West Virginia Executive Spring/Summer 2020 | Page 25

740
720
700
680
660
640
620
Total employment, thousands
2015
V-shaped
W-shaped
�-shaped
L-shaped
2016
Potential Recovery Scenarios for West Virginia
2017
2018
However, the job loss in West Virginia wasn’t quite as severe
as what occurred nationally, which was about a 14 percent
decline. Losses in the neighboring states of Kentucky, Ohio and
Pennsylvania were even larger in percentage terms.
On a more positive note, between mid-April and mid-May, the
Mountain State added back 13,000—or 2 percent—of those lost
jobs. This bounce back was on par with what was observed
nationally, and West Virginia leadership eagerly awaits jobs numbers
over the coming months to hopefully show further progress.
Unsurprisingly, the leisure and hospitality sector was the
hardest hit. This sector in West Virginia lost more than half of
its jobs during the period of mid-February through mid-April.
While all industrial supersectors in West Virginia lost jobs over
this period, after leisure and hospitality, losses were most severe
in the retail trade and health sectors. While certain parts of
the health care sector were busy due to the virus itself, many
normally occurring activities like elective hospital procedures
and dental cleanings were completely shut down in order to
limit the spread of infection.
The unemployment rate has moved in a similar fashion.
The rate was just below 5 percent in West Virginia before the
shutdown began. It skyrocketed to around 16 percent for the
April reading but had already fallen back to 13 percent in May.
Prior to the coronavirus, it would have been hard to imagine
a 13 percent unemployment rate being positive.
In a similar vein, continuing unemployment insurance claims
in the state exploded to more than 146,000 in the state around
mid-April, but another encouraging sign is that the figure had
fallen to just over half that level by mid-June. However, these
figures—which are in the low- to mid-70,000 range—are
double the level observed at the height of the Great Recession.
We can be optimistic that we may be able to enjoy a V-shaped
recovery, meaning the recovery will be quick, but this assumes
a steady decline of COVID-19 cases. In addition, the longer it
takes for the economy to recover, the more lasting damage will
be inflicted on the underlying economy. We have not yet observed
signs of widespread underlying damage like cascading bankruptcy
filings and permanent business closures, but these metrics will
be watched closely. If we take longer to overcome the pandemic,
our recovery may look more like a check mark. Alternatively, if
we see a second shutdown this fall or winter, we may be thrust
2019
2020
2021
2022
2023
Source: Bureau of Business & Economic Research
Editor’s Note: This article reflects some
of the effects of the coronavirus pandemic
on West Virginia’s economy as of June
2020. It is not a comprehensive account
of corona virus activity or its entire impact
on the state. At the time of publication,
the number of confirmed coronavirus
cases in the Mountain State continued
to rise. However, the staff at West Virginia
Executive reached out to John Deskins
to provide its readers a snapshot of how
the pandemic has changed the state’s
economy and business community and
offer hope for recovery.
back to April lows, giving us a W-shaped recovery. It is simply
too early to tell given the unique nature of this situation.
On a positive note, some potential opportunities have emerged
during this crisis. One of the most promising is the possibility
that we can attract remote workers to West Virginia. There
was a push to more remote work—especially among several
big tech companies—even before the crisis. The shutdown may
greatly accelerate this transition. With our fantastic outdoor
opportunities, low cost of living and other positive attributes,
we have the potential to bring people into our state to enjoy
our quality of life while working from anywhere. •
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