RECENTLY, it was reported that the unemployment rate in West Virginia dipped to 4 percent, the lowest on record.
It is important to ask three questions: Is it accurate? What does it mean? Does the information matter?
The accuracy of unemployment rates has been a contentious issue. Methods used by the federal and state data collectors are not identical, which contribute to varying sets of numbers. In addition, data are typically based on those seeking work at one-stop centers and telephone polling. Many West Virginians gave up long ago going to regional employment offices, and those who are unemployed often do not have phones. Thus, since the data are collected the same way monthly, they are mainly useful in a comparative sense. Many economists routinely double or triple the reported numbers to gain a realistic sense of accuracy.
The meaning of unemployment can also be subject to misinterpretation. Basically, a job is counted as a job even if the individual lost a union job with benefits and picked up a part-time job at minimum wage. Obviously, this situation creates two quite different incomes and creates two quite different impacts on the economy. Since jobs in West Virginia are migrating toward part-time minimum-wage jobs at the expense of manufacturing and mining jobs, the economy is sliding downward, even though this is not reflected in the unemployment rate.
A related factor that is seldom measured is underemployment. If West Virginians who are experienced, trained or educated to do jobs that could pay well are instead relegated to low-wage jobs, the economy is either sliding downward or not performing at its potential capacity.
The question about relevance can be answered both yes and no. Agencies such as the Appalachian Regional Commission that peg programs to such information immediately yanked counties from certain levels of eligible funding, since prosperity was apparently at hand.
In reality, there is no relationship between the level of unemployment and whether people can live on what they make. A worker who is part-time and earns minimum wage may be statistically employed but not be able to have a sustainable life.
If one earned minimum wage and worked a full week, it would take one day to pay for gasoline and two and half days to keep a roof over one’s head. This leaves a day and a half for food, clothing, utilities, medicine and other necessities — which is an impossibility. Food prices, for example, are soaring. The Associated Press reports that the average family of four is spending anywhere from $7 to $10 extra a week and food pantries are reporting major increases in the number of visitors.
Unemployment data are more than misleading. They are misrepresentations that politicians can use to try to show something is being done when in fact the situation has become worse.
In addition, we have become a state where most citizens struggle for sanity and survival — and the state is hitting those who have the least with nickel-and-dime taxes and fines. Every town and county has thousands upon thousands of unpaid tickets with multiple court costs tagged on. More and more West Virginians have lost their drivers’ licenses due to unpaid fines for minor violations. More and more West Virginians buy lottery tickets or play the slots with the false hope that it will be their turn for a major score. And West Virginia continues to rely heavily on a regressive sales tax that taxes low-income citizens on every dollar earned because every dollar is spent.
As people realize that something is wrong with the storyline, desperate actions become options. Copper is stolen with considerable risk. Catalytic converters are sawed off newer vehicles during early morning hours. Fentanyl patches, hydrocodone pills and meth became options that are used as opportunities to forget tomorrow. Bizarre robberies suddenly multiply.
In a nutshell, the unemployment rate information is nothing more than “A Deceptive Truth.” The goal to achieve quality economic development for the benefit of everyone in West Virginia is still a major challenge before us.
David, a professor at WVU-Tech, is a Gazette contributing columnist.
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