County by County Unemployment Rates in the Mountain State

Below is a map of county unemployment rates for 2012 in West Virginia. Statewide, West Virginia averaged an unemployment rate of 7.3% in 2012. As the map shows, county unemployment levels ranged from just under 5% to over 12%. The county with the lowest unemployment rate was Monongalia, home of WVU, with an unemployment rate of 4.9%, while the highest unemployment rate was found in Webster County, with a rate of 12.4%. 

The map shows some interesting patterns to the state’s county unemployment rates. The low unemployment rate in Monongalia county seems to follow Interstate 79 through Marion, Harrison, Lewis, and Gilmer counties, all of which have unemployment rates below the state average. Other counties with low unemployment rates include Jefferson County in the eastern panhandle, Kanawha and neighboring Putnam County, and Monroe County in the southeast corner of the state.

The state also appears to have a belt of high unemployment across its midsection, stretching from Mason to Pocahontas County. Unemployment rates are also higher in the state’s southern coalfields, with the counties between Boone and McDowell all having above average rates. 

It is also difficult to see the impact of the Marcellus Shale in the county map, with hotbed counties like Wetzel County with an unemployment rate over 10%.

Compared to 2011, 43 coutnies saw a drop in unemployment rates, with the biggest drop occuring in Hancock County, which fell from 11.3% to 9.4%. 10 counties saw their unemployment rates increase in 2012, with Boone seeing the largest increase, from 7.3% to 10.9%. Both Mineral and Raleigh counties had no change in unemployment rates. Overall the state’s average unemployment rate fell from 7.8% to 7.3%.

Shrinkage in the Labor Force

There has a been a lot of chatter about the shrinkage in the U.S. labor force. Brad Delong takes us to two fed studies and Rorty Bomb provides the analysis. This graph from Ezra Klein shows the long-term and accelerated decline in labor force participation:

 

As the graph points out, the labor force participation rate in the U.S. is at a 30-year low. The labor force participation rate is the number of people that are either employed or unemployed divided by those 16 and older that are not institutionalized. Two stories have emerged to explain the decline: long-term demographic trends and the recent recession, with each explanation accounting for about half of the decline. The retiring of the baby-boomers is the central demographic factor that is causing a drop in labor force participation. The other crucial factor is the increasing number of workers leaving the workforce because they are discouraged (U-5 in BLS nomenclature) and can’t find work. These trends could have serious implications for the nation and West Virginia.

Let’s look at some West Virginia numbers. West Virginia has the lowest rate of labor participation in the nation at 54.3 percent – nearly 10 percentage points below the U.S. average. West Virginia has also seen a lot more fluctuation in its rate over the last three decades. West Virginia’s lower participation rate is now at a 21-year low, while nationally the rate is at a 30 year low.
 


Similar to the nation as a whole, West Virginia has seen a sharp decline in labor participation among males and a steady increase among females. In 1979, the rate was 71.3 percent for males compared to 59.9 percent in 2011. Females, on the other hand, have increased their participation in the labor force from 38.8 percent compared to 48.9 percent over this 32-year time period.
 

As we noted previously in Jobs Count:

The labor force participation rate rises and falls with demographic and population shifts, changes in disability rates, and structural reasons. During an economic downturn, labor force participation usually declines because unemployed workers give up looking for work due to a lack of employment opportunities or leave the labor force to pursue more education. When more jobs are added, the rate tends to increase as people return to work or seek employment. What is unusual about the current decline in West Virginia’s labor force participation rate is that it coincides with job growth in the state. This may indicate that many of the state’s workers do not have the skills to meet the demands of the current job market.

West Virginia’s participation rate could decline more in the future, because the state’s working age population (20-64) is projected to shrink by 104,000 from 2010 to 2035. This demographic change alone could lower West Virginia’s labor force participation rate 5.2 percentage points over the next 25
years, from 54.3 percent to 49.1 percent.

While there are many factors contributing to West Virginia’s low labor force participation, including a large and informal and rural economy, lack of economic opportunity, gender, deep poverty, and cultural issues, However,  one crucial factor is the low educational level of the state’s labor force. In 2010, only 51 percent of the state’s workers had a post-secondary education, ranking West Virginia lowest in the nation. Approximately 26 percent of the labor force had some college experience or an associate’s degree, while only 25 percent had a bachelor’s degree or higher.

