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Lost manufacturing jobs led to lower wages, report says

The collapse of the steel industry in the 1980s and the resulting losses in manufacturing and mining have left West Virginians with fewer good-paying jobs and wages lagging behind the national average, according to a new report from the West Virginia Center on Budget and Policy.

The sixth annual The State of Working West Virginia report looks at jobs in the state through the lens of Weirton Steel, which in 1979 was the state's largest private employer, and Walmart which is the state's largest private employer today.

The WVCBP, a left-leaning think tank, makes the case that as manufacturing jobs gave way to retail and service sector jobs in West Virginia and around the country, workers have seen pay and benefits stall and income inequality soar.

"Over the past 30 years, working families in West Virginia have been squeezed by stagnating wages and fewer opportunities, along with the rising cost of living," Sean O'Leary, one of the report's co-authors, said in a statement. "Today's workers in West Virginia are more educated and experienced than ever, but they are seeing less of the benefits of their work."

Weirton Steel once employed 14,000 unionized workers, who made an average $16 an hour in 1979, the report says. That's the equivalent of about $51 an hour in today's dollars, according to the federal Bureau of Labor and Statistics.

But after several changes of ownership including an employee buyout, the steel plant in Weirton now employs about 1,000 workers and Weirton has lost about 20 percent of its population since 1980, the report says.

Part of the former Weirton Steel plant was razed to make room for a Walmart, now the state and the nation's largest private employer.

Walmart pays its full-time workers in West Virginia an average of $12.60 per hour, according to the company's website. According to a recent Congressional report, its average wage for all employees is $8.81 per hour, the WVCBP report says.

The WVCBP report says that Walmart's low wages allow them to offer lower prices on all sorts of products, but argues that household budgets are strained primarily by things that can't be bought at Walmart - health care, higher education, transportation and housing.

This symbolic shift, from Weirton Steel to Walmart, has hurt the vast majority of West Virginians, the report says.

The WVCBP points out that since 1979 median wages have risen only for workers above the 80th percentile, while they have fallen for everybody else.

"The late '70s and early '80s were sort of a golden age for capitalism in West Virginia. Unlike the present, the middle class was growing," Ted Boettner, the director of the WVCBP and a coauthor of the report, said in a statement. "The state outperformed the nation with higher wages, stronger economic growth, more union participation, better health and pension benefits and lower income inequality."

The report says that most of those Weirton Steel jobs and others like them are probably not coming back, but that the state can still support a thriving middle class, as it once did.

It points to several recent decisions and pieces of legislation that it says could help working families.

The report praises Gov. Earl Ray Tomblin for his decision to expand Medicaid as part of the federal Affordable Care Act, a decision that will make health insurance newly available to as many 130,000 people.

It also praises Tomblin's two marquee pieces of legislation from last spring's legislative session - the education reform bill, which will require full time pre-kindergarten be made available for all 4-year-olds by 2016, and the prison reform bill, which aims to reduce prison overcrowding and will eventually establish drug courts for every county.

It also praises the recently passed Feed to Achieve Act, which requires schools to try to maximize student participation in breakfast programs and encourages districts to take further steps to take advantage of federal school meal funding.

The report makes several general suggestions that it says would help rebuild the middle class.

First, it champions a "future fund" that would collect money from oil and gas severance taxes and invest it for future economic development or infrastructure projects.

It proposes that the state invest in higher education to combat rising tuition costs and student debt.

It proposes investing in roads, bridges and public transit.

It also proposes raising the state minimum wage and creating voluntary state-administered retirement accounts.

"While it would be hard to deny that poverty has been an all-too-familiar shadow in the state's history, it has not been the whole story and need not be its fate," the report says.

Read the report: http://www.wvpolicy.org/state-of-working-west-virginia-2013-from-weirton-steel-to-wal-mart

Reach David Gutman at david.gutman@wvgazette.com or 304-348-5119.

 


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