Looking past vote, U.S. coal country sees millennials as key to revival

[November 03, 2016]  By Valerie Volcovici

HUNTINGTON, WV (Reuters) - When Carissa Sellards talks to her West Virginia University friends about post-graduation plans, one dilemma keeps coming up – whether to stay in their home state or strike out for more promising opportunities elsewhere.

If recent history holds, over half of them will either not find work or leave the state, contributing to a brain drain of young talent that is pushing the state to try to reinvent its economy and break with a coal industry in long-term decline.

"Companies don’t come here to invest because they only associate us with coal," said Sellards, a 20-year-old sophomore who addressed the state legislature when she was in high school about the lack of opportunities for young people in a post-coal economy.

The often stark choices faced by Sellards and other young, educated West Virginians underline the challenges awaiting Democratic candidate Hillary Clinton here and in other “Rust Belt” states if she wins the Nov. 8 election, as most polls suggest she will.

West Virginia is expected to vote decisively for Republican Donald Trump, who has gained in recent polls and promises to revive the coal industry and put miners back to work by easing environmental restrictions and renegotiating trade deals to America’s advantage. It is a message that has resonated with millions of older voters in other Rust Belt states facing declines in manufacturing jobs and feeling threatened by foreign competition.

 But it largely rings hollow for college-educated millennials like Sellards, who are seeking jobs in the service economy or technology sector.

By contrast, Clinton alienated swathes of West Virginia voters by saying earlier this year that “we’re going to put a lot of coal miners and coal companies out of business” in transitioning to cleaner energy. Coal industry backers have long accused President Barack Obama of waging a “war on coal” by imposing tougher environmental standards.

Clinton later apologized for her comment, and has proposed a $30 billion plan to help revitalize coal communities. The plan promises to secure health benefits for former coal workers, invest in new infrastructure such as broadband access, and repurpose old mines and power plant sites.

Clinton energy adviser Trevor Houser has said her challenge will be to help coal and other Rust Belt communities deal with economic realities rather than "false promises" of restoring dying industries.

Beneath the nostalgic coal rhetoric, West Virginia officials and grassroots groups have quietly started to focus on reversing the flight of college-educated millennials to help drive an economic revival.

Of the 124,358 students who graduated from public higher education in West Virginia in the last decade, 58,730 were working in the state in 2014, a work participation rate of 47.2 percent, according to a report released by West Virginia University's Bureau of Business and Economic Research on Monday.

The state had the 11th biggest net outflow of college degree holders from 2007-2014, according to the most recent U.S. census.

One barrier to keeping graduates in state is a business start-up rate that is the lowest in the country at 5.1 percent in 2014, the most recent year of available data.

A Reuters analysis of national data shows a strong connection between migration patterns of college graduates and local start-up rates: Among the 25 states with start-up rates below the 2014 median of 6.8 percent, 19 saw a net outflow of college grads between 2007 and 2014.

The debate over West Virginia’s economic future comes as its coal production this year hit its lowest level since the 1970s.

West Virginia's energy sector, which includes coal, natural gas production and utilities, account for 17 percent of the state's GDP but only 4 percent of employment. Coal industry employment plunged 53 percent between the fourth quarter of 2011 and the second quarter of 2016, down from nearly 26,000 to just over 12,000.

The government is the state's biggest employer, accounting for 20 percent of jobs, with healthcare a fast-growing sector at 17 percent. In 2014, West Virginia's real GDP grew 0.7 percent from the previous year compared to the national average of 2.2 percent.

The state is one of a few whose population shrank over the past two years, according to the latest national census. By median age it is the second-oldest U.S. state, four years above the national average.

Carissa Sellards, a sophomore at WVU-Charleston, sits at a coffee shop in Charleston, West Virginia, U.S. August 23, 2016. REUTERS/Valerie Volcovici

At the West Virginia University Institute of Technology’s new campus in Beckley, which opened in August, close to some of the state’s coal counties, officials hope to turn the struggling city into an innovation hub.

In addition to offering courses in burgeoning fields like computer science, sustainable tourism and health care, WVU Tech hosts the Launch Lab, a small business incubator that helps budding entrepreneurs bring ideas to fruition.

Joe Carlucci, a small business coach and director of the LaunchLab, said West Virginia is at the start of a long process of reinvention after decades of mourning coal.

“They are prepared to plant that seed and not see the shade of that tree," he said. "They are seeing that we have to change our own story."

FEDERAL SUPPORT

Although Clinton would struggle to regain popularity in Rust Belt states if elected, these regions would have an incentive to work with her administration to tap into federal grants.

West Virginia Republican Congressman Evan Jenkins, a member of the House appropriations committee who represents the state’s southern coal-producing regions, said the state cannot turn down assistance to diversify its economy.

"I want to continue fueling grant-making opportunities to unleash the entrepreneurial spirit and energy of the state’s millennials,” he told Reuters at a ceremony in August in which federal grants were awarded.

But unleashing that spirit will require a significant investment in infrastructure, specifically broadband access, something that local lawmakers ignored when coal was still performing well eight years ago, said Chris Walters, a 30-year old Republican state senator.

Walters is focused on getting legislation passed to expand broadband access throughout the mountainous state, which ranks near the bottom of the list of broadband connectivity, just ahead of Guam and Puerto Rico.

“If we don’t give connectivity to our residents, we aren’t giving them the opportunity to succeed in the global economy,” said Walters.

In state capital Charleston, NGO Generation West Virginia has helped pass legislation to attract young entrepreneurs seeking low-cost alternatives to places like Denver or San Francisco, including a bill to waive business start-up fees to people under 30 and another to allow crowd-funding to help seed new businesses.

Entrepreneurship also extends to industries like agriculture, which state officials see as an opportunity in the state’s rural coal counties.

An entrepreneurship program called the Coalfield Development Corporation won a $2 million grant this year to help train young people from coal counties to run businesses, offering them college classes, life skills and paid apprenticeships.

Ben Gilmer, the 34-year-old director of the corporation's agriculture entrepreneurship program Refresh Appalachia, said part of Clinton's challenge in coal country will be to sell the vision of a future that is unfamiliar.

Small programs like his can offer concrete examples and help ease the transition, he said.

"Politicians take advantage of people’s fear of what comes next," Gilmer said. "But five years from now, we will have examples and that will speak louder than any rhetoric that's out there."

(Reporting By Valerie Volcovici; additional reporting by Howard Schneider; editing by Stuart Grudgings)

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