Blog Posts > Government Job Losses Are Weakening West Virginia’s Recovery
July 1, 2020

Government Job Losses Are Weakening West Virginia’s Recovery

West Virginia added 13,300 jobs in May, welcome news after losing 92,000 jobs in April as the state struggled with the economic impact of the COVID-19 pandemic. However, as food service, health care, and other private sector jobs saw modest gains after April’s massive losses, state and local government jobs continued to decline, partially offsetting the private sector’s gains.

West Virginia lost 13 percent of its total nonfarm jobs in April, with women, Black, and young workers hit particularly hard. As the state began to reopen in May, some workers were able to go back to work, but not all. West Virginia has gained back only 14.1 percent of the jobs it lost since February.

Source: WVCBP analysis of Bureau of Labor Statistics, Current Employment Statistics data

The majority of the jobs gained in May came in accommodation and food services, construction, and health care. The gains were modest compared to April’s losses, and overall job losses since February are still huge. For example, while West Virginia added 8,100 accommodation and food service jobs in May, the state is still down 25,900 jobs, or 39 percent, since February.

The economic gains from the recovered jobs were also partially offset by loss of jobs in the public sector. As tax revenues dropped dramatically due to business closures and layoffs, state and local governments began reducing their workforces. West Virginia lost 9,500 state and local government jobs in April, and another 2,900 in May, for a total loss of 12,000 jobs since February.

With revenue losses expected to continue, more job losses and subsequent cuts to services, could be on the way. These cuts not only harm families, but are delaying the economy’s recovery. And while May’s modest job gains were in part due to reopening the economy, they were also a result of federal aid measures that passed, including the stimulus payments and enhanced unemployment benefits in the CARES Act.

With the effects of the stimulus payments already behind us and the increased unemployment benefits set to expire July 31, that aid is now coming to an end, even as COVID-19 cases are increasing and layoffs are continuing.

Unless federal policymakers provide more help, states and localities will be forced to make even deeper cuts as they rewrite their budgets. Before that happens, federal policymakers should build on the state and local aid that the CARES Act provided, ideally by modeling their additional aid largely on what’s included in the House-passed Heroes Act.

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