Around 14 million people in the U.S. are jobless today.
Yet, several states, even some that are experiencing economic recoveries, have begun to cut jobless benefits, according to recent data obtained by 24/7 Wall St. This is another example that the unemployment problem has become more insidious.
Federal and state governments use two milestones—26 weeks and 99 weeks—to determine unemployment insurance payments and when they are terminated. The number of people out of work for each of these time periods, or longer, grows.
States with the highest unemployment also tend to have the most financial trouble themselves. This is due to low tax receipts caused in large part by the high unemployment level. People out of work pay little or no taxes. But financial desperation is only one reason for states to decrease jobless benefits.
A second group of states, some of which have begun strong recoveries, has also begun cutbacks. Governors and legislators of these states want to decrease budget deficits both by taking advantages of improved economic positions and through austerity programs for state costs.
24/7 Wall St. examined how the relationship between employment insurance and state finances has begun to change from the ways they operated in the early part of the recession until 2011. We reviewed the just released report on state unemployment law by the National Employment Law Project. The report identifies the states that are reducing their unemployment insurance coverage. The nine that are reducing benefits this year did so by either cutting the number of eligibility weeks or by reducing the payment amount.
Our analysis shows that local governments are choosing to make these reductions for a variety of reasons. Some, like Michigan and Arkansas, are seemingly forced to cut benefits because of ballooning unemployment rates along with struggling local economies. Others, like Illinois and Wisconsin, which are seeing their economies recover and the unemployment rates improve, are cutting also benefits.
All states that have altered their unemployment payment rules, either because of economic weakness or a desire to couple improved tax receipts with austerity, have one thing in common. They are part of a breakdown in a system to support a huge pool of Americans who have not found jobs for months, and may not find them at any time in the foreseeable future.
This is especially true if there is another recession. The decisions by the states affect the extent to which the federal government has to bear the economic burden of the jobless. Recent battles in Washington make it less and less likely that there are nearly limitless funds to support the jobless once they have exhausted their state benefits. In addition to the other weight the jobless carry, they also may no longer be financially supported by governments in a similar manner to the recent past.
This post originally appeared at 24/7 Wall St.
#9: Wisconsin
Unemployment: 7.6%
Total home vacancy: 13.1%
State GDP per capita: $38,912
Key reduction: Waiting a week before benefits
Beginning in January of 2012, there will be a waiting week for unemployed workers in Wisconsin looking to receive unemployment benefits. This means that, despite a person’s eligibility for benefits, they must wait one week before collecting any aid.
Additionally, workers are considered to have “refused suitable work” if they test positive for drugs or refuse to take a drug test. This was passed as part of a bill signed by Governor Scott Walker, which makes another 13 weeks of federal unemployment benefits available to out of work Wisconsinites. Luckily for residents of the state, unemployment is at a relatively low 7.6%.
#8: South Carolina
Unemployment: 10.5%
Total home vacancy: 15.7%
State GDP per capita: $31,378
Key reduction: Benefit weeks reduced to 20
South Carolina’s unemployment rate is the fifth worst in the country, it also has the sixth worst home and rental vacancy in the country. These poor economic conditions indicate why the state has cut the number of weeks residents can collect unemployment benefits from 26 to 20.
In addition to this, companies that operate for 36 weeks consecutively may be designated as seasonal employers, making it so that employees in the off-season not receive benefits. This 36 week period is the longest among all states.
#7: Rhode Island
Unemployment: 10.8%
Total home vacancy: 10.7%
State GDP per capita: $41,816
Key reduction:benefits recalculated, payoffs now average $100 less
Rhode Island has silently crept up the unemployment rate ranks, and now has the third highest in the country, behind only California and Nevada. While the state is performing quite well, the massive unemployment rate has the potential to weigh heavily on the state’s budget, either in the short-term or the long-term.
The state is attempting to reduce the effects in the short-term, at least, by adjusting the way benefit rates are calculated. NELP estimates that this reconfiguration of the system will reduce the average weekly benefits of residents by as much as $100. Workers will also have a longer period of ineligibility for benefits if they quit their job.
See the rest of the story at Business Insider
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See Also:
- June Unemployment By City: The Damage Worsens
- 8 American Chain Retail Stores That Are Still Struggling After The Recession
- U.S. Employers Holding Back On Job Creation
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