It’s almost Halloween, a spooky time of year with ghosts, witches, zombies, and unemployment claims data. If you love being scared, check out these bone-chilling charts featuring some ghastly trends on West Virginia’s economic recovery during COVID-19. But be warned, these blood-curdling bars and spine-tingling lines are not for the squeamish.
West Virginia lost 93,900 jobs in March and April, and as of September, has gained back only 53,700 of them. But that’s not the scariest part. Most of those gains occurred in May and June, with the recovery stalling as the summer ended. West Virginia has gained only 4,100 jobs since July, including a loss of 3,000 jobs in September. But even scarier, West Virginia was losing jobs before the pandemic hit. The state lost 17,700 jobs from August 2018 to February 2020.
With tens of thousands of jobs lost, a record-setting number of West Virginians were unemployed this summer. And while the number of unemployment claims has declined from its peak, unemployment is still far above normal levels. For the last week of September, more than 80,000 West Virginians claimed unemployment benefits, including regular state unemployment benefits and the Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) benefits provided through the CARES Act. That is 10 times as many claims as the same week in 2019.
Speaking of the CARES Act, West Virginia’s economy would be a lot scarier without its provisions. In the second quarter of 2020, total personal income in West Virginia grew by 14.2 percent. But almost all of that growth was due to the $1,200 stimulus payments and enhanced unemployment benefits from the CARES Act. Transfer receipts — which includes stimulus checks, unemployment benefits, and other payments from the government — increased by 62.2 percent, while wages and salaries fell by 6.4 percent.
Now the benefits of the CARES Act for individuals are mostly gone, as the $1,200 stimulus payments were a one-time benefit that most people received in April and May, and the $600/week boost to unemployment benefits expired in July. But there remains an urgent need for assistance in West Virginia. For example, food insecurity, measured as the share of households who sometimes or often did not have enough to eat in the past week, is still nearly twice the rate that it was pre-pandemic.
And finally, the massive job and income losses, along with the faltering recovery, have strained the state budget, even with the CARES Act boosting incomes and spending for a time. From April to September, general revenue fund collections were $159 million (6.3 percent) below estimates and $188.2 million (7.3 percent) below last year’s collections. But the scariest part is yet to come. According to the State Budget Office, West Virginia is facing a $170 million budget shortfall in FY 2022, followed by a $157 million shortfall in FY 2023, a $171 million shortfall in FY 2024, and a $164 million shortfall in FY 2025. And all of those shortfalls were projected before the pandemic.
