As more West Virginians became vaccinated and a strong federal response boosted the economy, the Mountain State, along with the nation, has enjoyed a strong economic recovery from the pandemic. However, while the state’s employment rates have recovered, West Virginia has continued to lose population, contributing to its labor force challenges. In recent months, the state has begun to lag behind the nation’s economic growth, and there are longstanding challenges that predate the pandemic which must be addressed in order to sustain a robust economy that benefits workers, families, and the state’s businesses.
While state officials have claimed that West Virginia’s economic recovery can’t simply be “the result of us bouncing back from the pandemic” and is more attributable to policy decisions, the state has largely followed national trends. The state’s unemployment rate tracked along the national unemployment rate throughout the pandemic, and the current rate of 3.7 percent is not statistically significantly different from the national rate of 3.6 percent. And while West Virginia set a state record for its lowest unemployment rate in March, so did 12 other states, with West Virginia’s rate ranking 29th-lowest overall.
One limitation of the unemployment rate is that it does not account for workers who have abandoned the effort to find work and have left the labor force altogether. But two other measures of labor force strength, while not setting records, are back to their pre-pandemic levels or better. Before the pandemic, West Virginia’s employment to population ratio was around 52.0 percent, meaning that on average, 52.0 percent of the working age civilian noninstitutional population was employed in a given month. During the worst of the pandemic, the state’s employment to population ratio dropped all the way down to 44.6 percent, but as of March 2022, is at 53.0 percent – back above its pre-pandemic rate.
The same is true of the state’s labor force participation rate, or the share of the working age civilian noninstitutional population that is either employed or looking for work. Prior to the pandemic, the state’s labor force participation rate was around 55.0 percent. During the pandemic it fell to 52.7 percent, but has since recovered and is currently back at 55.0 percent.
Despite record-low unemployment rates and fully recovered employment and labor force participation rates, West Virginia is still down 24,300 jobs from its pre-pandemic level, according to WorkForce West Virginia’s and the Bureau of Labor Statistics’ Current Employment Statistics establishment survey. And not only is the state still in a sizable jobs hole, the pace of growth has slowed in recent months. After matching national jobs growth in the months after the initial downturn, West Virginia has started to lag behind the nation. Over the past 12 months, West Virginia’s nonfarm employment growth of 1.7 percent ranks 49th among the 50 states and D.C.
With a considerable jobs gap remaining, Governor Justice has pursued some misguided initiatives to “get people back to work.” After prematurely ending enhanced unemployment benefits failed to decrease unemployment claims or boost employment, Governor Justice implemented the “Jobs Jumpstart Program,” which pays workers $1,500 if they become employed after January 1 and were either previously unemployed or underemployed, receiving unemployment benefits, receiving SNAP benefits, or receiving TANF benefits; or were unemployed or underemployed and complete a WorkForce WV approved training program or approved certification program.
According to Governor Justice, the Jobs Jumpstart Program, “got 12,533 more West Virginians back into the workforce” since the program opened on February 1. But according to the official workforce data from Workforce WV, employment in the state is up by only 4,000 workers in February and March, which is a slower rate of growth than what the state had been experiencing in 2021, and the total size of the labor force has increased by only 840 workers. Instead of bringing workers back into the labor force, the Jobs Jumpstart program may be paying workers who are temporarily unemployed due to the high levels of job switching currently being experienced in the economy, as well as the normal seasonal fluctuations in unemployment that regularly occur in the beginning of the year.
Proposals like the Jobs Jumpstart Program or cutting unemployment benefits in order to “get people back to work,” are misguided because they fundamentally misunderstand who isn’t in West Virginia’s workforce and why.
West Virginia’s employment and unemployment rates are back to and even better than their pre-pandemic levels, but the state is still down 24,300 jobs. One reason for that discrepancy is the state has also lost population during that time. While there is currently a higher percentage of West Virginians working than there were during the pandemic, there are fewer West Virginians overall. According to the U.S. Census Bureau, West Virginia’s population has declined by over 21,000 between 2018 and 2021, and that decline is reflected in the state’s labor force statistics.
An increasing number of deaths has been the driving force in West Virginia’s population decline, particularly during the pandemic. While the state saw a net positive migration rate in 2021, with 2,300 more people moving into the state than moving out, it saw a negative natural population growth rate, with 9,870 more deaths than births, resulting in an overall population loss. The number of deaths in the state has increased sharply during the past two years, with the number of annual deaths in the state increasing by nearly 20 percent from 2019 to 2021. The pandemic likely played a significant role, with West Virginia having the 7th highest COVID-19 death rate as of February 2022, and over 6,800 deaths to date.
As such, it is not the case that we have to “get folks off the couch and get them into a job” to recover the remaining lost jobs. There aren’t more West Virginians “sitting on the couch” today with total nonfarm employment at 696,500 than there were when total nonfarm employment was at its peak of 745,200 in 2012 – there simply fewer people in West Virginia.
With the state’s employment and labor force participation rates back to and above their historical levels, the people who are not in the labor force aren’t simply “sitting on the couch.” Rather, they are facing the same barriers and challenges that they have faced historically that the state has continued to fail to address. Those who are not in West Virginia’s labor force in general have lower levels of educational attainment, are more likely to have a disability that limits or prevents work, are more likely to be in poor health, are caring for family members, or are older and retired.
With a large budget surplus and an abundance of federal aid, West Virginia had the opportunity to make investments in health, education, workforce training, and child care access that would directly address the well-known barriers that are keeping West Virginians from participating in the labor force. Instead, West Virginia chose to use its budget surplus and federal aid for more ineffective corporate subsidies and tax cuts, while continuing to neglect areas of need.
If West Virginia state officials and leaders truly want to increase the state’s labor force participation rate and close the remaining jobs gap, they need to stop buying into incorrect and harmful stereotypes that “lazy” workers are “sitting on the couch” and “scamming the system.” They need to stop pursuing ineffective gimmicks and harmful policies that punish the unemployed. Instead, they should start making the smart and long-needed investments that would meaningfully address the numerous barriers that keep West Virginians out of the workforce.
