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Policy Choices Can Help Out-of-Work Families During This Recession and Set Virginia on a Better Course

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From the Commonwealth Institute for Fiscal Analysis:

Policy Choices Can Help Out-of-Work Families During This Recession and Set Virginia on a Better Course

As Virginia policymakers consider how to respond to high levels of job losses and rebuild the economy, it will be critical to make sure that the state prioritizes the needs and voices of workers and families who face the greatest barriers and have been hardest hit by the current downturn.

Most immediately, Virginia policymakers should make sure that no one has to choose between protecting their own health and that of their community and putting food on the table, paying rent, or having health coverage. This means urgently providing additional help to families to replace income and health insurance that have been lost due to the need to shut down businesses and physically distance. While the federal government can and should do more, these are some of the ways that Virginia policymakers can also act to better support Virginia families:

  • Reduce the impact of loss of employer-provided health insurance due to job losses by expanding access to health coverage:
    • Cover COVID-19 screening, testing, and treatment in emergency Medicaid.
    • Broaden access to Medicaid by removing the 40 quarters barrier and improve access to care within Medicaid by raising provider reimbursements and extending dental coverage to adults.
  • Increase emergency and cash assistance for families who have lost jobs and may struggle to find new employment:
    • Address gaps in state and federal assistance for families, particularly for immigrant workers who are left out of many federal programs.
    • Continue to strengthen Temporary Assistance to Needy Families (TANF) cash assistance for families with very low incomes who may not be able to find a job or face barriers to employment.
  • Strengthen the Virginia unemployment compensation system so that it can better meet our communities’ needs when federal improvements expire.


Reduce the impact of loss of employer-provided health insurance due to job losses by expanding access to health coverage
Virginia’s expansion of Medicaid in 2018 was a step in the right direction, and over 400,000 people in Virginia have now gained coverage due to that expansion. With many Virginians likely losing their employer-sponsored health insurance due to job losses, policymakers should further reduce barriers to public health coverage through Medicaid for those who need it. The enrolled budget that was passed by the legislature in March included funding to remove the “40 quarters” barrier to Medicaid for certain lawfully present immigrants, but this funding was “unallotted” during the reconvened session, putting this coverage expansion on hold at just the moment when it is most needed. Similarly, new funding for dental benefits for adults who have health insurance through Medicaid was unallotted, even though untreated dental problems can lead to serious complications and reduced ability to work. During an upcoming special session, policymakers should restore this coverage. And the Northam administration can act even sooner to improve access to COVID-19 screening, testing, and treatment by clarifying that emergency Medicaid can be used for those services.

Increase emergency and cash assistance for families who have lost jobs and may struggle to find new employment
Policymakers should also address gaps in state and federal assistance for families who are struggling to pay bills and put food on the table. One area where Virginia has done well is using available federal flexibility to help families through the SNAP (food assistance) program. The federal “Families First” relief package allowed states to boost SNAP to meet rising need, allow families who are missing school meals to receive an electronic supplement, and reduce administrative red tape. Virginia has made the responsible choice to use this federal flexibility to help struggling families. Virginia has also applied to allow families who are receiving SNAP to use the same online purchasing options as other Virginians (delivery costs cannot be paid with SNAP).

Many Virginia families who are newly out of work are receiving (or are eligible to receive) increased unemployment insurance benefits through the federal CARES Act until July 31, and some self-employed Virginians and independent contractors who would otherwise be ineligible for unemployment insurance may qualify for benefits through December 2020. And most Virginia families have or will receive a federal tax rebate of $1,200 per adult and $500 per child dependent under age 17 to help with paying bills and to stimulate the economy. However, many immigrant and mixed-status families are left out of this help, and many other forms of public aid, despite paying into the unemployment insurance and income tax systems. During the current health emergency when physical distancing requires many people to stay home, Virginia state and local policymakers should do all they can to put money in the pockets of unemployed workers and families who have been left out of federal assistance. Options to do so include an unemployment insurance-like system for those eligible for other unemployment insurance as has been done in Oregon, a cash grant as has been done in California, or a state tax rebate for tax filers who use an Individual Taxpayer Identification Number (ITIN) and therefore were left out of the federal tax rebates. Additionally, policymakers should make sure that families are protected from eviction during the current crisis and that local sources of direct assistance, such as food banks, have sufficient resources. These measures will help non-essential workers be able to stay safely at home and will help Virginia families stay afloat.

