7 States Hit Hardest by Expiring Unemployment Insurance

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Extended unemployment insurance benefits for approximately 1.37 million Americans are set to expire on December 28. The benefits were extended to the long-term unemployed by the federal government through the Emergency Unemployment Compensation program, which was enacted in June 2008. The program increased the number of weeks for which an unemployed person could claim benefits, from around 26 to as much as 73.

Unemployment insurance programs are mandated by the federal government but are mostly run and paid for by the states, and those governments have some flexibility in setting requirements and payouts for the insurance. The costs for a supplemental, permanent program called Extended Benefits that can add between 13 and 20 weeks of insurance — depending on the state-level situation — are split between the state and the federal governments. The EUC program was fully funded by the federal government and provides additional insurance on top of the normal and Extended Benefits insurance programs.

The program was put in place to serve as a lifeline for those hardest hit by the financial crisis, and its expiration has been a point of political contention during the recent budget battles. Broadly speaking, liberal Democrats want to extend federal funding for the benefits to the tune of about $25 billion, while conservatives don’t believe extending the program is worth the cost.

At the end of the day, unemployment insurance is normally a state issue, and the expiration of the benefits will affect each state differently. Here are some of the states that will be most severely affected. The data were compiled by The Wall Street Journal.

1. Pennsylvania

Pennsylvania’s headline unemployment rate didn’t spike as severely as some other hard-hit areas, but people in the state have had a lot of trouble finding work once they have been laid off. There are 86,434 people receiving benefits through the Emergency Unemployment Compensation program, equal to 1.34 percent of the civilian labor force.

2. California

California actually has the most people on extended benefits of any state, at 253,465, but comes in sixth for the number of people on extended benefits as a share of the labor force, at 1.36 percent. Overall unemployment in California surged more dramatically than nationwide unemployment in the wake of the crisis and remains elevated relative to the national level even today.

3. Connecticut

Connecticut’s unemployment rate didn’t increase as dramatically as national-level unemployment did in the wake of the crisis, but it has declined at a slower rate. As of November, Connecticut had a 7.6 percent headline unemployment rate compared to 7 percent for the nation at large. There are 25,175 people in Connecticut receiving benefits under the EUC program, or 1.36 percent of the labor force.

4. Georgia

Georgia is one of the states that was hit hard by the crisis and has had a hard time recovering. Unemployment increased above the national average and has remained there since 2007. The state has 66,729 people receiving supplemental unemployment benefits, or 1.4 percent of the labor force.

5. Alaska

If you only looked at the headline unemployment figure, you could be tricked into thinking that Alaska weathered the financial crisis without any serious harm. However, with 5,424 people receiving supplemental unemployment benefits, 1.49 percent of Alaska’s workforce will have the safety net pulled out from beneath them.

6. Massachusetts

Until recently, Massachusetts was another state where headline unemployment rested comfortably below the national average. However, as of November, the unemployment rate in the state was 7.1 percent, above the national average of 7 percent. The state currently has 55,048 people, or 1.58 percent of its labor force, receiving supplemental unemployment insurance.

7. New Jersey

New Jersey has suffered from above-average unemployment for most of the pre-crisis period. As of November, the state had a headline unemployment rate of 7.8 percent, which compares to the national average of 7 percent. New Jersey has 84,048 people, or 1.84 percent of its labor force, on emergency unemployment insurance.

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