The Tripping Point

In the Spring 2007 issue of Capacity Magazine, Congressman Alan Mollohan wrote an article entitled West Virginia’s Economy, has reached the all-important ‘tipping point.’ The congressman states, “In any complex system, a tipping point-that moment when an accumulation of small, easily overlooked changes creates a sudden shift in the dynamics of the overall system-is often hard to see coming but blindingly obvious in retrospect.” I’ll agree with the congressman on the definition of ‘tipping point,’ but will strongly disagree that we are even close to one in the West Virginia Economy.

Those small easily overlooked changes can make a difference in the states economy, but not when you ignore the huge ones staring you in the face. We need judicial reform to prevent the frivolous lawsuits. We need cut our business taxes from the 7th highest in the nation. We need to lower the states workman’s comp rates and we need to streamline the environmental permits process. All of these items combine to make it expensive to do business in West Virginia, and many businesses believe it to expensive, so they go elsewhere.

We need to look back to the ‘tripping point.’ That is the moment when we began to fall, and that was the 1950’s. In the 1950’s West Virginia had a strong economy and a population of 2 million. The blindingly obvious retrospective is; at that time our legal system was fair, we had low corporate taxes, and easy permitting processes for all kinds of businesses. There is no rocket science here, businesses need low cost of operation to be competitive. Those cost rose in West Virginia from the 1950’s forward and the businesses left to areas with lower cost to remain competitive.

That population of 2 million in 1950 is now down to 1.8 million. People see us loosing 200,000 in population from 1950 to present, but that is not an accurate analysis of the data. In 1950 the US population was 154 million; today the US population is 300 million. If West Virginia had experienced the same growth rate the US did then West Virginia’s population would be 3.8 million. That is 2 million missing West Virginians not contributing to the West Virginia economy. It is time we learn from the mistakes of the past 50 plus years, and make the big fixes that will give us a true tipping point.