The COVID-19 pandemic devastated the economy across much of the world and the country, including West Virginia. But, economists are hopeful for recovery with the rollout of the vaccine, pointing to early signs of a rebound across several sectors and a prediction for full recovery to pre-pandemic levels next year.
This hopeful forecast is in contrast to the grim early days when within the first month of the Mountain State shutting down due to the pandemic, unemployment rates soared. West Virginia lost 92,000 jobs in April alone.
“This was what we lost, you know, during the entire Great Recession, but, having that happen in one month,” said Sean O’Leary, a senior policy analyst for the West Virginia Center on Budget and Policy.
But by August, the state gained back more than half of those lost jobs, O’Leary said, adding that the economy initially recovered quickly as businesses re-opened in the summer. Since then, the recovery has not been as swift.
“As the pandemic has dragged on, as cases, you know, continue to rise, it never really got under control,” he said. “Things started to slow down, and we stopped adding thousands of jobs each month.”
Although growth has been ebbing and flowing this past year, the good news is West Virginia’s unemployment rate was 6.2 percent in November. This is down from April, when it was as high as 15.9 percent.
However, “economic recovery” for West Virginia doesn’t mean getting back to “the before times” or pre-COVID, O’Leary said, as the state’s economy was already in a slump when the pandemic hit.
“West Virginia in 2019 — we were steadily losing jobs, our economy was slowing down. We were headed in a negative direction, before” COVID-19 swept the nation, he said.
On average West Virginia lost about 1,000 jobs a month in 2019, according to the U.S. Bureau of Labor Statistics.
But it is not all doom and gloom — the state is on track to be back to a pre-pandemic economy by the end of 2022, said John Deskins, chief economist for West Virginia University. He said that even if those economic numbers are not the best, it’s a positive step for the future.
“We have to get back to where we were at the beginning of 2020 before we can get beyond that point. So we’re just taking one step at a time,” Deskins said.
Every industry is expected to recover and even see some growth, except for leisure, hospitality and retail, according to the West Virginia Economic Outlook Report for 2021-2025, of which Deskins is a co-author.
“That’s the sector where we have things like restaurants and bars,” Deskins said. “At one point, over half the jobs in that sector were gone back in the spring, when the lock downs were in full force.”
Those sectors can recover, Deskins said, but their resurgence is likely to come after 2022.
Predicting a full economic forecast is tricky, he added, as this recession is not based on an economic problem — like the country’s GDP, tariffs, stock market crashes or the housing bubble.
“In this case, the recession was driven by a public health problem that came, you know, completely out of left field,” Deskins said. “So the cause of this recession is completely outside of my wheelhouse.”
West Virginia’s economic trajectory could depend a lot on the roll-out of the vaccine, Deskins said. If people are vaccinated, they are more likely to go out shopping, go to work, eat out at restaurants or take trips — all things that stimulate the economy.
A federal bankruptcy judge hasdenied a petition from former Blackjewel coal executive Jeff Hoops to liquidate the company. The decision means the reorganization of the company will continue under Chapter 11 bankruptcy as former employees, creditors and state agencies seek to recover millions owed by the company.
Hoops cited “permanent negative cash flow” at his former company, which has accrued at least $80 million in administrative and other expenses since its bankruptcy filing on July 1 last year.
The nearly 3,000-filing-long Blackjewel bankruptcy docket demonstrates an 18-month scramble by the company’s creditors to recuperate as much money as possible from a too-small pot. According to court filings, Blackjewel also has multiple outstanding permit violations, an unknown amount of outstanding environmental reclamation liabilities, unpaid taxes totaling $2 million, tax liabilities of untold amounts, and millions in unpaid employee healthcare claims.
The request to liquidate, according to coal bankruptcy expert Josh Macey, was yet more proof that Blackjewel’s future was grim. “Given how long this bankruptcy has dragged on, how poor conditions for coal are right now, how speculative and unprofitable Blackjewel’s assets have been, it isn’t surprising that it’s moving to a liquidation,” Macey said.
Federal Judge Benjamin A. Kahn did not explain in his order why he was denying Hoops’ petition to liquidate. But environmental advocates had previously objected to the request, arguing that a liquidation would make it less likely that certain of Blackjewel’s mining permits would be reclaimed.
Federal agencies, including the Internal Revenue Service and the Department of the Interior, also objected to the petition to liquidate. “The United States believes that the best course of action is to allow the Debtors [Blackjewel] additional time to develop a plan that would meet the requirements of Chapter 11 of the federal bankruptcy laws and not require the Debtors to convert to a Chapter 7 liquidation,” attorneys for the agencies wrote.
