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CHARLESTON — A top West Virginia University economist told lawmakers Wednesday morning that West Virginia’s economy has nearly fully recovered from the sharp downturn it took in March 2020.

John Deskins said he sees the glass half full when measuring the state’s economic standing 22 months following West Virginia’s initial pandemic declaration. Speaking in the House chamber for his annual economic outlook presentation, Deskins told legislators they first must realize where West Virginia stood not long ago.

“First and foremost, we suffered the fastest collapse in economic history two years ago,” Deskins said.

West Virginia lost about 94,000 jobs during the onset of the pandemic. It has recovered about 73,000 of those, Deskins said. In March 2020, the unemployment rate shot up from 5% to 16% “virtually overnight,” he said. He attributed most of the recovered jobs to residents who lost their jobs and found new employment during the past 22 months.

It was “a more rapid recovery than I would have expected,” Deskins told lawmakers, saying he never would have predicted such an outcome in the summer of 2020.

But West Virginia is not yet in the clear as the pandemic continues to affect the economy in varying ways, he said. West Virginia, similar to the rest of the country, has not fully recovered its low-pay, “customer-facing” jobs, Deskins said. People find this apparent in restaurants and fast food locations, but they should not consider this to be representative of the overall economy.

“(Unemployment is) concentrated in things like retail, leisure and hospitality,” Deskins said. “I do think the recovery has been strong, but like I said, we’re not out of the woods yet since we still have 21,000 jobs yet to recover.”

A WorkForce West Virginia news release sent out Wednesday claimed West Virginia’s seasonally adjusted unemployment rate is 3.7%. Deskins said the state is also paying less in unemployment insurance than before the pandemic.

One of the most important measures of West Virginia’s economy is the workforce participation rate, where Deskins said the state ranked dead last nationally in 2020 at 55%. The national average was 62% two years ago. Although there is no data available for 2021, Deskins said he didn’t expect those figures to move much. For West Virginia to achieve the prosperity its lawmakers currently aim for, the state must improve in this arena, he said.

“We have to get more people in the workforce,” Deskins said.

2020 was “a horrible, horrible year for coal production,” Deskins said, which greatly affected tax revenues.

Not counting years with lengthy miner strikes, the last time West Virginia produced that low of a figure was in 1918 — the year the influenza pandemic took hold of the world, he said.

Coal production has increased since March 2020, and will continue to increase, Deskins said, but the state is projected to never hit its 2019 figures again. Natural gas production was not seriously affected during the pandemic, and Deskins said he expects annual increases in this energy sector.

Precision allocation of an “unprecedented wave of federal money” coming into West Virginia will be the most important responsibility of lawmakers in determining the state’s future economy, Deskins said. With billions in federal taxpayer dollars hitting state and local bank accounts in the past two years, Deskins said legislators must ensure they think in the long term, as this amount of money can prompt people to think only in the short term.

Joe Severino covers politics for HD Media. He can be reached at 304-348-4814 or joe.severino@hdmediallc.com. Follow @jj_severino on Twitter.

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