Unemployment rate keeps improving, but labor force participation is another story

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Even with a historically low unemployment rate, West Virginia is trying to encourage more workers to fill available jobs.

The state’s seasonally adjusted unemployment rate hit 3.7% last week. The unemployment rate reflects people actively looking for work. Those who have stopped searching stop being counted.

At this rate, West Virginia has passed what economists widely consider full employment, that is, a minimum number of involuntarily unemployed workers.

But West Virginia continues to struggle with a separate economic measure, the activity rate.

This rate, which measures the total number of employees plus those looking for work relative to the state’s overall population, has increased somewhat, but is still around 55% for West Virginia. Nationallythe activity rate is 62.4%.

Scott Adkins

“Employers are desperate and driving up wages,” said Scott Adkins, head of Workforce West Virginia, the state employment agency. “We just have to get people off the couch and into jobs.”

West Virginia had 50,000 Jobs last January, Adkins said.

“There are a lot of jobs there,” he said. “We hear it. We see signs in every community as you travel through West Virginia.

Jobs remain plentiful in hospitality, recreation and state government, Adkins said, speaking at a briefing today. “We are having difficulty, even within the state government, in recruiting and retaining state workers,” he said.

Adkins said 30% of graduating seniors don’t have a career plan, “meaning they don’t go to higher education, they don’t go to community and technical school, they don’t have employment, they do not join the military.

“So we have to, as a workforce development system, work extremely hard and work smart to get those 16 to 24 year olds, 30% of those high school graduates, into a solid career path.”

Brian Lego

West Virginia’s labor force participation rate has been troubled for decades, said Brian Lego, economic forecaster at West Virginia University’s Bureau of Business and Economic Research.

“If you have a large percentage of those in your eligible workforce who aren’t participating in this capacity, you’re going to be left on the sidelines for companies that need to find eligible employees to grow their business or that potential businesses come and set up shop in your area,” he said. “So that’s going to be a barrier.”

He noted that people have a variety of reasons for not participating in the labor market. Some might be stay-at-home parents, some might be in school, and some might be retired.

“It’s the other factors contributing to our low labor force participation rate that can create problems,” Lego said on MetroNews’ “Talkline” today.

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