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West Virginia had a population of 1.79 million in the 2020 census and a civilian labor force of 790,500 in 2023. West Virginia ranks fifth among states in total energy production, down from third in 2010. In 2023, it was the largest coal producer east of the Mississippi River and the second largest in the nation (behind Wyoming), accounting for 14.0 percent of the U.S. total coal production (a slight increase from the previous decade).

The state also has abundant natural gas, timber, stone, cement, and salt. Of approximately 706,200 persons employed in non-farm jobs in October 2023, the services sector accounted for 606,200 and the goods-producing sector accounted for 100,000. The largest number of persons employed in the services sector worked in government, 151,500 (federal, state, and local); followed by education and health services, 131,500; trade, transportation and utilities, 121,000; professional and business services, 73,400; leisure and hospitality, 68,800; financial activities, 25,800; and other services, 26,000. All of these experienced a slight decline from 10 years earlier, except for education/health and professional/business, which experienced slight increases. In the goods-producing sector, 45,000 worked in manufacturing, 32,900 in construction, and 22,100 in mining and logging—all slight decreases from the previous decade except for mining/logging, which lost about one-third of its workforce. About 32,000 residents were unemployed in October 2023, nearly half the number from 10 years before. The unemployment rate of 4.0 percent was down from 6.7 percent in 2013; the national rate was 3.9 percent.

With a gross state product (the market value of all goods and services produced) of about $97 billion in 2022 (compared to $66.8 billion in 2011), West Virginia ranked 42nd among the 50 states and the District of Columbia. The state ranked next to last in per capita income ($42,336), just ahead of Mississippi and behind Alabama. It was estimated that 10 percent of the workforce belonged to unions, a drop from 13.8 percent in 2011 and slightly below the national average of 11.3. The state’s 10 largest private employers as of 2022 were (in order of number of employees): WVU Medicine, Walmart, Charleston Area Medical Center, Mountain Health Network, Kroger, Lowe’s Home Centers, Contura Energy, Mon Health, American Consolidated National Resources (previously known as Murray Energy), and Macy’s Corporate Services. Dropping out of the top 10 from the previous decade were Consolidation Coal Company, Mylan, Mentor Management, St. Mary’s Medical Center (now part of Mountain Health), and American Electric Power.

Four of the top 10 employers are in the health care field. The health care and social assistance sector directly employs about 101,000 people, about 12.8 percent of the total state workforce. Between 2010 and 2019, this sector grew by about 0.8 percent annually. Based on the state’s age and health issues, it is expected to be one of the fastest-growing economic sectors in the near future.

Colleges and universities, WorkForce West Virginia, vocational-technical centers, employers, and private consultants conduct education and job training. The state has 10 public colleges and universities plus two branches of WVU, 13 independent colleges and universities (eight not-for-profit and five for-profit), and seven 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 730 public elementary and secondary schools, 134 private schools, and four charter schools.

Only two metropolitan statistical areas (MSAs) are contained entirely within the state. Charleston (including Kanawha, Jackson, Boone, Lincoln, and Clay counties) ranked 191st out of 392 nationally in population. The Morgantown MSA (including Monongalia and Preston counties) ranked 297th. 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. Counting MSAs that cross state lines, both the Huntington and Martinsburg metro areas rank higher than Charleston or Morgantown.

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 (10th in the nation), corn, and soybeans. Also produced are broiler chickens, cattle, sheep, and dairy products. In 2022 there were 22,500 farms and the average size was 156 acres.

After more than a century of intensive exploitation, West Virginia still has abundant natural resources. In 2021 West Virginia ranked fifth among states in total energy production, producing 5,497 trillion British thermal units of energy—5.9 percent of the nation’s total. The state’s natural resources include an estimated 55 billion tons of recoverable coal reserves (12 percent of the national total). In 2022, West Virginia increased its natural gas production by 6 percent to 2.8 trillion cubic feet, ranking it seventh nationally. It has the third most natural gas reserves. It has eight million barrels of crude oil reserves and 12.5 million acres of timberland (79 percent of the state), much of it hardwoods suitable for the lumber industry. Although the chemical industry has declined significantly since the 1980s and especially in the 21st century, major plants are still concentrated in the Ohio and Kanawha valleys. There are steel manufacturing facilities in the Northern Panhandle and Huntington.

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 44,000 miles of public roadway include six interstate routes. Of the state’s 24 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.

Compared to other states, West Virginia has made slow progress in developing its telecommunications infrastructure. Only about 100,000 West Virginians (5.2 percent) have fiber-optic access, the worst rate in the nation. Only 65.8 percent of West Virginians have access rate to broadband, with average download speed of 51.3 MBs per second. The dominant telecommunications company is Frontier Communications, which provides telephone and related services to more than 90 percent of the state’s population. In 2022, Frontier emerged from bankruptcy and was ordered by the state Public Service Commission to upgrade its phone and broadband services significantly. As part of the agreement, Frontier has agreed to spend $50 million per year to deploy fiber high-speed internet to at least 150,000 additional locations in the state by the end of 2027.

Tourism is a growing industry, featuring 36 state parks, eight state forests, four Alpine and four Nordic ski areas, whitewater rafting, and other attractions, such as the world-famous Greenbrier resort in 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 and second-home owners.

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 2022, 17.9 percent of West Virginians were below the poverty level, compared with 11.5 percent nationally, ranking 48th in the nation just ahead of Mississippi and Louisiana).

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 0.9 percent per year during the five-year period ending in 2026—below the expected national rate of 1.4 percent per year. Job growth in mining is expected to slow as domestic power plants increasingly turn from coal to natural gas as a fuel source. West Virginia’s natural gas production, on the other hand, has seen annual double-digit increases since 2016. Construction and manufacturing jobs are expected to demonstrate mixed results. However, economic subsectors such as aerospace, automotive equipment, and food/beverage service are expected to grow more rapidly. WVU’s 20222 annual economic outlook report predicts, “A positive shock to encourage in-migration is essential to lessen the severity of natural population decline. Economic development strategies should focus on ways to improve health outcomes, lower drug abuse, and advance educational and vocational training opportunities in the state to make West Virginia’s workforce more attractive to potential businesses.” The report also cautions state leaders to “be keenly aware of significant economic differences across West Virginia and ensure that economic development strategies consider each region’s specific strengths and weaknesses.”

The COVID-19 pandemic (2020-2023) had a significant impact on the economy as the unemployment rate grew to 16 percent by April 2020. The energy sector was particularly hard hit as payrolls fell by more than 20 percent in the coal and natural gas industries compared with a year earlier. These jobs have returned, with the unemployment rate at 4.0 percent in late 2023, although the previously noted shift by power plants from coal to natural gas will make mining employment more challenging.

In coming years, contract labor is expected to rise, as are professional careers in education and health services. So are jobs in legal and management consulting businesses, particularly in relation to the natural gas industry. Retail sales and government sector jobs are predicted to suffer significant declines.

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 November 22, 2023


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

Cite This Article

Sonis, Larry and George Hohmann "The Economy." e-WV: The West Virginia Encyclopedia. 22 November 2023. Web. 27 May 2024.


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