Southwest Virginia Job loses 2010-2020.
Southwest Virginia Job loses 2010-2020.

Needed Political Reforms Before Ending Poverty in Southwest Virginia

by Lewis Loflin

The above is the result of crony capitalism and politics. I wrote this circa 2010 and have been proven right.

Southwest Virginia suffers from three primary problems: low literacy rates, national economic policies hostile to labor, and local political dysfunction.

National economic trends are unfavorable to labor. Some estimates place the lowest paying retail-service jobs at 24% of the employer base in Southwest Virginia.

United Way in 2018 estimated 51% of the population of Southwest Virginia doesn't earn enough to live decently.

Too many "small businesses," sometimes underwritten by corporate welfare, provide low-paying, unstable employment. Industrial development often ends up being retail stores, and a "technology job" is often a low-paying call center.

Much of Southwest Virginia has an excellent fiber-optic network primarily funded by the government. It has helped some, but the economic renaissance they promised failed to materialize.

Even a $2.2 billion state IT contractor located in Russell County, Virginia, could not produce reliable employment. The County awarded them a $9 million local incentive package.

The 1,000 new "hi-tech" jobs dwindled to less than 20. Those IT jobs, I understand, got outsourced to India instead. They located a company in the community with incentives that specialized in outsourcing IT jobs to India! One can't make this up.

See How CGI-AMS and Northrop Grumman Failed Russell County.

Don't worry about hating your customer service job; it will close and relocate in a few short years. Despite plowing tens of millions of public dollars into "information" related jobs, numbers employed fell by 45% from 2010-20.

Call centers are popular with employers to outsource jobs to reduce labor costs. The heavy use of public subsidies to assist outsourcing firms makes the government a partner in job destruction, lowering wages across entire industries.

Tens of millions plowed into tourism development saw a 20% decline from 2010-20. This pork-barrel waste included a $20 million "Artisan" center in Abingdon, Virginia. It has produced nothing in over a decade. They plan to spend another $2 million on the same thing in 2022.

Working people in Southwest Virginia depend on earned income, not investment income, with overreliance on transfer payments and government jobs. This overreliance makes political corruption a critical issue.

The massive losses in mining, construction, and manufacturing once provided suitable employment for those without advanced degrees.

This economic destruction creates many other social problems, from affording a car to childcare. The lack of decent jobs allows low-wage employers to abuse their workforce.

Pork-barrel waste and corporate socialism.
Pork-barrel waste and corporate socialism.

Through the Chamber of Commerce, local businesses conspire to keep pay scales "competitive," keep out unions, oppose any form of worker protection, overuse of abusive temp agencies, etc.

So-called county economic developers have stated their primary job is protecting existing businesses. Some have given up totally, preferring to seek more stable government contractors.

As I was informed by a government agency hack, "Business doesn't give a damn about your skills, education or experience. We are here a assist business, period."

I live in Washington County, Virginia. The County government says this is about economic development:

"Economic development does not necessarily mean growth, although the growth of both population and revenue may be a result. Economic development means strengthening the community's economic base or the part of the local economy that brings in money from outside the county."

Poverty rates Southwest Virginia.
Poverty rates Southwest Virginia.

We know where those government grants get "funneled" to.

In all fairness, even with our class warfare system, national economic trends heavily impact any job creation.

The largest employers in many counties are the county government and school system, local hospitals (nearly 80% government-funded via Medicare/Medicaid), and Wal-Mart.

Who in their right mind gives a $100 million incentive package to a shopping center development centered on a sporting goods store that shut down?

Or a $20 million plus incentive package to a failed coal company knowing the industry is shutting down?

Or a $6 million incentive for a grocery chain to move its corporate offices within the same town?

This was written in 2010. In 2022 we face even more dire economic and labor problems. The following is still valid.

As one regional economic developer pointed out, it's OK to criticize, but what about some solutions? Good question; here is my response. This page is part of a discussion with a regional economic developer, and I believe what is best for these Tobacco and other economic development funds.

My goal is not to give people or business money or a welfare check. And another is to assure poverty doesn't become an industry in itself, producing career-minded people more interested in a paycheck than solving real problems.

