West Virginia’s jobless rate spiraled to 15.2 percent in April, more than twice March’s rate of 6.1 percent.
As bad as that is, Dr. John Deskins, Director of WVU’s Bureau of Business and Economic Research, believes the true April picture was even worse.
“We know it (jobless rate) is higher than that now based on additional unemployment insurance claims,” Deskins said. “We still believe the true current unemployment rate is near 20 percent.”
If that is the actual unemployment rate, it would be higher than any time since the Great Depression, when it reached 25 percent. In February 1983, the unemployment rate reached 18.8 percent. The difference, however, is that the rise occurred over more than two years.
The number of unemployed West Virginians increased from just over 67,000 in March to 117,000 in April. Unemployment claims have soared to over 200,000 since March 1st.
Leisure and hospitality, healthcare and retail trade have been hardest hit. It seems odd that healthcare would have so many layoffs since we are in the middle of a pandemic, but Deskins said the shutdown of elective and non-essential healthcare services took its toll.
Now West Virginia is reopening, and the question is how quickly will the economy come back? That is the great unknown. There are many variables, including the economic health of the region of the state before the shutdown and the confidence of consumers in the months ahead.
“Most of the economic damage is obvious,” Deskins said. “For example, restaurants shut down and employees were laid off. As new data come out, we will be looking for signs of lasting damage, i.e., bankruptcies, business closures, etc.”
Despite all the bad news, Deskins is optimistic about the recovery. He points out that this is totally different from any other recession. The ordered shutdown means this was is “a recession by design.”
“This still gives me hope for a relatively quick recovery, barring any new spike in case counts.”
Meanwhile, the job search website Zippa.com reports West Virginia is ahead of most other states in getting back in business. Its survey of “Most Open for Business States” ranks West Virginia seventh.
Zippa concluded that even though states such as West Virginia “have not completely opened, or are even operating at full capacity, the businesses and workers who reside in these states are beginning to get a bit of normalcy back into their lives.”
That is encouraging, especially since our COVID-19 numbers continue to reflect one of the lowest infection-to-testing rates in the county (1.9 percent). As long as West Virginians keep following best health practices, this spike in unemployment will be an anomaly and not the beginning of a trend.