Unemployment in the United States has steadily improved over the past six and a half years. The unemployment rate today is half its mid-recession peak, and non-farm payroll employment has increased for more than 60 straight months.
Despite the lower unemployment rate, millions of Americans still continue to search for work without luck. To support themselves and their families, many apply for unemployment insurance while they remain out of work.
Unemployment is far from an ideal situation, but the prospects for out-of-work residents depend a great deal on where they live. In North Dakota, which has a very healthy job market, nearly 75% of the jobless workforce receives benefits — at an average of $520.64 weekly. In Louisiana, where work is generally harder to come by, just 13.5% of the unemployed population receives benefits — at an average of $217.64 weekly.
Based on employment growth, unemployment rates, the proportion of jobless residents receiving UI benefits, and the average weekly UI payment, 24/7 Wall St. reviewed the best and worst states to be unemployed.
In no state does the entire unemployed population receive unemployment insurance. A state’s recipiency rate, or share of the unemployed population receiving UI benefits, depends on a number of factors and varies greatly from state to state. In Florida, the recipiency rate is just 10.2%, while in North Dakota it is 74.0%, the highest share.
Recipiency depends on a number of factors, such as the state’s UI eligibility requirements, state and federal funding, and the public’s awareness about UI programs. In an interview with 24/7 Wall St., Claire McKenna, senior policy analyst at the National Employment Law Project, explained that more restrictive UI programs tend to have fewer unemployed residents who receive benefits. “In states that have reduced benefit amounts and duration and that have restricted eligibility, we have seen reductions in recipiency,” she said.
States determine the amount a worker receives in benefits based on a proportion of the wages earned at his or her last job. The higher the lost wages, the higher the stipend. However, states also set a maximum amount for how much can be doled out on a weekly basis, ranging from $679 in Massachusetts to just $221 in Louisiana, the highest and lowest benefit amounts respectively. The maximum set in each state appears to also have a direct impact on the average benefit amount. All 10 of states with the lowest average weekly payments also have among the lowest maximum weekly benefits set.
For those who are unemployed, just as important as the benefits are the chances of finding a job before benefits run out. While not a perfect measure, the unemployment rate can be a rough indication of these chances. In states with higher unemployment rates, job seekers will likely have a harder time finding work. The same is true in states where employment is declining meaningfully. On the other hand, in states with low unemployment and healthy job growth, the prospects are likely better for the unemployed.
Many of the worst states to be unemployed in today made drastic cuts to their UI schemes in the aftermath of the Great Recession. Since 2011, a number states have cut the maximum durations people can receive unemployment benefits. North Carolina, for example, reduced the maximum number of weeks a recipient could stay on UI from 26 to just 13 weeks. “A number of states favored benefit reductions and eligibility restrictions at the expense of sensible financing reforms,” McKenna said. As a result, in every state that cut benefits availability by more than one week the recipiency rate declined significantly.
To identify the best (and worst) states to be unemployed, 24/7 Wall St. generated a rank comprised of four measures: the most recent unemployment rate, the unemployment insurance recipiency rate, the average weekly benefit amount as a percentage of the average weekly wage in the state, and the one-year job growth rate. Unemployment rates, non-farm payroll employment figures, and the average duration of unemployment came from the Bureau of Labor Statistics. The recipiency rate, the proportion of recipients who exhaust their benefits before leaving UI recipiency, average weekly benefits, average benefits duration, initial claims to receive benefits, and total recipients came from the U.S. Department of Labor. Average weekly wages, used to calculate the replacement rate — the average share of UI recipient lost wages covered by benefits — came from the BLS. All data are for the most recent period available.
These are the best (and worst) states to be unemployed.