The other goal is to weed out freeloaders that deserve nothing. He said it would never go anywhere for those reasons because of political considerations, but here it is anyway.

Reading levels adults 16-74.
Reading levels adults 16-74.

In November 2022, local leaders are excited about possible nuclear power plants in Southwest Virginia. They claim unemployed coal miners can get in on the industry.

This claim is stupid on its face. Besides emptying the trash or a few temporary construction jobs, advanced technical training is impossible with our low literacy rates.

Their real goal is to "funnel" (their words, not mine) $10 million in government grants into the pockets of the usual politically connected insiders.

Ref. "Gov. Youngkin aims to funnel millions into Southwest Virginia for nuclear energy plan" WJHL 11/7/22.

Consultants, contractors, and friends will reap millions, but the public sees nothing as usual. This kind of politics has been a recipe for decades of waste and failure.

If serious about this issue, they must address literacy, particularly math and science. This problem is a national issue.

We can never tackle the skills and academic gaps that cripple this region without addressing local business, social, and political culture.

In the demographic sense, Southwest Virginia is West Virginia - 90% white. We have plenty of good schools and colleges, but we can't retain skilled or educated workers when they graduate.

Our low-wage, abusive business culture drives them out of the region. Why should an IT job pay half the wages in Southwest Virginia than the rest of the state? Then they get a state subsidy to keep doing it.

Politicians and economic developers promote and subsidize this and market it to what few businesses they can bribe to locate here. Then they act confused when the business relocates in the middle of the night to another sucker community.

It is time to put a brake on 30 years of this runaway train wreck.

Halt all government money to economic development (often corporate welfare), social programs, non-profits, etc. Keep all public funds out of the private sector as much as possible and keep it clear of local politics. Sever government totally from local business interests.

Terminate these non-profits and pseudo-government agencies, not create more of them. Republicans want capitalism, then let's have true capitalism, not more corporate socialism.

It is time to halt socializing costs while privatizing profits. Economic development needs to serve the public interest, not an industry to "funnel" government funds into private bank accounts.

Set up a general education fund for the region's residents. Pool all the funds for tourism development, Tobacco grants, etc. into this. Use it as a conditional education grant to send the region's residents to school, redo high school, or community college.

Before any vocational classes or community college, the focus must be on general education, particularly in high school math, applied science, and English.

It's open to anyone in the general public, regardless of income, and must be in the workforce or are employable.

The program is voluntary and pays only for books and tuition, and continuing funding for the individual depends on completing a class before they go to the next. The student must be held accountable; if they fail to perform, they are out. Pay for this through a 2-year degree.

Use existing high schools, community colleges, empty shell buildings, etc. There are plenty of volunteers willing to help. These must be public institutions, not another private diploma mill. Don't create another government-funded industry.

I have taught at a local community college. I was dealing with adult students that can't move a decimal point. Good job training is a struggle without basic skills.

If a student has a job, they can come to improve their skills. This opportunity would be a plus for an established business that needs a better high school graduate. They often use this claim as an excuse for their low pay scales.

This system would weed out those unwilling to put forth an effort and directly reward those willing to strive for it.

If an employer is willing to commit to hiring people from college or vocational programs, I'd be willing to give them some compensation or a tax break.

But only if they hire them and pay at least $5 an hour above minimum wage, not the $2 an hour average now, to start and keep the worker for one year.

The company must agree not to use temp workers or illegal aliens.

They get it at the end, not before. The program bars illegal aliens and enforces immigration laws.

We can also set up a fund to assist those wishing to relocate for employment reasons to leave the region.

This option is better than leaving them trapped here on welfare. Either the private sector starts hiring the people they claim they can't get, or they can just shut up.

I worked with one local business (they paid for it) to improve their workforce skills in basic electricity. It worked well. Beyond that, the taxpayer owes them nothing.

Residents and businesses must stand on their own two feet. Get a job, starve, or relocate. End the corporate welfare and pork-barrel waste.


Lewis Loflin


Lewis Frog

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