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West Virginia has a population of 1.85 million, including a civilian labor force of 803,700. West Virginia ranked third among the states in total energy production in 2010. It was the largest coal producer east of the Mississippi River that year, accounting for 12 percent of the U.S. total coal production. The state also has abundant natural gas, timber, stone, cement, and salt. Of approximately 755,500 persons employed in non-farm jobs in July 2012, the services sector accounted for 641,700 and the goods-producing sector accounted for 113,800. The largest number of persons employed in the services sector worked in government, 150,700 (federal, state, and local); followed by trade, transportation and utilities, 132,900; education and health services, 127,600; leisure and hospitality, 74,600; professional and business services, 63,900; other services, 54,400; and financial activities, 27,300. In the goods-producing sector, 47,200 worked in manufacturing, 35,800 in construction and 30,800 in mining and logging. About 58,900 residents were unemployed in July 2012, a rate of 7.4 percent, compared with the national rate of 8.3 percent.

With a gross state product (the market value of all goods and services produced) of $66.8 billion in 2011, West Virginia ranked 40th among the 50 states and the District of Columbia. The state ranked 48th in per capita income, which was $33,513. It was estimated that 13.8 percent of the work force were members of unions in 2011. The state’s 10 largest private employers as of 2012 were (in order of number of employees): Walmart, West Virginia United Health System, Charleston Area Medical Center, Kroger, Consolidation Coal Company, Lowe’s Home Centers, Mylan, Mentor Management, St. Mary’s Medical Center, and American Electric Power.

Colleges and universities, WorkForce West Virginia, vocational-technical centers, employers and private consultants conduct education and job training. The state has 11 public colleges and universities, eight independent colleges and universities, and 10 community and technical colleges. West Virginia University in Morgantown and Marshall University in Huntington are the largest public universities in the state. Secondary and primary education are administered through approximately 760 public elementary and secondary schools and more than 170 private schools.

With only two metropolitan statistical areas (MSAs) contained entirely within the state (Charleston, ranked 156th out of 366 in population and Morgantown, ranked 293rd), West Virginia is predominantly rural. However, it is not a major farming state. Agriculture is largely confined to river bottomlands, a few small plateaus, and fertile valleys in the Eastern Panhandle. The principal crops are hay, apples, peaches, and corn. Also produced are broiler chickens, cattle, sheep, and dairy products. In 2011 there were 22,500 farms and the average size was 162 acres.

Some of the state’s border counties lie within interstate metropolitan statistical areas. These include the Washington-Arlington-Alexandria MSA; Huntington-Ashland MSA; the Parkersburg-Marietta-Vienna MSA; the Wheeling MSA; the Steubenville-Weirton MSA; the Hagerstown-Martinsburg MSA; the Cumberland MSA; and the Winchester MSA.

After more than a century of intensive exploitation, West Virginia still has abundant natural resources. In 2010 West Virginia ranked third among the states in total energy production, producing 3.7 trillion British thermal units of energy—5.3 percent of the nation’s total. The state’s natural resources include an estimated 53 billion tons of recoverable coal reserves, 7.2 trillion cubic feet of natural gas, 17 million barrels of crude oil reserves, and 12 million acres of timberland. Major chemical industries are concentrated in the Ohio and Kanawha river valleys. There are steel manufacturing facilities in the Northern Panhandle and Huntington. Forests cover 78 percent of the state, much of it hardwoods suitable for the lumber industry.

West Virginia is within overnight trucking distance of half of the U.S. population and about a third of the Canadian population, giving the state’s businesses easy access to markets via truck, rail, air, and river barge. More than 38,000 miles of public roadway includes six interstate routes. Of the state’s 32 public airports, seven have commercial airline service: Yeager (Charleston), Tri-State (Huntington), Raleigh County Memorial (Beckley), Greenbrier Valley (Lewisburg), Mid-Ohio Valley Regional (Parkersburg), North Central West Virginia (Bridgeport/Clarksburg) and Morgantown Municipal.

Two main line freight carriers (CSX and Norfolk Southern) as well as 11 short line railroads and Amtrak operate on 2,401 miles of railroad track. With 682 miles of navigable waterway, the state is developing its river terminals and public ports to accommodate the needs of shippers. West Virginia’s navigable rivers feed into the Ohio River, providing access to the Midwest and the Gulf of Mexico.

West Virginia has made significant progress in developing its telecommunications infrastructure. There are more than 9,000 miles of fiber optic cable, and public and private sector strategies for future economic growth envision a continued emphasis on digital communications, including the Internet. The dominant telecommunications company is Frontier Communications, which provides telephone and related services to more than 90 percent of the state’s population.

