'People simply don't bother filing': In some states, under 10% of jobless Americans received unemployment benefits

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The unemployment picture in the U.S. showed some improvement in last week's jobs report. Bucking expectations, hiring rose by 2.5 million in May and the jobless rate declined to 13.3% from 14.7%.

Even so, tens of millions of Americans are still out of work due to the coronavirus pandemic. That's led to unprecedented demand for unemployment insurance benefits over the past few months. Congress has taken steps to make it easier for most people to qualify for unemployment and temporarily beefed up the amount that beneficiaries could receive by $600 per week.

"That olive branch won't last forever," says Scott Colbert, chief economist at Missouri-based Commerce Trust Company: The enhanced benefits that are set to expire in July. And many people who need those benefits have still yet to get them, Colbert adds.

That's because qualifying for unemployment benefits is one thing and actually receiving them is another. Depending on where you live, data shows, it might be more difficult to access those benefits.

States where it's easier to get benefits

Pew Research analyzed data from the Department of Labor and the Bureau of Labor Statistics from March, before state systems were slammed with requests for benefits. From the data, Pew was able to determine where the unemployed were more likely to be granted benefits and where they were not.

Overall, 29% of jobless Americans received benefits in March. But state by state, there was a dramatic difference. For instance, roughly 66% of unemployed Massachusetts residents were able to access benefit payments before the pandemic, according to Pew. In Florida, that number was less than 8%.

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In these states, less than 10% of the state's unemployed workers were receiving benefits in March, according to Pew's analysis:

  • Arizona
  • Florida
  • North Carolina

In these states, more than 50% of unemployed workers were receiving benefits:

  • Connecticut
  • Massachusetts
  • Minnesota
  • New Jersey
  • North Dakota

Experts say that the main reason it's more challenging to access unemployment benefits in some states is because each state runs its own system — there isn't a single, national approach to processing and doling out benefits. 

"Almost all countries have one unemployment system," says Rob Pavosevich. He spent 30 years working at the Department of Labor, most recently as the lead actuary in the Office of Unemployment Insurance until he retired last year. "We're a very unique country — we have this system of state and individual regional systems."

The design of each state's system can affect how efficient and effective it is. "There is no federal standard," Pavosevich says.

Different states, different approaches to unemployment

Modern state unemployment systems work, for the most part, in a fairly straightforward manner. The states collect money through taxes and then pay out benefits to claimants in their states, assuming the claimants meet qualifications.

But after the Great Recession, as unemployment reached near-record lows, some states used the opportunity to tinker with their systems. Some states cut taxes, lessening the amount of money available to pay out to claimants.

"Prior to the current recession and pandemic, many states disinvested from their systems. They cut benefits and threw up barriers," says Melissa Boteach, vice president for income security and child care and early learning at the National Women's Law Center.

Several states cut the maximum duration for which benefits could be paid out as one way to slash benefits. While the majority of states have a 26-week maximum duration, some states, like Florida, cut the limit to 12 weeks. On top of that, some states added requirements that made it harder to qualify, in some cases requiring claimants submit to drug tests or to meet with at least five potential employers per week.

States typically paint these measures as a way to save money and avoid fraudulent claims, Boteach says, adding that making it harder for people to claim unemployment can benefit politicians by keeping the unemployment numbers artificially low.

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How the situation has, and hasn't, changed during the pandemic

The raw numbers can show just how effective these measures can be at keeping people from getting benefits during the pandemic, too. Florida has only processed around half of the 2.4 million unemployment claims it has received since the middle of March, according to a recent report from the Tampa Bay Times. 

Florida governor Ron DeSantis has said that the processing delays stem from flawed and inadequate software systems, which were unprepared for a surge in claimants. Other state officials blame submitted applications that are incomplete, missing key details like Social Security numbers and contact information.

Experts also say the slow response likely persuaded some people to give up before they even applied. In many cases, "people simply don't bother filing for unemployment," says Pavosevich.

Still, Florida has been making progress on its backlog of claims. The state has paid 1.19 million people, or 57.5% of the more than 2 million claims it received between March 15 and June 2, according to the Orlando Business Journal

'We'll all pay the price'

Though the most recent jobs report showed a decrease in the overall U.S. unemployment rate, the economy is still grappling with the effects of the coronavirus pandemic. Last week, there were roughly 1.9 million new unemployment claims nationwide and more than 21 million continuing claims, according to data from the Labor Department.

So it's important to understand how the system works in your state, and what the challenges are, considering that businesses could still lay off or furlough workers in the months ahead. If you do suffer a job loss, gather the information you'll need to file for benefits and contact your state's unemployment office as soon as possible.

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Some states have improved their systems to make sure benefits are processed and paid out more efficiently. "Georgia had cut benefits," Boteach says, "but took steps to bolster its systems" after it became clear how damaging the pandemic would be. In March, Georgia governor Brian Kemp issued an executive order to extend the maximum number of weeks that claimants could receive benefits.

Other states will take a similar approach going forward, Colbert expects, tweaking and adjusting their policies and systems with a "scalpel-type approach" to make sure that jobless residents are getting the support they need.

It's important that the states do what they can to support those without a job, Boteach says. If people can't access benefits, fall into debt, and start to be evicted, have their vehicles or homes repossessed, and so on, it could cause the current economic crisis to become even worse.

"We'll all pay the price," Boteach says. "Unemployed workers especially, but the economy overall." 

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