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Charlotte Amalie
Wednesday, August 10, 2022
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V.I. Answer Desk: Why Can't St. Croix Get Benefits Based on Its Own Jobless Rate?

A reader asks why the U.S. Virgin Islands averages the unemployment rates between the two districts for the purpose of applying for federal unemployment insurance funds, when unemployment on St. Croix is much worse than on St. Thomas.

A major federal tax-cut extension signed recently by President Barack Obama extends unemployment benefits for an additional 13 months, maintaining the current extended benefit limits, which range from 60 weeks of benefits in states and territories with less than 6 percent unemployment to 99 weeks in states and territories with unemployment greater than 8.5 percent.

With unemployment hovering at 9.5 percent on St. Croix, but a relatively mild 7.1 percent on St. Thomas, the reader objected to the V.I. Labor Department averaging the two rates, to come out with a territorial rate below the 8.5 percent threshold and so lose out on millions of dollars in extended unemployment insurance benefits.

To find out the answer, the Source first contacted the V.I. Department of Labor, which oversees unemployment insurance. But the V.I. Government is closed all week for inauguration festivities and the Crucian Christmas Festival. The second avenue was to look at the actual congressional act extending the benefits to seek answers.

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St. Croix cannot be split off from St. Thomas to qualify separately for extended unemployment benefits because the federal act specifies a state or territorial unemployment rate threshold. It does not permit states to partially qualify and partially not-qualify.

Some city officials, such as Newark, N.J., Mayor Cory Booker, have chafed against the use of a statewide figure as well, arguing it unfairly harms residents of cities with very high unemployment rates that are within states that come out just below the threshold. And a number of senators tried to change the threshold in the recent legislation for that very reason, according to articles in the Washington-based newspaper The Hill and elsewhere. Those efforts were unsuccessful and the legislation passed in late December included a statewide unemployment rate threshold.

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