During the Great Recession, the U.S. unemployment rate reached double digits, triggering government aid programs to help those seriously affected. The labor market has much improved, and the unemployment rate fell to 7.9% in October, but 12.3 million active job seekers remain unemployed in the U.S. Approximately 5 million of those, or 40%, are defined as long-term unemployed, meaning they have been out of a job for at least 26 weeks.
Most states provide 26 weeks worth of unemployment benefits to those who have lost their jobs. During the recession, Congress extended the benefit through the Emergency Unemployment Compensation program and Extended Benefit program, although the extended benefit program has been curtailed in 2012. Together, these programs provide up to 99 weeks of benefits for the unemployed.
While Congress has extended these programs repeatedly, payments could stop at the end of this year, cutting off insurance for 2 million people, according to the National Employment Law Project. 24/7 Wall St. reviewed the 10 states where the most people would lose unemployment benefits.
The cost for extending federal unemployment insurance for one year would cost about $30 billion, according to George Wentworth, a senior staff attorney with NELP. However, a $1 spent on these benefits, he notes, generates between $1.60 to $2 in economic activity.
“Unemployment insurance is always one of the most dynamic stimulus initiatives you can implement,” Wentworth said in an interview. “People who receive unemployment insurance invariably put it right back into the economy.”
A majority of the states with the most residents on the verge of losing benefits are naturally among the most populous states. However, some of the less populous states on this list have disproportionately high numbers of people standing to lose unemployment benefits compared to their population, while other very populous states have a comparatively low number.
New Jersey has the third-most people poised to lose unemployment benefits, although the state isn’t even among the ten-most populous states. Meanwhile, while Texas is the second-most populous state, it is just seventh among states with workers that will lose benefits.
In general, the states on this list suffer from high unemployment. All but one state had a higher unemployment rate in October than the national rate of 7.9%. Six states had among the ten highest unemployment rates in the country. California, the state with the most people that stand to lose benefits, had the third-highest unemployment rate in the country in October, at 10.1%.
Based on data provided by NELP, 24/7 Wall St. identified the ten states with the most workers that stand to lose unemployment benefits after the week of December 29th, 2012. We included in our analysis state unemployment rates from October, compared to 12 months prior. All unemployment data came from the U.S. Bureau of Labor Statistics. We also considered a state’s population for 2011, from the U.S. Census Bureau.
These are the 10 states with the most people about to lose unemployment benefits.