Since the state legislative session began last month, much attention has been focused on the high number of job openings in West Virginia. Two bills that are rapidly moving through the Senate (SB 2 and SB 3) would drastically cut unemployment insurance benefits for displaced workers in the name of “getting people back to work,” and Governor Justice introduced the Job Jumpstart Program at his State of the State address with the same intention. But of note, the number of West Virginians claiming unemployment benefits is at a record low. As such, these efforts ignore a major factor contributing to the high number of job openings — people who are outside of the job market altogether and face barriers to work. Lawmakers in West Virginia can make major strides addressing the challenges that keep these folks on the sidelines by utilizing Fiscal Recovery Funds available to them from the American Rescue Plan Act (ARPA).
The efforts by both the legislature and the governor reflect a misunderstanding of the drivers of high job openings and perhaps even a misunderstanding of what is required in order to receive unemployment insurance. To be explicit, unemployment insurance benefits are only available to people who have worked recently, lost their jobs through no fault of their own (they cannot have simply quit), and are actively looking for a new job. As such, slashing unemployment benefits as is being proposed by SB 2 and SB 3 or creating a cash benefit for people receiving unemployment benefits as the Job Jumpstart program does targets people who are already in the labor force meeting requirements that they are looking for a job.
Further, the number of West Virginians currently receiving unemployment benefits is at a historic low, as state leaders often tout. Even if all current unemployment insurance recipients took jobs tomorrow (regardless of whether those jobs were a match for their skills), there would still be job openings available. This is why efforts to fill job openings must focus on increasing the size of the labor force by addressing the barriers that keep folks out of it to begin with.
The pandemic, and its accompanying impacts on child and family responsibilities, has driven many women out of the labor force. The national labor participation rate for women with children under the age of 13 is still four percent below what it was pre-pandemic. In his testimony in front of the Senate Judiciary Committee last week, Workforce WV Commissioner Scott Adkins testified that the three primary barriers to work his agency sees are access to child care, transportation, and job readiness.
Last week, the US Department of Treasury issued its final rule on eligible expenditures of ARPA’s Fiscal Recovery Funds. In total, West Virginia will receive over $2 billion in Fiscal Recovery Funds, with $1.355 billion for the state to allocate and $676 million going to cities, counties, and municipalities to be spent through the end of 2024. This guidance made clear that state and municipal lawmakers can use these funds to address the very issues Commissioner Adkins highlighted.
Allowable expenditures Fiscal Recovery Funds fall into four main buckets: replacing lost public sector revenue, addressing public health and economic impacts, offering premium pay to eligible workers, and investing in water, sewer, and broadband infrastructure. Within the public health and economic impacts bucket, Treasury specifically states that child care, early education, and job training programs are all allowable investments, directly addressing the barriers that Commissioner Adkins referenced. Additional allowable expenses include affordable housing development, mortgage and rent assistance, paid family and medical leave programs, and small business grants — all of which could also address barriers to work faced by West Virginians who are outside of the labor force, particularly women and people of color, for whom care responsibilities often fall upon.
ARPA’s Fiscal Recovery Funds present an opportunity for West Virginia lawmakers to make long-needed investments that will increase the size of our workforce and grow our economy. Instead of cutting benefits for people who are actively looking for work, which would fail to address job openings while harming our economy, we can grow the labor force through smart investments of federal relief dollars in our state’s workers, families, and small businesses.