in 2013, showing that most of West Virginia’s income growth has gone the those at the top of the income distribution.

So not only did this week’s poverty data show that thousands of West Virginians are still struggling to get by, even as the state’s economy grows, but they are seeing a smaller share of the benefits of their hard work.