• Key challenges include a lack of qualified workers, child care affordability, and the state’s business inventory tax, which some say hinders growth.

“West Virginia has … the second-lowest workforce participation rate in the country … hovering at about 54.9% of eligible people in the workforce,” said Brian Dayton, West Virginia Chamber of Commerce vice president of policy and advocacy.

Low workforce participation challenges the expansion of current businesses and the establishment of new businesses. Without qualified workers, businesses are unable to operate at maximum efficiency or grow.

The cause of the state’s low participation is multi-pronged, and so the solution to building participation up should be, too, Dayton said.

A focus on career development in both K-12 and higher education is needed to create a more hirable workforce, he said.

For years, graduating with a bachelor’s degree from a university was seen as a prerequisite for a good-paying job. But in West Virginia, many industries need employees who’ve been to two-year trade or vocational schools.

There are also several thousand job openings in West Virginia that, due to the low workforce, participation continue to be unfilled, said West Virginia Manufacturers Association President Bill Bissett.

A centralized “warehouse” or database of workforce development programs would be an invaluable source of information to businesses around the state and remove impediments to employees receiving gainful employment, Bissett said.

Affordable child care is another barrier for increased workforce participation. Many young families opt for one parent to stay at home instead of returning to work as child care costs more than their monthly salary.

“Over 75% of our members have identified the lack of child care and the affordability of child care as one of the major impediments to their business growth,” Dayton said.

The cycle is self perpetuating. Workforce issues have also struck at the availability of child care.

Last year, Cubbies in Bridgeport had a waitlist of over 400 children, but closed numerous classrooms because there was trouble staffing them, Dayton said.

Because of this, Dayton said, he’s also interested in seeing if it would be possible to subsidize child care workers by covering education costs.

Another way to attract businesses to the state, Bissett said, is to remove the state’s business inventory tax, which assesses fees based on materials a business owns but has not yet made money on.

“To pay a tax on that really is destructive to the bottom line and economic health of a company. If you’re an economic developer in Ohio, you’re making sure that a company competing to land here in West Virginia knows about the business and inventory tax,” Bissett said.

Continuing to support tourism is another way Bissett said the state’s attractiveness to workers and companies can be bolstered.

Because of a forecast budget shortfall, Gov. Morrisey has talked about consolidating the the Department of Tourism with the Department of Arts, Culture and History, the Department of Commerce and the Department of Economic Development.

This has led some to believe cuts to tourism efforts could be coming. Bissett said this would be detrimental to attracting new residents and businesses to the Mountain State.

“Tourism is the way a lot of people learn about West Virginia initially — whether you’re here for whitewater rafting or visiting the Greenbrier … it may be a tourism visit that starts their understanding that this is a great place to live. So reducing tourism(‘s budget) has an economic effect,” he said.

The future of artificial intelligence technology, and West Virginia’s ability to power it, may be one way industry could address the budget shortfall.

Currently, the oil and gas industry is responsible for injecting about $800 million into the budget via severance and property taxes, said West Virginia Oil and Gas Association President Charlie Burd.

By increasing production of oil and gas to supply power to data centers developing large language models around the country and those potentially built locally, West Virginia could increase its generation of severance and property tax revenues.

“Electrons are the new currency of economic development,” Burd said.

To further increase the impact of locally produced energy, Burd said he hoped the Legislature would work to support gas-fired power plant projects.

“The legislature understands the need of power production if they are to attract these large job creating, energy consuming new business development opportunities,” he said. “Our industry wants to develop a natural gas power generation infrastructure in this state.