FinancialRegulatory

Report: States Are Rapidly Draining Their Unemployment Funds

April 20, 2020 / Alexandra Sternlicht, Forbes Staff

TOPLINE

As jobless claims surged last week to 22 million nationwide, nearly half of all states have reported double-digit percent losses to the cash reserves they use to pay unemployment claims, according to a new analysis by the Wall Street Journal, raising the possibility that states may need a federal bailout in order to help keep the unemployed afloat.

KEY FACTS

  • Nearly 50% of states including California, New York and Massachusetts have drained almost half of their total trust fund reserve in funding unemployment payments for those out-of-work due to the coronaviru pandemic, per WSJ.
  • With unemployment rising week over week, states could run out of money and need loans from the federal government, say economists.
  • While the federal stimulus package pays for an additional $600 per week for those who are out of work due to the crisis,, states still pay the pre-coronavirus unemployment rate to residents who have filed jobless claims. 
  • New York had one of the steepest declines in cash reserves and has requested  a $4 billion no-interest loan from the federal government in order to pay unemployed residents. 
  • Only six-percent of Florida residents who filed jobless claims have so far received checks, reports CBS Miami.
  • The Wall Street Journal arrived at this conclusion by crunching Treasury Department data.

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Josh Sandberg

Josh Sandberg is the President and CEO of Ortho Spine Partners and sits on several company and industry related Boards. He also is the Creator and Editor of OrthoSpineNews.

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