West Virginia’s unemployment compensation fund is on the brink of insolvency. The fund, at its lowest level in three years, is projected to run out by February 2011. Like 32 other states that have already run dry, West Virginia may be forced to borrow federal funds to continue paying unemployment benefits.
The fund currently stands at $99.5 million. Over the month of August, the state paid out $19 million in benefits and saw more than 7,000 initial claims filed. WorkForce West Virginia, the agency that oversees jobless benefits, projects that at the current rate disbursements will surpass revenues by December.
Unemployment continues to rise. In August, West Virginia registered an 8.9 percent jobless rate, an increase of 0.3 percent over July...However, because of the long-term character of the jobs crisis, such conditions are masked in the official month-to-month figures, which have consistently been lower than the national rate. Fully half of West Virginia residents aged 16 and older are classified as “not in labor force,” and tens of thousands of workers have no choice but to subsist on minimum wage, part-time and seasonal jobs.
Social distress is the product of deliberate fiscal policy. West Virginia is one of a handful of states across the US that did not record a deficit in 2009, in large part because a long-term austerity regimen for social programs and infrastructure. Indeed, as thousands more residents are being driven into poverty and want, the state legislature passed a budget with no spending increases in any services. Wall Street lauded this decision; on July 9, rating agency Moody’s Investment Services upgraded the state’s bond rating to AA1, praising its “fiscal conservatism and consistent fund balances.”
http://www.wsws.org/articles/2010/sep2010/wvir-s20.shtml
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