LEIGH SALES, PRESENTER: Recently in the United States, there was finally a bit of good economic news with unemployment dropping to its lowest level in more than two and half years. But overall, the economy remains in a slump and some parts of the country have been particularly hard hit.

A recent poll shows almost every American state is pessimistic about the future, but the bleakest outlook of all is in West Virginia.

North America correspondent Michael Brissenden went to find out why.

MICHAEL BRISSENDEN, REPORTER: Few places in America know economic hardship quite like West Virginia. Here in McDowell County in particular, hardship and struggle have been the songlines for generations.

ALAN JOHNSTON: My grandmother on my daddy's side was a musician. She played banjo (inaudible). And my dad was a ribbon-winning old-time fiddler in this area.

MICHAEL BRISSENDEN: Like a lot of people here, Alan Johnston's family have music in their blood, but coal dust in their lungs.

ALAN JOHNSTON: My dad he worked in the mines for 20-some years and then he got so bad off he had to come out of the mines. He got silicosis in his lungs and black lung and they had to remove one of his lungs as a matter of fact. My brother, he worked in the mines. His name's Clayton. And he got his disability in - he's in his early '70s now, but his health is shot.

MICHAEL BRISSENDEN: West Virginia was built on coal. From the early 1900s until the 1960s, a coal rush filled the valleys or hollers, as they're called around here, with jobs. These were tough people and coal mining was tough work, but it's been even tougher without it.

JOHN FANNING, WEST VIRGINIA SENATOR: I think the loss of population is the biggest problem. Up and down this hollow here and in the area around Welchinaw (phonetic spelling), we had 100,000 people. We had bookos (phonetic spelling) of stores. We had at one time 13 car dealerships in this county. We have none today.

MICHAEL BRISSENDEN: State Senator John Fanning is a long-time local. This part of West Virginia has unique problems, he says, but America as a whole should be better at protecting itself.

JOHN FANNING: We have outsourced our jobs. Where do we have anything made in the United States or where do we have anything made in West Virginia? It's not only McDowell County, it's not only West Virginia, it's the United States of America. Jobs.

MICHAEL BRISSENDEN: When he's not engaged in state politics, John Fanning at least has one of the few thriving businesses in his dying town. His family have been the undertakers here for the past 80 years.

JOHN FANNING: We are a county of old people, so the funeral business still prosperous because we're dealing in older people. This is a nice place to live, but it doesn't provide a lot of the necessities that young people need.

MICHAEL BRISSENDEN: And many of the young people who have stayed have been trapped in a downward spiral of unemployment and addiction.

BRYAN: There ain't no opportunities. Cheque, food stamps, drugs - that's about it.

LOCAL WOMAN: This place is really awful, it really is.

BRYAN: There ain't nothing to do.

MICHAEL BRISSENDEN: McDowell County has some of the highest poverty rates, lowest education levels and biggest drug problems of anywhere outside of America's big cities. The urban ghettos are mostly home to a black underclass. Out here it's white.

Today just a few hundred metres from the Fanning funeral home, Brian and his friends are busy stripping one of the empty buildings of almost anything of value.

BRYAN: All my life I've been on drugs.

MICHAEL BRISSENDEN: And that's a big - I mean, a lot of people on that round here?

BRYAN: Everything you see round here's on drugs.

LOCAL WOMAN: I've got a 13-year-old son; he's locked up.

MICHAEL BRISSENDEN: What did your parents do?

BRYAN: Coal miners and nurses. You know what I mean? That's about it. Now you gotta have a college education and all that. I guess we was left back in the pack.

MICHAEL BRISSENDEN: It's not difficult to see why this would be a place with a less-than-positive view of the future. The last 50 years has been tough on West Virginia. But that bleak outlook has bred a black humour, and as they like to say around here, this is one of the few places in the United States that's hardly felt the effects of the current great recession.

JEAN BATTLO, WRITER: We've been down so long it looks like up to us - you know that saying? Actually, psychologically, socially, I don't feel personally that we're feeling the nation's economic crunch the way others have because we've already been there, we're already there.

MICHAEL BRISSENDEN: For all that, Jean Battlo is working to try to at least zero of a future. She's one of those who believes a mix of tourism and history can help preserve what's left of these small communities. The local writer has established a community arts business and has been trying to interest local political leaders in developing a historical coal theme park.

JEAN BATTLO: There are some really innovative people here - I like to think I'm one of 'em - that is trying to make some difference.

MICHAEL BRISSENDEN: There might not be too many jobs in coal anymore, but history is one thing they still have plenty of up these hollows. The other thing of course is music.

ALAN JOHNSTON: My friends that I've met on the internet that live in other places, they say it must be very cool to live in a place that people write so many songs about, and they say, "You know, nobody's ever made a story or made a - written a song about where I live," you know. And so they - a lot of people wanna come here and see this place, you know, that people sit down and write songs about. I can understand why they would.

JOHN FANNING: (Singing) If you go to Sinnebottom (phonetic spelling), put your money in your shoes, 'cause the women in black bottom got them black bottom blues. Ha! Don't you show that to nobody!

LEIGH SALES: Guess they weren't listening there! Michael Brissenden reporting from West Virginia.