Blackjewel made headlines last year after its abrupt collapse left hundreds of Kentucky and Virginia coal miners out of work and without pay. Environmental advocates remain concerned that some coal mines will put strain on state mine land reclamation funds or go unreclaimed altogether.
Hoops has been sued in the same bankruptcy court over alleged financial mismanagement of Blackjewel and associated companies.
Stay-at-home mom Sarci Eldridge has a big heart. So when Kentucky entered its second round of restaurant restrictions due to the coronavirus pandemic, her first thought was for her favorite server, Jessica Carey.
“Me and my mom were talking, and we were just like, you know, we should just get Jessica something to get her through the holidays,” Eldridge said. “Some gift cards and stuff. She has a little boy.”
Carey has been a server and a bartender at Tex-Mex chain Chuy’s in Lexington, Kentucky, for about seven years. She loves the Eldridge family, too. “I was going through a lot of stuff when I met them, and she and [her husband] Nate and her mom were just so sweet to me, and always seemed to know when I needed a hug.”
Carey was surprised when, out of the blue, she received a message from Eldridge asking what her son, Dain, wanted for Christmas. But after months of reduced hours and meager unemployment benefits, Carey needed the help.
“So I sent her a super small list, it was just like four things I think.”
Eldridge posted about the exchange on her personal Facebook page, she said, and it blew up. “I had some people go, like, ‘Oh, that’s a really good idea, I should do something for my favorite server.’”
A few days later, Eldridge started a Facebook group based on the idea, which she called“Adopt a Server Kentucky.” Within a few days, it had hundreds of members; within a month, four thousand. Some were generous Kentuckians moved to help struggling restaurant workers. Others were restaurant workers themselves, swallowing their pride to ask for help buying necessities, paying the electric bill, and making Christmas special for their kids.
“We need to come together and try to help people through the holidays, because through no fault of their own, these people have lost their job twice in a year, or massive pay reduction, and that’s just not easy,” Eldridge said of the group.
Many Workers, Low Wages
According to the Brookings Institution, waiting tables isthe eighth most common job in the United States, with more than 12 million Americans in the hospitality sector. (This figure includes hotel workers and back-of-house workers, like dishwashers, in restaurants.) Restaurant work ranks among the top 10 industries with the most workers in the Ohio Valley states of Kentucky, Ohio and West Virginia.
The industry has been hit particularly hard by the pandemic, with establishments forced to close for long periods and struggling to survive on reduced capacity even when they’re permitted to open their doors. It’s left servers like Carey with their heads spinning as they balance newly unreliable incomes with kids’ changing school schedules and concern for their health and their families’.
On top of that, the unemployment insurance system is uniquely ill-suited to meet the needs of people in the restaurant industry, according to the Brookings InstitutionMetropolitan Policy Program fellow Annelies Goger.
“In every state, you have to have income at a certain level every quarter in order to qualify [for unemployment], and many tipped workers, because that minimum wage is so low, wouldn’t be able to document that they have enough income to show that they’re eligible,” Goger said.
In addition to making too little money to qualify for unemployment in the usual system, the tipped minimum wage also hurts millions of servers. The national minimum wage is $7.25/hour, but the minimum wage for tipped workers is just $2.13 an hour. Since unemployment benefits are calculated as a percentage of wages, tipped workers who do qualify for unemployment insurance are likely to receive just a fraction of what other workers might bring in.
“They said I would get $199 every two weeks,” said Chuy’s server Carey. “I could make that much in one day in a good day shift. So that’s like one day, stretched over two weeks.”
The expiration of some federal support for displaced workers hit the Ohio Valley especially hard. Areport from the U.S. Bureau of Economic Analysis shows personal income dropped last quarter by about 24% in Kentucky, and by about 30% in West Virginia — the sharpest declines in the country.
Kindness Amid “Dystopia”
Louisville server Sara Bell spent weeks unemployed, then suffered a knee injury that’s kept her off her feet even as Kentucky has reopened some dine-in capacity at its restaurants. With no paid time off, Bell turned to the brand-new Adopt a Server page for help.
“I felt a little weird asking for help, because I don’t have kids,” she said. But she does have cats: Jibby, Chewie and Duffy. “My main thing is that I want to keep them fed.”
Courtesy Sara Bell
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Ohio Valley Resource
Adopt a Server helped Sara Bell get treats for Jibby (left) and Chewie (right).
