I want you to close your eyes and try to guess the place I’m about to describe.
Wait — never mind. That’s probably not a good idea. I always try to envision I’m in a conversation with readers, so I sometimes forget you’re reading this and not looking back at me through the screen.
Let’s try this, then. I’m going to describe a place, and you try to guess what part of Virginia it is (unless the headline has already given it away).
There’s a part of the state where wage growth has typically lagged behind the state and national averages, but where since the pandemic wages have been growing faster than either of those — and at last report, are growing three times faster than the national rate.
Furthermore, the jobs most frequently added in this part of the state pay higher wages than the median household income in that part of the state.
What is this part of Virginia where, based on these statistics, the economy seems to be booming?
It may not be the one you expect. It’s the westernmost corner of Virginia, specifically the part of Southwest Virginia drawn into GO Virginia Region 1 for economic development purposes. Draw a line through Bland County, Wythe County and Carroll County, and it’s them and everything west to the Cumberland Gap.
This is a part of Virginia that’s more accustomed to hearing bad economic news, but some — not all, but some — of the data that Richmond economist Christine Chmura presented last week at the Southwest Virginia Economic Forum at the University of Virginia’s College at Wise was quite encouraging. (Disclosure: I was the closing speaker for the event but received no pay for speaking. If your group needs a speaker, I’m available.)
When dealing with economic statistics, almost everything comes with nuance and context; the data Chmura presented is no different.
Average annual wages in GO Virginia Region 1 are typically about 33% lower than the state and the nation, Chmura said. For Virginia: $63,834. For the U.S.: $63,771. For that part of Southwest Virginia: $48,855. (I say “that part of Southwest Virginia” because one of the best ways to start an argument west of the Blue Ridge is to start defining the eastern and northern limits of Southwest Virginia. I’ll make that the subject of a future column, but for today we’ll focus on Chmura’s stats for GO Virginia Region 1, which leaves out some places that also consider themselves part of Southwest Virginia, such as Pulaski County and Floyd County.)
On the other hand, the cost of living in the westernmost part of Virginia is lower, too — about 15.7% lower than the national average. That lower cost of living doesn’t fully mitigate the lower wages, but it does help.
From 2011 through 2021, wage increases in the westernmost part of Virginia also trailed Virginia and the nation. In 2020, for instance, Virginia wages grew by 7.7% and national wages grew by 7.6%, while wages in that part of Virginia grew by just 3.9%. The phrase “the rich get richer” seems to apply here.
However, since early 2022 — basically, since the end of the pandemic — average annual wages in GO Virginia Region 1 have been growing at a much higher rate than the state or nation:
As you can see in the chart above, at one point wage growth in that part of Virginia was running about 8%. Through the first quarter of 2023, it was 5.9%, while the state increase was 3.6% and the national increase was 2.6%.
Southwest legislators emphasize need to attract tech jobs
The legislators who addressed the forum — all Republicans, all of whom would surely come under the category as “Friends of Coal” — also had a message that often isn’t heard outside the region. “We’ve always hitched our wagon to 50-years-ago technology and industries,” said state Sen. Travis Hackworth, R-Tazewell County. That needs to change, he and others said.
Hackworth and Del. Terry Kilgore, R-Scott County, both talked up the need to attract data centers.
Hackworth said he’d been talking to state Sen. Danica Roem, D-Manassas and a fierce critic of data centers, about trying to redirect their growth from Northern Virginia to Southwest Virginia. “She is wanting to come down because she hates data centers in Prince William County,” Hackworth said. “I said come on down, we’d love to have them.”
Kilgore also emphasized how university-based research can spur economic growth, pointing to the growth around Virginia Tech. “We’ve got to make UVA Wise a research center,” he said. “If we can get those researchers here, we can create jobs out of all those researchers.”
Del. Israel O’Quinn, R-Washington County, made a different point. The region shouldn’t just rely on outside forces to create jobs there. “We need that entrepreneurial spirit,” he said. Whenever he talks to school groups, he said he always asks them what they think their community needs. Then he follows up with: “What are you going to do to fix it?”
Why is that happening?
