Despite historically high unemployment rates, governors and legislatures across the country are moving to reduce the length of time unemployed workers can receive benefits. This is the result of concerns that states may need to increase taxes on employers to reinforce unemployment trust funds exhausted by the jobless benefits.
According to the Department of Labor, over eight million Americans are drawing unemployment. Each state establishes and administers its own unemployment benefit levels. The initial benefits, usually 26 weeks, are paid by states, largely from employer taxes.
In Massachusetts, the current unemployment rate permits 26 weeks of state benefits for the unemployed. The state determines the total benefit for each individual based on his earnings. Recently however, there has been a trend in some states to reduce the length of time during which the unemployed can receive benefits. In March, Michigan became the first state to reduce the basic 26 weeks of state-paid unemployment benefits to 20 weeks for the newly unemployed, starting next year. Missouri also reduced the initial state-paid benefits to 20 weeks for the newly unemployed, starting immediately.
In Florida, where the unemployment rate is 11.1%, the Republican-dominated legislature recently passed a law reducing maximum state benefits from 26 weeks to 23 weeks, with fewer weeks available when the unemployment rate falls below 10.5%.
Because the Department of Labor does not issue such an estimate, it is unclear exactly how many people have seen their benefits run out while they remain jobless. Unfortunately, this number will undoubtedly increase, as states continue this trend of decreasing the length of their unemployment benefits.
Photo credit: Microsoft
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