Bell was quickly “adopted,” the language used on the page when a non-server commits to fill at least some of a server’s needs. “This sweet angel, she sent me a 22-pound bag of cat food and a big thing of their treats. And then she sent me a $100 Visa gift card and a $25 Starbucks gift card, and she kind of told me, everyone deserves a little Christmas.”
Also in Louisville, exotic dancer Tabitha Rowan worried how she would be received if she posted to Adopt a Server. But, she reasoned, closed mouths don’t get fed. “Here I am, you know, am I going to feed my son this last pack of hot dogs, this last box of cereal, and I’m just not going to eat so he can?”
So she posted, “I don’t want to come on here and not be 100% honest so here is my truth. I am not a server, I am a dancer.” She went on, “I was genuinely worried to make this post because of the “stereotype” that surrounds us. However, I promise that that stereotype does NOT apply to us all. I am just a mother that works VERY hard to take care of her son.”
She added a link to an Amazon wish list with Christmas presents for her three-year-old son, Legend.
In Lexington, Eldridge saw Rowan’s post, and she approved it. “She was just precious to me, for no other reason than she was just completely honest about her plight.”
Rowan was adopted the next day. “I opened up the door one day, and there were like six boxes sitting there.”
She went on, “I like the name Adopt a Server, but that group needs to be Beyond Blessings, is what it needs to be. That group is amazing.”
Courtesy Tabitha Rowan
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Ohio Valley Resource
Tabitha Rowan asked for help with Christmas presents for her son Legend.
It’s hard to tell how many restaurant workers Adopt a Server has helped, but the page is brimming with multiple new posts each day. Scrolling through them is a rollercoaster of emotions: heartfelt photos of happy babies in brand-new clothes, interspersed with desperate pleas for help keeping the heat on.
Bell appreciates what the group has given her, but she sees a dark side to it, too. “This pandemic has really radicalized me,” she said. “As great as it is that people are so generous wanting to help others, it’s also incredibly dystopian the way our government failed the working class.”
An Unexpected Gift
Shortly after Jessica Carey sent Sarci Eldridge her son’s wish list, 11-year-old Dain came rushing to his mom’s side with a last-minute item for his Christmas list.
“There was a little bottle of cologne that he just loves, and he loves it because it is one that his dad gave him. And his dad died three years ago. He’s been stretching that cologne impossibly, and it finally ran out not too long ago,” she said. “He’s not very talkative about his dad. But that was one thing that meant a lot to him.”
The last few years have been difficult for Carey, she said, dealing with the loss of her high-school sweetheart and raising her son alone. It turns out, Adopt a Server had one more gift for Carey herself that wasn’t on any list.
“Me being me, I never thought that I was anything special. And I know that sounds bad to say about yourself, but … the fact that somebody thought that that was enough to want to help other people, like, I never realized that that is what I meant to them. And it feels really good.”
The Ohio Valley ReSource gets support from the Corporation for Public Broadcasting and our partner stations.
A new federal report shows that West Virginia and Kentucky saw the country’s sharpest declines in personal income last quarter. Alana Watson explains the losses are tied to the pandemic and declining support from the coronavirus relief act.
The U.S. Bureau of Economic Analysis says personal income decreased in every state in the third quarter of 2020, which includes the months of July, August, and September. West Virginia and Kentucky saw the largest declines.
Income in West Virginia declined by almost 30 percent and Kentucky by 24 percent. Ohio’s personal income declined by 16 percent.
Personal income had increased in the second quarter from April to June due to the government’s economic support during partial COVID-19 shutdowns.
Matthew von Kerczek is an economist for the Bureau of Economic Analysis. He says the reduced COVID-19 aid from the CARES Act was one of the leading contributors to the decline in the third quarter.
“In the second quarter, the CARES act boosted personal income by about 3 trillion dollars. In the third quarter it’s just over 1 trillion dollars,” Kerczek said.
Von Kerczek says there was a partial rebound in earnings in the third quarter due to the gradual reopening of the economy.
The final 4th quarter report will be released in March 2021.
In October, Gov. Jim Justice and Virgin Hyperloop made a major announcement. West Virginia would be home to the first hyperloop certification center ever in the country.
“For years, I have been saying that West Virginia is the best kept secret on the East Coast, and it’s true,” Justice said in a press release. “Just look at this announcement and all it will bring to our state – investment, jobs and tremendous growth.”
A hyperloop is a new concept for transportation that can move people and goods through pods in a vacuum at roughly 600 mph. To put that into perspective, a hyperloop could theoretically enable travel from Pittsburgh to Chicago in about 40 minutes, or from New York City to Washington, D.C. in just 30.
