CHARLESTON, W.Va. -- We're used to hearing bad economic statistics about West Virginia and bad comparisons to other states, but when it comes to unemployment insurance, we're actually ahead of the pack.
By Sept. 2010, 32 states had to borrow money from the federal government to the tune of almost $40 billion when their unemployment insurance systems went bust. West Virginia is one of the few, and the only one among surrounding states, to avoid that fate so far.
That's good for business, since employers in states with outstanding federal loans can face higher increased federal unemployment tax expenses.
Part of the reason the state has so far been able to avoid insolvency is due to smart legislative action taken in 2009. When it became clear that the fund's solvency was threatened, Gov. Manchin and the Legislature worked to pass a bill that raised the taxable wage base for unemployment insurance premiums from $8,000 to $12,000.
Part of the problem at the time was the Great Recession, which would eventually more than double the state's unemployment rate, which had been well below the national average.
But part of the problem was also that the rate of employer-paid premiums for the fund had been stuck at the same level since 1981, even though wages had increased since that time and the maximum unemployment benefit had grown by 119 percent over nearly 30 years.
This was in effect a structural problem in the system that waited like a ticking time bomb for a major recession, which eventually came to pass.
The reforms of 2009 bought the fund and the state's jobless workers some time, but they weren't enough to completely eliminate the problem. According to Workforce West Virginia, current projections show that the fund will come dangerously close to insolvency in March of 2011.
Fortunately, there is a way to avoid that outcome. West Virginia can join the 33 states -ranging from deep red to dark blue - that have changed their unemployment system by modernizing it to reflect the current workforce.