United States
West Virginia
African-Americans (WV)
46.4%
31.2%
14.3%
17.7%
Poverty Rate
20.0%
23.6%
Child Poverty Rate
Source. U.S. Census Bureau, American Community Survey
31.0%
32.5%
26.9%
25.5%
22.9%
22.9%
17.5%
UNITED
STATES
Pennsylvania
Ohio
Maryland
Virginia
West Virginia
Kentucky
Source. EPI analysis of Current Population Survey
15.0%
12.2%
10.0%
5.0%
2.9%
0.0%
-3.2%
-5.0%
-10.0%
-2.4%
-2.5%
-2.4%
-3.8%
-4.2%
-7.6%
10th
20th
30th
40th
50th
60th
70th
80th
90th
Source. WV Center on Budget and Policy
$2,500
West Virginia's annual wages with
equal growth across all deciles.
$2,036
$2,000
$1,500
$1,379
$1,348
$1,048
$1,000
$692
$791
$624
$500
$0
10th
20th
30th
40th
50th
60th
70th
Source. WV Center on Budget and Policy
Source. New York Federal Reserve, Quarterly Report on Household and Consumer Debt
per capita personal income
median family income
2
1.5
1
0.5
0
Source. WV Center on Budget and Policy
800,000
780,000
760,000
740,000
720,000
700,000
700,363
705,180
680,000
660,000
640,000
620,000
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
600,000
Source. Workforce WV
10%
9.3%
9%
8.8%
8.2%
7.9%
8%
7.8%
7.5%
7%
6%
5%
4.2%
4.3%
2007
2008
4%
3%
2%
1%
0%
2009
2010
2011
2012
2013
2014
Source. WV Executive Budget 2011
1. Enact a refundable state Earned Income Tax
Credit (SEITC). (Already covered)
2. Modernize state Unemployment Insurance
system to include more workers.
3. Expand opportunities to build assets with
Voluntary Employee Retirement Accounts.
• In 2009, UI pulled 11,000 West Virginians out of
poverty
• American Recovery and Reinvestment Act (ARRA)
includes $33 million for West Virginia to modernize
its Unemployment Insurance (UI) program.
• West Virginia has drawn down one-third ($11M), but
needs to make two additional changes by August
2011 or it forfeits remaining $22 million.
• Four options, but we are looking at cheapest two:
– Part-Time Workers
– Compelling Family Reasons.
• 28 states allow part-time workers to qualify for
Unemployment Insurance.
• One in every six (128,000) West Virginia workers
work part-time. Two-thirds (85,000) are women.
• Policy Change will directly benefit an estimated
1,850 workers.
• This recognizes that the workplace has changed
since 1935. Many states have approved benefits for
family-related quits (see numbers in parentheses
below).
– It would allow people to get UI if they quit their jobs due
to domestic violence (31 states & DC);
– They were caring for a sick or disabled member of their
immediate family (24 states); or
– They were following their spouse to a job located where
it is impractical to commute (22 states).
• All three are required to qualify for federal funds.
Nineteen states have enacted all three of these
reforms.
Source. NELP
Millions
$0
-$20
Dec-11
Nov-11
Oct-11
Sep-11
Aug-11
Jul-11
Jun-11
May-11
Apr-11
$60
Mar-11
$80
Feb-11
Jan-11
Dec-10
Nov-10
Oct-10
Sep-10
Aug-10
Jul-10
Jun-10
May-10
Apr-10
Mar-10
Feb-10
$100
Jan-10
$120
$97, 465.000
$9M
Hole!
$40
$20
-$40
-$60
-$80
-$100
-$120
Source. Workforce WV
• The UI Trust Fund is schedule to be $9 million
in the red by March 2011.
• $22 million would prevent the state from
increasing taxes or borrowing from the federal
government.
• Funds will last 4-7 years and can be received
within 30 days.
• Reforms do not have to be enacted until 2012.
• Over half of West Virginia’s workforce (300,000) lacks a
job-based pension.
• Lack of retirement assets is one of the leading causes of
poverty among the elderly.
• Social Security provides a necessary stable base of
income, but workers also need pensions and savings
for true security and comfort in old age.
• Pensions coverage and availability of a retirement
account is often based not on need, but where you work.
• VERA would provide every worker in the state with
access to retirement account.
Availability
80.0%
Participation
76.1%
71.6%
70.9%
70.0%
64.2%
63.6%
60.0%
55.6%
51.2%
50.0%
30.0%
20.0%
39.4%
37.5%
40.0%
29.5%
24.8%
18.0%
10.0%
0.0%
$10,000-$14,999 $15,000-$19,000 $20,000-$29,999 $30,000-$39,999 $40,000-$49,999
$50,000 or more
Source. WV Center on Budget and Policy
Median Retirement Assets Among Households, Age 55-59
All Households
Households w/ Account(s)
$444,000
$391,000
$161,600
$118,000
$56,500
$0
$6,500
$18,900 and
Below
$7,000 $14,000
$30,000
$79,300
$52,000
$18,900-33,900 $33,900-53,599 $53,600-89,299 $89,300-129-399
$129,400 and
Above
Source. WV Center on Budget and Policy
• Similar to the SMART 529 plan, the State Treasurer’s Office could
oversee the program and contract with a private financial institution to
administer it.
• The plans could offer payroll deduction IRAs and SIMPLE IRAs and
employees could choose their investments from a smaller menu of
options.
• The program would benefit from economies of scale by pooling
investments, thus reducing fees and increasing retirement income.
• $3 million start-up cost, but there would be no net-cost to the state, as
participation would cover the costs over time.
VERA participant with employer match
of 3%
$228,568
VERA participant who makes
$25,000/year and contributes
$15/week
$80,811
Median retirement assets for workers
nearing retirement who earn $19$34k/year
$14,000
$0
$50,000 $100,000 $150,000 $200,000 $250,000
Source. WV Center on Budget and Policy
• Remove Assets Limits from TANF and maximize these
funds.
• Refrain for unnecessary budget cuts.
• Index and expand the state minimum wage to cover
more workers.
• Enact a work-sharing program
• Create a job subsidy program to boost labor demand
• Create long-term investment in infrastructure.
The West Virginia Center on Budget and Policy encourages you to reproduce and
distribute these slides, which were developed for use in making public
presentations.
If you reproduce these slides, please give appropriate credit to WVCBP.
The data presented here may become outdated.
For the most recent information or to sign up for
our free E-Mail Updates, visit www.wvpolicy.org
West Virginia Center on Budget and Policy
723 Kanawha Blvd, Suite #300
Charleston, WV 25301
P 304.720.8682 F 304.720.9696