In the New York Times this weekend there was an interesting article about the Gallup Economic Confidence Index, which measure's people's confidence about the economy. The index is created through two poll questions, one which asks respondents if the current economic conditions are excellent, good, fair, or poor, and whether the economy is getting better or worse. For both questions the percent of negative answers is subtracted from the percent of positive answers to come up with the index.
The most recent results
shows that people are pessimistic about the economy across the country (with the exception of those in Washington, D.C.). And of all the states, people in West Virginia are the most pessimistic, with an Economic Confidence Index of -44.
So why are West Virginians so pessimistic? In terms if GDP growth, West Virginia has been doing relatively well. In 2010, the state's GDP grew 4%, good for 5th in the nation among the states, and much higher than the national rate of 2.6 percent.
When it comes to employment growth, West Virginia has been less impressive. According to the QCEW, West Virginia's total employment grew 0.6 percent in 2010, putting us in the middle of the pack for state employment growth, but still positive.
So despite positive growth in West Virginia, West Virginians are still pessimistic. An item from a recent Jobs Count
may provide a clue as to why. West Virginia's employment to population ratio is at a 20+ year low, and is the lowest in the country. In July 2011, only 48.6% of West Virginia's working age population had a job. With more than half of the state's working age population without a job, its no surprise that West Virginians are pessimistic about the economy. Until the growth in GDP starts to translate into jobs, and those jobs go to West Virginians, they likely will stay pessimistic.