The hyperloop concept was first proposed by Elon Musk, the CEO of Tesla and SpaceX.
Virgin Hyperloop/WV Governor’s Office
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Virgin Hyperloop’s new certification center will include a six to seven-mile test tube in the Canaan Valley covering parts of Tucker and Grant counties. The center is expected to be completed in five or six years.
The project may create up to 10,000 construction jobs in that time. Once fully operational, it could employ anywhere from 150 to 200 people with engineering and high-technology backgrounds who either already live in West Virginia or want to move here. West Virginians are expected to be given priority in the hiring process, according to company officials.
Long term, there may be efforts to connect the test track in the Canaan Valley to Morgantown, Washington, D.C., Baltimore and Pittsburgh.
Reporter Liz McCormick spoke with Mike Schneider, vice president of project development at Virgin Hyperloop, over Skype to learn more about the certification center, hyperloop technology and what this could mean for West Virginia and the world.
Transcript below. This conversation was edited for clarity.
MCCORMICK: In layman’s terms, what is a hyperloop?
SCHNEIDER: The concept of hyperloop is…it’s almost closer to aviation than it is to a train. It relies upon several technologies that exist but have never been actually combined to form an actual transportation mode. So, the centerpiece of hyperloop technology is a process called magnetic levitation. There’s a series of magnets along the track. And there’s a series of magnets inside the vehicle. And what makes the vehicle move is the pulling function of the magnets on the track, attracting the magnets on the vehicle. But if you put that system inside a tube, and then evacuate the air, so there is essentially no friction — because it’s the air friction, which is largely a deterrent to speed — but if you remove the friction component, then have it operate in effectively a vacuum, there’s almost no limitation to how fast those magnets can pull the vehicle without there being any air resistance. So, that’s what allows us to get up to 650 or 700 mph within the tube once evacuated of air.”
MCCORMICK: What will the certification center in the Canaan Valley be doing?
SCHNEIDER: The first step is evolving and proving the technology works at scale, meaning at speed. You probably have seen videos or reports of our recent successes with our initial, much, much shorter test track in the Nevada desert above Las Vegas, where we have actually achieved speeds in a very short tube, about a third of a mile. We achieved speeds of about 250 mph, which obviously is an acceleration that humans couldn’t withstand. But it has proved the concept of magnetic levitation in a vacuum tube. And then of course, just a couple of weeks ago, we did put two live people in a vehicle and did demonstrate that we can move people in a vehicle in a vacuum tube. We of course didn’t take it up to that speed; they achieved about 110 mph within the third of a mile. But we proved for the first time ever that people could ride in a hyperloop vehicle. So, the real purpose [of the certification center] is to have a facility where the technology can evolve, be tested, and be used with government observers and monitors to assure that all of the safety provisions are embedded, and that it is indeed safe and therefore can be certified. So, that’s the ultimate mission.
MCCORMICK: Why West Virginia?
SCHNEIDER: We chose West Virginia for a number of reasons. All of which are very, very relevant. We had four basic criteria. One, what were the corridors that were being offered? What were the alignments? Would they work for hyperloop as a test track with respect to the speed and alignment that we wanted to achieve? Secondly, what kind of funding and financing proposals were being proffered by the states to partner with us? What kind of incentives and packages were being put on the table for our review? Thirdly, what was the composition of the team? Who would we be working with? Who was leading the team? What organizations, public and private, would comprise those teams? And finally, what kind of overall support was there? Political, community, business? And frankly, West Virginia, scored exceptionally highly on all four of those. And in the end, it was not a difficult decision.
MCCORMICK: Was West Virginia’s workforce something you took into consideration when you were considering the location in Grant and Tucker counties?
SCHNEIDER: We know that the location is not in the middle of Los Angeles or Dallas or even Kansas City, but on the other hand, the commitment that [West Virginia] seems to be already making to both education, to job training, to employment growth, to a focus and a movement from an extraction economy, in many ways to a high technology economy. All of that was quite compelling to us. We knew there weren’t hundreds of thousands of workers living in Tucker and Grant counties at this point, but we also knew that this was an area that, over time, would be developing in a number of different ways, and we felt that the attraction of this high technology enterprise would be quite a stimulus for both local residents, those in school in West Virginia, and others from around the country who would move to West Virginia because of the opportunity to work on this project.
MCCORMICK: How do you envision a project of this magnitude affecting West Virginia’s image throughout the rest of the country?
