Percent of jobless workers receiving unemployment checks reaches record low

 

How many jobless workers receive an unemployment check? A whole lot less than most Americans assume is the case.

 

The Economic Policy Institute is reporting that the proportion of jobless workers receiving unemployment benefits from state programs fell to a record low of 23.1 percent in December 2014—below the pre-Great Recession record low of 25.0 percent in September 1984.

Due to the expiration of federal emergency unemployment benefits at the end of 2013, jobless individuals were solely dependent upon state Unemployment Insurance programs for support in 2014. While state UI benefit recipiency rates overall have declined due to the improving economy, these state programs in most cases failed to assist the majority of short-term jobless workers.

A new report by EPI, a labor-backed research group, focuses special attention on those states, including Michigan, that have cut their maximum jobless benefits below the long-accepted norm of 26 weeks.

Those who have dropped out of the labor market have received considerable attention, as the employment-to-population ratio for those ages 25 to 54 remains at just 77 percent, compared to nearly 80 percent prior to the Great Recession of 2008-10. But those who now suffer from layoffs and deal with joblessness for up to 26 weeks often find that they are not fully eligible for UI benefits.
A key reason for low benefit eligibility is that states failed to adequately fund their UI trust fund accounts during the relatively good economic times of 2001-07. That set the funds up for insolvency when the Great Recession hit and some states responded by tightening up or cutting back.

The study of UI recipiency rates found that:

* Since 2011, nine states have cut maximum durations of unemployment benefit recipiency: Arkansas, Florida, Georgia, Illinois, Kansas, Michigan, Missouri, North Carolina, and South Carolina.

* Eight of these states have experienced faster-than-average declines in their short-term recipiency rates.
* In 2014, four of the largest states  -- Florida, Georgia, North Carolina, and Virginia -- ranked in the bottom 10 in short-term (less than 26 weeks) recipiency rates. Michigan, which cut its UI maximum to 20 weeks, ranks 27th, with just 31 percent of  the short-timers receiving UI benefits.
* The proportion of the short-term jobless receiving an unemployment check in 2014 ranged from14.8 percent in South Carolina to a high of 65.7 percent in New Jersey.

As the chart below shows, the economy has failed to keep pace with the growth in population and the labor force that a gap of about 5.6 million jobs remains.