By improving post-secondary education attainment rates among adults, particularly those with low skills, West Virginia could also meet the demands of future employment needs.

Extending Payroll Tax Cut and Unemployment Benefits Thousands of West Virginians

Last night, in his State of the Union address, President Obama asked Congress to pass an extension of the payroll tax cut without delay. The original tax cut, which reduced the employee share of Social Security taxes, expired at the end of 2011 and was extended for two months. Along with the payroll tax cut, Congress also passed a two month re-authorization of extended federal unemployment insurance, which provides unemployment benefits to the long-term unemployed. 

Both of these provisions will expire at the end of February without Congressional action, and a report released yesterday from the Joint Economic Committee outlines the economic impact of these two policies, underscoring the importance of their extension to West Virginia and the nation.
 
According to the report, failure to extend the payroll tax cut and federal unemployment insurance benefits for the rest of 2012 could reduce GDP growth by 1.7 percentage points in 2012, due to the negative impact on disposable personal income.
 
Extending the payroll tax cut increase the median take home pay in West Virginia by $724 for the remainder of the year, while keeping federal emergency unemployment insurance benefits would prevent 10,000 long-term unemployed West Virginians from losing their benefits on June 2.
 
Both the payroll tax cut and the extension of emergency federal unemployment benefits are effective economic stimuli, providing a large bang for the buck. Both bolster consumer demand, putting money in the pockets of those who are most likely to spend it. In addition, the payroll tax cut does not harm the financial security of social security, as the temporary reduction in payroll tax revenue has been and would continue to be made up by reimbursements from the Treasury’s General Fund.
 
While the economy in West Virginia and the nation overall has been making progress in recent months, the premature expiration of these policies could put the brakes on the recovery, and hurt the pockets of working families who are already struggling. 

Economic Recovery Takes Big Step Back

Despite a slight decrease in the unemployment rate to 8.6 percent, West Virginia lost approximately 5,000 jobs in May 2011, the largest one-month drop since July 2009. The strong growth seen in April 2011 has been negated, and West Virginia currently has 11,700 fewer jobs than at the beginning of the recession. The state has only gained 900 jobs in 2011.

Read the current issue of Jobs Count

 

Archived Issues:

April, 2011
March, 2011

 

Recession and Recovery: Employment Changes in West Virginia

West Virginia’s unemployment rate in April 2011 was 8.8 percent, down from a high of 9.7 in December 2010, but still more than double its pre-recession levels. So while the state is doing slightly better, it still has plenty of room for improvement. But did the recession affect all areas of West Virginia’s economy the same?

This chart shows seasonally adjusted total non-farm employment for West Virginia dating back to January 2008. As the chart shows, West Virginia experienced a solid year of job losses starting in September of 2008, as total non farm employment fell from 764,000 in September 2008 to 739,400 in September of 2009, a decline of 3.2%. Non farm employment remained stagnant for about five months, before starting to grow again in February 2010. Since February 2010, non farm employment has grown to 753,800, an increase of 1.9%.
 
 
 
This next chart shows changes in employment by sector, first during the downturn from September 2008 to February 2010 and then during the upswing, from February 2010 up to April 2011. This can show us which sectors were hit the hardest during the downturn, and which sectors are making the most progress.
 
 
 
The chart shows that the mining, construction, and manufacturing sectors were hit particularly hard. The mining sector fell by 3,700, a decline of 11%, construction fell by 7,300 for a 18% decline, and manufacturing lost 7,200, a 13% decline. In contrast, the health and social services sector saw an increase of 2,900, good for a 3% increase during the downturn. The government sector also saw modest growth at all three levels.
 
Since non farm employment began to grow again in February 2010, mining, retail trade, and professional and business services have seen the biggest gains. The mining sector has grown by 3,300, an 11% increase, retail trade has added 2,500, a 3% increase, and professional and business services have added 3,600, a 6% increase. Health and social services continued to grow, adding 3,600 for a 3% increase.
 
