10 states hardest hit by unemployment crunch

Unless Congress extends benefits once again, hundreds of thousands of long-time unemployed Americans will stop getting unemployment checks. These are the states with the most residents facing the cutoff.

By 247 Wall St. Dec 5, 2012 3:18PM

 Image: Unemployment line up © BananaStock/SuperStockBy Samuel Weigley, 24/7 Wall St.


During the Great Recession, the U.S. unemployment rate reached double digits, triggering government aid programs to help those seriously affected. The labor market 24/7 Wall St.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. During the recession, Congress extended the benefit through the Emergency Unemployment Compensation program and Extended Benefit program, although the latter has been curtailed in 2012. Together, these programs provide up to 99 weeks of benefits for the unemployed.


At 24/7 Wall St.: The best and worst run states in America


While Congress has extended these programs in the past. Payments could stop at the end of this year unless it acts again, 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.


Extending federal unemployment insurance for another would cost about $30 billion, according to George Wentworth, a senior staff attorney with NELP. However, each $1 spent on these benefits, he said, generates between $1.60 and $2 in economic activity.




A majority of the states with the most residents on the verge of losing benefits are among the most populous states, but not all. Some of the less populous states have disproportionately high numbers of people standing to lose unemployment benefits compared to their population, while some very populous states have a comparatively low number.


In general, the states on this list suffer from high unemployment. All but one had a higher unemployment rate in October than the national rate. Six states had among the 10 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 10 states with the most workers who stand to lose unemployment benefits after the week of Dec. 29. 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.


At 24/7 Wall St.: America's poorest states


These are the 10 states with the most people about to lose unemployment checks.


 1. California


·         Number to lose benefits: 362,800


·         Population: 37,691,912 (the highest)


·         Unemployment rate: 10.1% (3rd highest)


California, like other Western states such as Nevada and Arizona, was hit especially hard by the housing downturn, which contributed to higher unemployment. California is also one of just three states with unemployment above 10% -- more than three years after the official end of the recession. A study published in early 2012 by economists at University of California-Los Angeles noted that California’s unemployment rate is expected to remain above pre-recession levels until 2016, according to the Los Angeles Times. The good news for California residents is that jobs will come back to the state at a faster rate than the country as a whole, led by a strong technology sector in Silicon Valley.


2. New York


·         Number to lose benefits: 204,100


·         Population: 19,465,197 (3rd highest)


·         Unemployment rate: 8.7% (11th highest)


New York’s unemployment rate from October 2011 to the following year grew a national-high of half a percentage point, while the rate was falling in most states. Because unemployment has been rising in the state, out-of-work New Yorkers are entitled to an additional 20 weeks of extended benefits along with the traditional emergency unemployment compensation. But those benefits will lapse along with the traditional benefits if Congress doesn’t extend unemployment insurance.


3. New Jersey


·         Number to lose benefits: 119,600


·         Population: 8,821,155 (11th highest)


·         Unemployment rate: 9.7% (4th highest)


The nearly 120,000 New Jerseyans who will be cut off from unemployment insurance is particularly high given that the state is even among the nation's top 10 in terms of population. The state’s unemployment rate of 9.7% in October 2012 is up from 9.3% at the same time last year. The administration of Gov. Chris Christie has questioned the validity of the unemployment figures, especially when the number of jobs has increased by 50,000 in the last year. While the unemployed continue to face hardship, New Jersey is trying to help. It was the first state to enact a law that banned job advertisements discriminating against the unemployed.


4. Pennsylvania


·         Number to lose benefits: 115,300


·         Population: 12,742,886 (6th highest)


·         Unemployment rate: 8.1% (20th highest)




5. Georgia


·         Number to lose benefits: 114,800


·         Population: 9,815,210 (9th highest)


·         Unemployment rate: 8.7% (10th highest)


Due to federal changes to unemployment insurance, Georgians were only eligible for about 54 weeks of unemployment insurance in October 2012, just over half of the 99 weeks available in the same month last year. Since the unemployment rate fell below 9% in April and May, some unemployed Georgians had their benefits cut at the time. However, last month the state’s Department of Labor notified approximately 13,000 unemployed Georgians that up to 10 weeks of additional unemployment benefits would be available since the unemployment rate for each of the summer months was at least 9%.


At 24/7 Wall St.: The 12 companies paying Americans the least


6. Florida


·         Number to lose benefits: 113,900


·         Population: 19,057,542 (4th highest)


·         Unemployment rate: 8.5% (14th highest)




7. Texas


·         Number to lose benefits: 110,400


·         Population: 25,674,681 (2nd highest)


·         Unemployment rate: 6.6% (16th lowest)




8. Michigan


·         Number to lose benefits: 92,900


·         Population: 9,876,187 (8th highest)


·         Unemployment rate: 9.1% (6th highest)




9. Illinois


·         Number to lose benefits: 88,800


·         Population: 12,869,259 (5th highest)


·         Unemployment rate: 8.8% (9th highest)




10. North Carolina


·         Number to lose benefits: 77,100


·         Population: 9,656,401 (10th highest)


·         Unemployment rate: 9.3% (5th highest)




At 24/7 Wall St.: Nine beers Americans no longer drink