Economy

7 States Cut Unemployment Insurance, Costing Jobless Workers Federal Benefits Too

A combination of federal and state unemployment insurance programs kept 2.3 million Americans out of poverty in 2011, mitigating some of the negative effects the Great Recession had on jobless workers. But even as unemployment remains stubbornly high, several states are taking the axe to their unemployment programs, and the result is that recipients are losing federal unemployment insurance too.

Seven states have reduced the length of their unemployment programs from 26 weeks, the standard since the 1950s, by as much as 14 weeks, according to a new policy paper from the National Employment Law Project. But because federal benefits depend on the number of weeks offered at the state level, those cuts are also costing workers access to the federal program. In those states, five of which have unemployment rates higher than the federal level, those cuts are costing individual recipients as much as $5,000, according to NELP:

The average jobless worker has been unemployed for 35 weeks, and 40 percent of unemployed workers have been out of a job for at least 27 weeks, meaning the cuts will hammer large numbers of the unemployed in these states. While opponents of unemployment insurance decry the “culture of dependency” the program creates, research shows that recipients work harder to find a new job than those who don’t have access to the program.

America’s unemployment program, stingy as it is, also has benefits for the economy: the Congressional Budget Office estimated that failure to extend the federal program at the beginning of the year would have cost the country 300,000 jobs.