The TANF cash assistance program for low-income families with children helps a far lower share of very low-income families than before the “welfare reform” changes of the 1990s. Enrollment in TANF actually fell slightly between 2007 and 2013 even as poverty increased. During the most recent regular legislative session, policymakers approved a 15% increase in income limits and cash assistance for TANF, which should help the program better respond to the rising needs of families during this recession. Unfortunately, the general funds to also increase benefits for two-parent families through TANF-UP were “unallotted” during the reconvened session; these funds should be restored so that two-parent families receive the same help during times of need as one-parent families. And policymakers should use any available TANF trust funds to further raise income limits and cash assistance.

Strengthen the Virginia unemployment compensation system so that it can better meet the state’s needs when federal improvements expire

Looking slightly longer term, it is likely that job losses and difficulty finding new employment will extend well beyond the arbitrary deadlines for the federal unemployment insurance improvements. Unless policymakers act to improve Virginia’s unemployment system, it will be inadequate to meet the continued needs of the commonwealth once the federal improvements expire. As of 2019, the Virginia unemployment insurance system only provided help to 15% of unemployed workers in the state, well below the national average of 28%, and regular unemployment benefits in Virginia are capped at $378, which is just 27.5% of average weekly wages in Virginia. State policymakers can act to lift the maximum unemployment benefit to help families be better able to make ends meet once the federal boost has expired, and can also remove barriers to increase the share of unemployed workers who receive unemployment insurance. In order to be prepared for when the federal improvements end, Virginia policymakers should also explore whether the state should establish an unemployment insurance system for working people who are left out of the traditional system, including self-employed workers, independent contractors, those seeking part-time work, and those without federal work authorization.

Improvements to unemployment insurance, food assistance, and cash assistance will all help to rebuild the economy as well, since low-income families are more likely to immediately spend that money on food, car repairs, and other necessities in their local communities, while higher-income families may bank any assistance they receive.

Rebuilding for a more equitable future economy
Supporting struggling families to stay afloat is important, and it’s also important to continue to advance toward becoming a commonwealth where every family can thrive. As policymakers consider how best to invest in rebuilding the economy, there is the opportunity to rebuild in a way that will advance equity and opportunity for families and communities of color that have too often been deliberately excluded or targeted by past public policies.

Because people are the experts in their own lives, as policymakers consider what public policies should be pursued to advance equity and opportunity, they should follow the leadership of people and organizations who are deeply rooted in communities that currently face barriers to opportunity. And the policy needs may be diverse — Black communities in rural Southside likely have very different needs than undocumented Latinx communities in the shadow of Amazon’s new East Coast headquarters. As those conversations unfold, options for revising Virginia’s current policies include removing barriers to collective bargaining, creating a Virginia overtime law, stronger enforcement of existing anti-discrimination and labor laws, “banning the box” that requires disclosure of criminal history on job applications, investing in small businesses in communities that have been left out, removing zoning barriers to affordable housing, and creating (truly) affordable rental and homeownership opportunities in areas with educational and economic opportunity.

Virginia did not arrive at the current situation overnight, and it didn’t happen by chance. Public policy choices to suppress union organizing, the state’s failure to vigorously enforce laws against wage theft and worker misclassification, encourage or (later) ignore employment discrimination and occupational segregation, and (until recently) refuse to increase Virginia’s minimum wage above the low federal minimum have contributed to the precarious employment experiences and low wages that many Virginia workers, especially Black and Latinx workers, faced before the current public health crisis. Coupled with a stingy safety net system, this has left many families of color in Virginia particularly vulnerable during the current crisis and likely long upcoming period of economic difficulty. The good news is that Virginia policymakers can use new public policy decisions to assist Virginia families who are struggling to make ends meet and rebuild the economy in a more equitable way.

— Laura Goren, Research Director

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Learn more about The Commonwealth Institute at www.thecommonwealthinstitute.org