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.
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.
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.
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.
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.
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.
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.