CHARLESTON, W.Va. -- West Virginia is going through some challenging economic times. However, I'm convinced that the changes that lie ahead will be less traumatic than some that have already occurred in the lives of most West Virginians.
Recently, I worked with folks from the West Virginia Center on Budget and Policy on The State of Working West Virginia. Each year, we look at a different aspect of how working families are faring. This year's version looked at how job quality has changed over time.
The title tells it all: From Weirton Steel to Wal-Mart. The former was once our top private employer; the latter is today. And thereby hangs a tale. The full version is available online at wvpolicy.org but here are some key findings:
In the late 1970s, West Virginia outperformed the nation on several indicators, including productivity, average wages, pensions and employer-provided health care. While there were pockets of severe poverty, many working families enjoyed a solid middle class life.
All that came to a crashing end in the 1980s from a series of blows we still haven't recovered from.
While our mines increased production from 112 to 151 million tons over that decade, employment dropped by more than half as new technologies such as long-wall mining reduced the need for workers. Coal jobs dropped from nearly 63,000 in 1978 to 23,000 in 1989.
Competition from foreign steel producers, often subsidized by their governments and made under wretched conditions not only hurt firms like Weirton and Wheeling-Pittsburgh, they also devastated state metallurgical coal production.
If there ever was a war on coal miners, it took place in the 1980s. And the miners lost.
Manufacturing jobs declined by over 1/3 between 1970 and 1994, with most of that drop occurring in the 1980s, a decline that has continued. In 1979, there were over 233,000 goods-producing jobs, a number that dropped to 118,000 by 2012. Service sector jobs increased from 65 to 85 percent of jobs in the same period.
During the Great Depression, New Deal jobs and relief programs helped people weather the storm. Poverty programs were even expanded in the more prosperous decades of the 1960s and 1970s. That didn't happen in the 1980s. President Reagan's priorities included tax cuts, corporate deregulation, increased military spending, and hostility to organized labor.
As economist Dean Baker put it, these priorities "had the effect of weakening the bargaining power of workers in the middle and at the bottom of the wage distribution, thereby improving the relative situation of those at the top. The cumulative effect of the new policies was a massive upward redistribution of income." Inequality began to grow.
In the new era symbolized by the retail giant, firms such as Wal-Mart undoubtedly provided low prices for things like food, clothing and household goods. However, the shares of expenditures for these items has declined over time, while the cost of things you can't get from big box retail -- housing, health care, higher education and transportation -- has gone up. As the Economic Policy Institute put it: "The real pressures on family income are coming from items that can't be bought at Wal-Mart. These products and services can, however, be bought with higher wages."
Low prices can be expensive. Weirton Steel workers earned more in wages and benefits in 1979 dollars than the average Wal-Mart worker earns in 2013 dollars. Many workers in such establishments earn wages so low that they have to depend on public programs like SNAP (food stamps), the Earned Income Tax Credit, child-care subsidies, free or reduced school meals for children, housing assistance, Medicaid, CHIP, energy assistance and other programs just to get by.