Economic Development: the Best Welfare

Many Virginians still think of Virginia’s six coalfield counties in far Southwest Virginia as a bastion of unemployment and poverty in an otherwise robust state economy. The stereotype was true as recently as 10 years ago, but it no longer applies. As Rex Bowman writes for the Times-Dispatch, unemployment levels have reached lows not seen in decades — since the coal boom of the 1970s — and welfare roles are down dramatically. The key: Former Gov. George Allen’s welfare reform and well-funded regional economic development programs.

A rebound in the coal economy has helped the economy somewhat, but the main credit for job creation goes to sustained efforts to diversify the region’s industry base. Unemployment in Dickenson County, which stood at 14.2 percent in 1997, has fallen to 5.2 percent. The changes have been almost as dramatic in Wise and Buchanan Counties, the other two jurisdictions where coal mining once constituted an economic monoculture.

Said Gary Hale, manager of the Virginia Employment Commission in Norton: “I’ve got more jobs available than I’ve got people to fill them, and I never thought I’d say that.”

While job creation has been critical, so have sustained efforts to break the culture of welfare dependency. Bowman describes the strategems to ease the difficult transition from welfare to work. For the coalfield region, the number of people on welfare has declined from 6,o61 a decade ago to 3,614 today — a decline of 48 percent, compared to 43 percent for the state as a whole.

Statewide, the decline in welfare roles is saving the federal and state governments $957 million a year. But the benefit of reviving peoples’ independence and pride is incalculable. Kudos to the Times-Dispatch for highlighting this success story.

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4 responses to “Economic Development: the Best Welfare”

  1. Larry Gross Avatar
    Larry Gross

    well, jobs don’t mysteriously appear.

    Good article and sounds like good stuff going on but people don’t get off of welfare and become an office manager because they no longer want to be on welfare.

    that office manager job has got to exist and that means that come company is there that did not used to be, providing that job and other jobs.

    So.. the article spent many words talking about the process of getting folks prepared to be able to work (learn computers, etc) but I did not see much about what has changed to provide the jobs..

    what are the new jobs and why are those new jobs there?

    last I heard, government grants don’t actually create jobs (well.., not many, I hope)… so what did Virginia do to bring new jobs?

    that’s the story I want to read.

  2. Anonymous Avatar

    Government grants don’t actually create jobs, and neither do government mandates to build environmental widgets: and for pretty much the same reasons.


  3. Larry Gross Avatar
    Larry Gross

    you mean all those folks making air bags for cars are not working real jobs making real money – because the government mandated air bags?

    or those advanced sewage treatment plants that remove more and more nitrogen and other contaminates so we get cleaner water?

    those are not real jobs either?

    isn’t it true than manufacturing widgets in general provides jobs?

    just because a widget is mandated by the government doesn’t mean it does not provide a job…


    now.. if you want to argue whether or not it is a “needed” widget.. we could also discuss the merits of say.. porn magazines or cigarettes … or ATV widgets.. right?

  4. Anonymous Avatar

    It is true than manufacturing widgets in general provides jobs, The question is whether they provide more jobs than they destroy, and/or whether people in general are better off.

    Manufacturing widgets could destroy more jobs than they create, and people in general could be better off. If the widget jobs pay enough that we can then contribute enough to public welfare to support those who are out of work, then the widgets are a good thing.

    Unless you are the guy on welfare.

    I never met anyone who was saved by an airbag who complained about the cost. Be that as it may, air bags are a hot item in the hot car parts market. Just remember, the reason the government mandated air bags was to put emergency room personnell out of work. Since Toyota will probably top GM this year, a lot of those air bag jobs are overseas. You do the math.

    Since 1990 NHTS has recorded 175 fatalities as a result of air bag deployment. More than 3.3 million airbags have deployed and they are credited with saving 6,377 lives. That means the airbag you paid $800for has a 2.5% chance of killing you, compared to the chance that it will save you.

    There are 15 million cars and trucks sold evey year, many with multiple airbags. If an aibag is $800 then we have spent $204 billion on aibags since 1990 to save 6377 lives.

    Almost $32 million per person.

    On a probable cost basis we spent almost $800,000 for every person the airbags killed.

    I’m a cautious person, so I don’t mind paying the $800. That doesn’t prevent me from thinking there are’nt better wasys to spend money saving lives. Maybe, with that kind of money being invested we should have a strong law concerning recycling of these expensive and rarely used items.

    (I pulled the $800 dollar figure out of thin air, I think it was what someone told me it cost to replace one that was stolen. In mass peroduction the costs might be lower)

    “In 1977 NHTSA claimed that an air bag alone would reduce an occupant’s fatality risk 40 percent in all crash modes combined and 65 percent in frontal collisions where airbags work best. NHTSA’s latest study, released August 1996, indicates that the figures are 13 percent and 34 percent respectively. Lap-shoulder belts, on the other hand, are 45 percent effective overall.

    The air bag mandate began as an attempt to override individual choices regarding seat belts. To many people it represented the height of paternalistic government…”

    Sam Kazman
    General Counsel, Competitive Enterprise Institute

    I don’t know if Sam’s figures are correct. I don’t know what cost benefit analyses were done before this started. I don’t know what value of a single life figure was used in those computations, but I seriously doubt it was $32 million per person.

    The question in my mind is whether there is some other way to spend $208 billion dollars ( or half of that or a quarter of that) that might have saved as many people, put more jobs in the U.S., and sent a lot less valuable hardware to the dump. If there is, then air bags were a bad investment by comparison, and they cost more jobs than might have been created otherwise.

    Just because they create jobs, doesn’t mean it’s necessarily a good deal.

    I still want my air bag. But, if they were not available, I could get a four point racing harness that would do as well or better, for a lot less money.


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