On the other hand, construction continued to decline, losing an additional 800, while manufacturing’s increase of 800 was minor compared to its loses of 7,200. And despite seeing minor growth during the downturn, federal and state government saw employment losses during the upswing. Growth remained stagnant across the rest of the economy.

Unemployment Benefits Helped West Virginia Lead the Nation

A recent US Bureau of Economic Analysis report on State Personal Income reveals the extent to which the West Virginia relied on Transfer Payments to support total Personal Income between 2008 and 2009, a time when the Great Recession was wrecking havoc on state budgets and employment outlook was particularly bleak. Transfer Payments, primarily Unemployment Insurance benefits, but also the Supplemental Nutrition Assistance Program (food stamps), Temporary Assistance for Needy Families (TANF), and other social safety net programs was instrumental in leading the way to growing Personal Income between 2008 and 2009 despite contractions in Personal Income from all but three other states. This was especially important as West Virginia’s unemployment rates shot up to 8.5 percent, a significant uptick from the 4.1 percent that had existed on the eve of the Great Recession in December 2007.

You may recall from the previous blog that the three major components to calculating Personal Income include Earnings from Work, Dividend or Interest Income, and Transfer Payments from all government sources. A person either receives earnings from a place of employment, or income from capital investments such as dividends or interest payments from loans, or income from government programs.

2006-2007 Change in Personal Income

Prior to the Great Recession, West Virginia’s Personal Income increased 4.3% from 2006 to 2007, from $51.8 billion to $54.1 billion dollars lagging behind the 5.7% average increase for the US. During this pre-recessionary period, West Virginia experienced the 5th lowest increase in Personal Income among all 50 states and the District of Columbia.

2007-2008 Change in Personal Income

From 2007 to 2008, with the national economy cooling down the US average increase in Personal Income was 4% compared to the 5.7% change from the previous year. The West Virginia economy kept chugging along ahead of the US as Personal Income increased 5.7%, from $54.1 billion dollars to $57.2 billion dollars.

2008-2009 Change in Personal Income

And, here’s where it gets particularly interesting. From 2008-2009, as the full brunt of the Great Recession was bearing down on the states’ economies, Personal Income in West Virginia actually INCREASED 2.0% from $57.2 billion to $58.3 billion (see, Table 1 below). West Virginia’s increase in Personal Income was the highest among all fifty states and the District of Columbia between 2008 and 2009, as the US average change in Personal Income was a minus 1.7%. In fact, there were only three other states with a positive change in Personal Income from 2008 to 2009 as most states experienced negative changes in Personal Incomes, largely due to declining changes in earnings.

Why did this happen? This is the result of the state’s percent of income from Transfer Payments increasing by 10.2% compared to a -0.2% decline in Earnings by Work and from a -5.2% decline in Dividends and Interest Payments.

Table 1:  Percent Change in Composition of Per Capita Personal Income

 SA04 Income and Employment Summary

2007

2008

2009

2010

Per Capita Personal Income

4.3%

valign=”bottom” width=”48″>

5.4%

2.0%

3.6%

-Earnings By Work

2.6%

4.9%

-0.2%

3.1%

-Dividends and Interest

11.9%

5.8%

-5.2%

0.6%

-Transfer Payments

4.6%

6.5%

10.2%

5.6%

 

The increase in Transfer Payments by 10.2% from 2008 to 2009 was largely due to increases in benefits from the Unemployment Insurance Compensation program.  Table 2 shows that Unemployment Compensation Benefits increased 55% compared to 7.5% Retirement & Disability Benefits, 7.7% Medical Benefits.  Other significant increases in Transfer Payments were the result of a 17.1% increase in Income Maintenance Benefits such as Supplement Security Income (SSI), TANF, SNAP, and other General Assistance Programs.  Further Veterans Benefits increased by 12.3% while Education and Training Assistance increased by 20.3%. 