Primarily because of strong growth in the manufacturing sector (which might represent a renewed interest in “reshoring” some manufacturing after the pandemic showed the vulnerability of global supply chains), and an increase in coal production. The latter may surprise some, but as state Sen. Travis Hackworth, R-Tazewell County, told the gathering: “Coal’s not dying; we’re producing more coal than we’ve ever produced. It’s just with fewer people.”
The Virginia Department of Energy reports that the state’s coal production in 2023 grew by 2%. Why is coal production up when we’re regularly hearing about utilities shutting down their coal-fired plants and switching to natural gas or renewables? Two reasons: First, while the use of coal for energy production has declined in the United States, it has increased elsewhere in the world, particularly in China and India. Last year, coal exports through Hampton Roads reached a five-year high. Second, infrastructure construction in the United States — some of it spurred by the Infrastructure Investment and Jobs Act of 2021, more commonly called the Bipartisan Infrastructure Law — has driven demand for coal because metallurgical coal (as opposed to “steam” coal used for energy) is necessary in steel production. (If you’re a fan of irony, you’ll notice that a bill pushed by Democrats has led to more coal production and more jobs in strongly Republican areas.)
All these jobs pay higher than the median household income in much of the westernmost part of the state. Over the past three years, the job sector adding the most jobs in GO Virginia Region 1 has been manufacturing, with 1,367 new jobs. Those jobs have also averaged $53,745, which is higher than the median household income in 13 of that region’s 16 localities, often substantially so. In most localities in the region, the median household income is less than $50,000, with Buchanan County and Norton coming in lowest at $39,591 and $36,974. Only in Bland County, Wythe County and Washington County would those manufacturing jobs come in lower than the median household income, and then not by much: Wythe is $53,921, Washington is $59,116 and lightly populated Bland is $59,901.
The growth of manufacturing jobs in that part of the state is a big deal, economically speaking.
The growth of coal jobs — while much smaller in number at 366 — is a big deal, too, because those jobs pay an average of $83,229. That highlights one of the problems with the national transition from coal to renewables: Coal jobs pay quite well and are concentrated in a part of the country where those wages are often more than double the local median household income. Solar jobs pay well, too — ZipRecruiter says the average in Virginia is $91,643 — but they’re not geographically concentrated in Appalachia.
The fastest-growing jobs in that GO Virginia region are in the “arts, entertainment and recreation” category — 823 jobs, a 21% increase. Chmura attributed that increase to the opening of the casino in Bristol. However, those jobs pay only an average of $33,082.
This chart shows job growth in the region; the ones in green are the categories adding jobs that pay higher than local averages.
More good news, this time demographically: The state’s Southwest corner is now seeing more people moving in than moving out. Ten of the 16 localites in GO Virginia Region 1 are now experiencing net in-migration. From 2020 to 2023, the total in-migration for the region is a net gain of 1,248. To readers elsewhere in the state, those numbers may seem small — the net in-migration during that time was 2,100 in Bedford County and 19,796 in Chesterfield County — but this represents a historic shift in demographic patterns in the region. This fits in with a larger pattern of net in-migration in rural areas across the country — a Zoom-era migration. Every locality west of Montgomery County, except Galax, is losing population overall; but that’s only because with aging populations, deaths outnumber both births and the net in-migration. “There’s a rural renaissance going on,” Gov. Glenn Youngkin told the forum. These statistics show that’s not just cheerleading.
Given the age structure of the region’s population, deaths will continue to drive population loss for years to come, but this new influx of residents offers some hope. These numbers aren’t small, either, in terms of their local impact. In Galax, a net in-migration of 233 people represents 3.4% of the city’s population. That’s a bigger percentage than the 2.6% that net in-migration represents in Bedford County, and within sight of the 5.1% that net in-migration accounts for in Chesterfield County.
None of this should be read as evidence that every economic (or demographic) challenge facing the region is solved. Far from it. However, these stats do show how much things are changing, and how reality is often not the same as perception.
In this week’s West of the Capital:
I write a free weekly political newsletter, West of the Capital, that goes out every Friday afternoon at 3 p.m. You can sign up here:
This week I’ll have updates on some of the primaries on the ballot on June 18, plus other news.
