WISE – Eighteen months ago, when Jason El Koubi was looking at economists’ predictions for pandemic job recovery, he was alarmed.
Experts were predicting that a return to pre-pandemic employment levels in rural areas would lag the recovery in more populous areas by three years, said El Koubi, president and CEO of the Virginia Economic Development Partnership. Virginia already had been seeing urban areas outpace rural regions in job growth and population growth; hearing that the pandemic could further widen that gap was sobering, he said.
“It was freaking me out, because we knew we had a lot of catching up to do in rural Virginia, and other rural parts of America, frankly,” he told attendees at the Southwest Virginia Economic Forum on Wednesday in Wise. “And the pandemic could have permanently kind of set back rural regions.”
In fact, Southwest Virginia rebounded more quickly than the state as a whole, he said.
The region that runs from the New River Valley to the southwest corner of the state posted peak job loss rates ranging from 8.5% to 14.4% – a loss of more than 27,000 jobs – in March/April 2020, El Koubi said. But the region saw employment return to pre-pandemic numbers this March, while Virginia as a whole is still down by 3%, or more than 150,000 jobs, he said.
“Southwest Virginia is actually ahead of the curve,” he said.
The reasons for that better-than-expected performance could include the fact that Southwest Virginia employment didn’t initially dip quite as far as the rest of the state and so the region had a smaller hole to climb out of, El Koubi suggested. The region also has fewer industries that were conducive to teleworking, he said, which meant that employees had to keep showing up to work.
The recovery is good news for Southwest Virginia, but the state’s lagging performance remains troubling, El Koubi said.
“This is really concerning, not only because we haven’t recovered but because we’re hanging out with the wrong crowd right now,” he said. The states that have “powered out of the pandemic” – North and South Carolina, Georgia, Tennessee, Florida – were not only top growth states before the shutdown, but they’re Virginia’s economic development competitors.
“These are our neighbors, and this is the crowd we compete with,” he said. “This is the crowd that we really need to hang with.”
Instead, Virginia currently ranks No. 47 in its jobs recovery, he said. “We are one of the most sluggish states in terms of getting back to our pre-employment baseline,” he said.
Virginia also has seen a “precipitous drop” in labor force participation, which stood at 66% before the pandemic and dropped to 63%. While El Koubi said he’s seen a recent uptick, the state remains well behind most of its neighbors.
The continuing impacts of the pandemic remain concentrated in the same sectors that were hit hard during its peak, including leisure and hospitality, he said. The shift to e-commerce brought on by the pandemic is starting to show up in the retail and warehousing and distribution sectors, which are seeing job growth.
The economic forum, held at the University of Virginia’s College at Wise, attracted more than 300 people in person and online. The day included discussions about the future of housing, attracting talent, the need to expand child care and the economic effects of casinos.
But jobs growth was the overarching theme.
Five years ago, when the Virginia Economic Development Partnership developed a strategic plan for economic development for the state, roughly half of Virginia’s regions had seen job losses over the previous 10 years, and only four regions were expected to be in positive territory, El Koubi said.
An updated forecast, looking at expected job growth from 2019 to 2025, predicts some improvement, he said, with more regions showing positive job growth – although not yet Southwest Virginia. The far southwest corner of the state would need to add 400 jobs a year to achieve growth, while the region just to its east, which includes Bristol, would need to add 100 jobs a year.
El Koubi thinks that’s doable.
“When you look at what it would take, in terms of the forecast, to get Southwest Virginia from negative territory to positive territory, you’re talking about a difference of just a few hundred jobs per year,” he said. “This is an accomplishable goal, folks. We can put Southwest Virginia in positive territory.”
House Majority Leader Terry Kilgore, R-Scott County, agreed. “It’s not that much,” he said in an interview later Wednesday. The region needs a steady stream of “base hits,” he said, not necessarily a lot of home runs.
But growth is critical, he said; Southwest Virginia can’t afford to continue to lose population and must attract new investment. The region already has lost a House seat to redistricting, he pointed out.
“We’re willing to go anywhere,” he said of himself and his legislative colleagues. “We’ll go knock on doors.” If his counterparts in other parts of the state don’t do that, it might be because those regions don’t have to fight as hard for economic opportunities, he said.
“For us down here, it’s a life-or-death situation,” he said.
The Virginia Economic Development Partnership set a goal five years ago to position Virginia as one of the top states for job growth, El Koubi said. But it’s not good enough for Virginia as a whole to perform well, he said – the state is committed to making sure every region sees economic growth. “This is a team sport,” he said.
Among the state’s successes that could have a positive impact on Southwest Virginia, he pointed to Virginia’s successful bid for Amazon’s HQ2, a project that will be located in Northern Virginia but is already producing ripple effects through a statewide investment designed to increase the number of graduates with computer science and related degrees – including, he said, at UVa-Wise.
He also mentioned several economic development initiatives that await state budget action, including $100 million for site development and more money for the Virginia Talent Accelerator Program.
He called on the audience to see a future for Southwest Virginia that includes an emerging energy innovation hub, nearly ubiquitous broadband, enrollment growth at UVa-Wise, a growing cultural tourism sector – all, he said, “an opportunity to buck America’s rural decline trend.”