SCHNEIDER: I think it’s best summed up by what Gov. Jim Justice told me when I first came to the state a year ago to take a look at the opportunity and to talk to our potential partners. Justice said in his characteristic style, ‘you will find out that we are the can-do state. If we say we’re going to make this happen and be your partner, we will.’ When you’ve had as many decades working with elected officials as I have, you take that with a bit of a grain of salt. But he was absolutely right. It was uncanny how enthusiastic everyone from the research community, the university community, the private sector, the state has been about this. And one of the things that we really like is the notion that we can be part of, I guess what I would call a transformative project, that everyone we’ve talked to in the state feels will do a great deal to help advance the economy and put the state on the map as an emerging, advanced technology center.
MCCORMICK: Looking nationwide, what do you think the impact will be from this certification center? On the country and the world as we explore how we are going to travel in the future?
SCHNEIDER: It’s time for two things to happen. We haven’t had a new mode of transportation in over 100 years. I think it’s time. Secondly, we want to take the status of our planet seriously, and we need to find new methods of utilizing less energy and having less impact on the environment. So, you know, while there are states in the country that I think might be viewed as having a greener ethic than one would think of West Virginia — I’m not sure that’s true. I think there’s a great desire to support a new direction, and I think having the technology development and deployment centered in West Virginia is going to be very positive for the state. Think about what Houston was before the Space Center was put there in the 1960s. Houston went from, kind of the home of the energy elite and the oil and gas industry to the space center capital of the world. And it didn’t take more than a decade or so for that to happen. I’m not sure that [hyperloop is] on that grand a scale, but it’s not a bad comparison.
When the coronavirus pandemic threatened the annual Wyoming County Toy Fund, organizers partnered with eight local fire departments to collect and distribute toys to families in need.
Nathan England is captain of the Mullens Fire Department, one of the departments that helped out with the Toy Fund this year.
“It’s always hard to come and ask for help,” England said. “It’s not an easy task for any human to do, especially if you know you’re trying your hardest, but you can’t seem to get over the hump. We’ve all been there. More times than not we’ve all been there.”
About 23% of Wyoming County residents live in poverty, according to the latest data from the U.S. Census Bureau. England says that statistic makes it all the more important for local fire departments to lend a hand.
“It just makes you realize really what Christmas is about,” England said. You it’s a humbling experience, to say the least. It’s about all I can say on that. It’s a humbling experience.”
This year, the Toy Fund partnered with the local fire departments to make sure they could meet COVID safety guidelines while distributing toys.
“Well, the bottom line, everybody needs Christmas, it doesn’t matter what age you are, it’s always nice to have a gift,” England said. “I think we as a fire department, we’re always in tragedies, we very rarely get to see the good things in life, and being able to see that smile on kids’ faces, that’s something that’s irreplaceable.”
The idea was to host the distribution sites at well-ventilated locations around the county in hopes to cut back on crowds and keep things safe.
Jessica Lilly
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Volunteers setup toys and monitored toy distribution for the Wyoming County Toy Fund on Saturday, December 12, 2020.
“We have a table set up in the front to allow two families in at a time, we’re trying to keep the social-distancing, asking people to wear their masks,” England said. “We’re actually picking up the toys and loading them in a box or something along those lines.”
After the initial line in the morning, there was a slow trickle of parents who came to the fire stations and carefully selected one toy per child. Todd Norris is a Mullens police officer.
“People in this area are not immune to financial struggles,” Norris said. “Being in the coalfields, it’s something that you expect or it’s just, I mean, it’s it’s just kind of a way of life.”
This time, he’s not in town for work.
“It’s been a tough year, tough year and a half, I guess,” Norris said. “I got laid off from the railroad back in 2019. And so yeah, it’s been rough.”
Norris has known about the Toy Fund, but this is the first time he’s stopped by to pick out toys.
“It means a lot to be able to come down and get a gift and and know that you’re going to have have something,” Norris said.
Organizers hope that the additional locations made it easier on families who didn’t have to travel as far.
“As of right now, I can honestly say one way or another, I believe definitely it would reach more families this way because of the ease of access to the fire station versus having to go to Wyoming East or Westside,” England said.
Families with a child 12 or younger — who have received assistance from the Department of Health and Human Resources — were eligible to pick up a toy.
The DHHR will tally the numbers to find out how many families participated this year.
Jessica Lilly
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Volunteers with the Mullens Fire Department stand behind a table of toys for the Wyoming County Toy Fund 2020.