Table 2:  Percent Change in Composition of Transfer Payments

SA35 Personal Current Transfer Receipts

2009

All Transfer Payments

10.2%

     Retirement & Disability Benefits

7.5%

     Medical Benefits

7.7%

     Income Maintenance Benefits

17.1%

     Unemployment Insurance Compensation

55.0%

     Veterans Benefits

12.3%

     Education/Training Assistance

20.3%

 

2009-2010 Change in Personal Income

Personal Income increased an average 2.9% for the US between 2009 and 2010, a significant turnaround from the negative 1.7% from 2008 to 2009.  West Virginia’s change in Personal Income was still higher than the US average with an increase of 3.6% from $58.3 billion dollars to $60.4 billion dollars.  This time around, however, the increase of Personal Income in West Virginia was equally due to increases in Earnings by Work and from Transfer Payments, but Transfer Payments were still the leading cause of an increase in Personal Income in West Virginia from 2009 to 2010.  Table 1 above shows that Earnings by Work increased 3.1% and Transfer Payments increased 5.6%. 

The upshot of this analysis underscores the importance of ensuring the state’s Unemployment Insurance program is modernized in order to cover as many of our vulnerable unemployed as possible.  The state’s Unemployment Insurance program disqualifies too many of our current jobless worker population.  West Virginia should modify state policies that would allow the state to draw down the remaining $22 million in federal incentive payments while covering approximately 2,500 more West Virginians under the program. 

The next blog will look at the impact of ARRA funding, as a percent of total Transfer Payments, on the state’s Personal Income during the Great Recession. 

Government plays key role in keeping people out of poverty

Approximately one in seven West Virginians found themselves in poverty during the recession years of 2008 and 2009. This number would have been even higher without crucial assistance from government programs (Figure 1).

Figure 1. West Virginians in poverty with and without government programs

Source. Current Population Survey, Annual Social and Economic Supplement, 2010. Microdata analysis by author.

If West Virginia families had relied solely on their own resources and on assistance from their employer, relatives and friends, or non-governmental agencies, twice as many people – an additional 272,000 people – would have been in poverty. Without governmental aid, three in ten West Virginians would have found themselves below the poverty line.

Two programs in particular proved to be the greatest anti-poverty tools. Social Security had the largest effect, keeping nearly 217,000 people out of poverty. This roughly equals the combined population of Charleston, Huntington, Morgantown (including students), Wheeling, and Parkersburg! The effectiveness of this program might be dampened in 2010 and 2011, because benefits will not increase by a cost of living allowance.

Unemployment insurance also played a key role in keeping many West Virginians out of poverty. As joblessness rose in the state, more unemployed workers qualified for assistance. In addition, provisions in the Recovery Act that increased weekly benefits and weeks of benefit coverage made unemployment insurance an even more effective anti-poverty program. Without these jobless benefits, an additional 15,000 people in West Virginia would have been in poverty.

How Has the Recession Affected Your Community?

Here is an animated “heat map” that shows how unemployment rates have changed across the state during the recession. While the national recession officially began in late 2007, it didn’t begin to impact West Virginia until late 2008. The map tracks unemployment rates by county from August 2008 to August 2010. As the unemployment rate rises, the colors change from white to green to red to finally gray as the unemployment rate reaches past 15%.

 
Unemployment Rates
Source: West Virginia Center on Budget and Policy analysis of BLS data

State Employment Lowest Since 1994

Since the national recession started in December 2007, West Virginia has lost 18,200 jobs or 2.4 percent of its job base. West Virginia’s job deficit – or the total number of jobs needed to keep pace with the working age population growth since the recession started –  is about 25,600. 
West Virginia’s seasonally adjusted unemployment rate was 8.6 percent in July, up 0.1 from June.  Total July non-farm employment stands at 742,500, with a decline of 4,500 jobs from last month, with about two-thirds coming from seasonal losses in local government. The good news was a small gain of 300 jobs in manufacturing and mining. Despite this positive sign, West Virginia’s private sector has created only 700 jobs since last July  – the date many believe to be the official end of the recession. Even more troubling is that 28,200 workers have left the labor force during this period. 
 
While non-farm employment has been growing (ever so slightly) this year, the number of state residents employed continues to decline. In July, only 709,500 state residents were employed –  its lowest point since March 1994 (seasonally adjusted). This helps explain, to some extent, why new jobless claims still remain high
 
The central reason why we’ve seen little in the way of economic expansion is a lack of consumer demand and the unwillingness of Congress to pass a larger, more serious, jobs creation package. Absent this action, the economic doldrums will continue here and around the country.