The health care and social assistance sector includes 4,972 businesses. The sector directly employs 111,804 people and accounts for 15 percent of total wages in West Virginia.

Tourism is a growing industry, featuring 32 state parks, five Alpine and two Nordic ski areas, whitewater rafting, and other attractions, such as the world-famous Greenbrier resort White Sulphur Springs and the Summit Bechtel Family National Scout Reserve in Glen Jean. The state’s picturesque scenery, low crime rate, and other lifestyle factors are economic assets for tourism and a magnet for retirees.

As an incentive for economic development, the state offers tax credits for business investment and job expansion, corporate headquarters relocation and small businesses. The primary business taxes are the corporate net income tax, the business franchise tax and the property tax. Generators of electricity are charged an annual business and occupation tax; natural resource extractors pay severance taxes; and the state has a telecommunications tax. Employers also contribute to the state’s unemployment compensation fund. Direct consumer taxes include a personal income tax and a state sales tax.

West Virginia’s modern economy has its roots in the rapid development of railroads, mining, and industry following the Civil War. The economic expansion attracted African-Americans from the South as well as immigrant workers from Southern and Eastern Europe, who joined the descendants of Germans, English, and Scotch-Irish who previously had settled in what is now the state. By the turn of the century, West Virginia had emerged as a significant contributor to the nation’s industrialization and expansion, although it remained somewhat disadvantaged compared to neighboring states due to its rugged terrain.

Historically, coal has had a mixed impact on the West Virginia economy. West Virginians have gained jobs and income by providing a key fuel to domestic and overseas customers, and the success of the coal industry has produced secondary benefits among other segments of the economy. At the same time, dependence on coal has produced recurring boom-bust business cycles in various regions of the state. The coalfields are among the least diversified parts of West Virginia.

During the first half of the 20th century, the coalfields were unionized, and wages and living standards improved. However, during the 1950s and 1960s, increasing mine mechanization and weakened labor demand triggered an out-migration from the coalfields and an overall decline in state population. During the 1960 presidential election and afterward, the state received adverse national attention as a symbol of Appalachian poverty. (In 2010, 17.4 percent of West Virginians were below poverty level, compared with 15.1 percent nationally).

The 1970s saw a resurgence of coal as an energy resource. During this period, the chemical, steel, and glass industries were modernized, and newer advanced-technology industries began to appear. Migration within the state from agricultural and mining regions to more urbanized areas reflected a desire on the part of many West Virginians to seek better educational and employment opportunities.

During the 1980s, as coal demand weakened again, new local regions of poverty appeared in the coalfields, and employment declined in the chemical, glass and manufacturing industries. In response, the public and private sectors put renewed emphasis on cooperating to diversify the economic base, to improve education and job training, and to upgrade the state’s infrastructure.

State job growth is forecast to average one percent per year during the five-year period ending in 2016—below the expected national rate of 1.6 percent per year. Job growth in natural resources and mining is expected to slow significantly during the period, with job losses in coal mining expected to be offset by job gains in other sectors, primarily oil and gas extraction as development of the Marcellus Shale accelerates. Construction and manufacturing jobs are forecast to rise on average over the five-year period, although most job growth is expected to occur in service-providing industries—especially health care; professional and business services; and trade, transportation and utilities. The number of people living in the state is expected to remain unchanged during the period.

Among the occupations requiring a doctoral or professional degree that are expected to be in high demand in the period 2010-2020 are: clinical, counseling and school psychologists; lawyers; pharmacists; and physical therapists. Occupations requiring a bachelor’s degree that are expected to be in high demand range from accountants and auditors to social workers, special education teachers, public relations specialists and recreation workers. Occupations requiring an associate’s degree that are expected to be in high demand include paralegals and legal assistants, registered nurses, respiratory therapists and radiologic technologists and technicians. Occupations requiring a high school diploma or equivalent that are forecast to be in high demand range from claims adjusters to medical secretaries.

The state’s leadership in recent years has emphasized economic diversification, as well as improvements in education and infrastructure as critical to West Virginia’s future. These emphases are intended to overcome factors that historically have hampered West Virginia’s economy, including inadequate infrastructure, low educational achievement, outdated job skills, rugged topography, low population density, and lack of airport and port facilities.

This Article was written by Larry Sonis and George Hohmann

Last Revised on September 17, 2012


West Virginia Business and Economic Review, (Winter 2001).

Cite This Article

Sonis, Larry and George Hohmann "The Economy." e-WV: The West Virginia Encyclopedia. 17 September 2012. Web. 22 March 2018.


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