Written by: Stephanie King
As the global economy continues to take a deeper plunge toward the bottom, unemployment rates are continually rising to its highest in decades. With the massive amount of company layoffs in the past couple months, it is not surprising that filing for first-timer unemployment benefits have increased dramatically from 62,000 to 589,000 in one week of January alone. More than 2.6 million jobs have been lost in just 2008 alone, a record high since 1945. Unemployment rates have been reported by the U.S. Department of Labor to have increased in all 50 states for the first time in history since 1976.
As these unemployment numbers continue to increase, so will the number of filings for unemployment benefits; gradually decreasing funds for states. Indiana, New York, South Carolina, Ohio and Michigan are borrowing funds from the federal government to pay for these benefits due to insolvency. As the unemployed continue to receive benefits, the states are suffering. It is estimated that 13 states are at "major risk" of insolvency that will leave them with about eight more months or less of funds to provide benefits. These states include: New Jersey, California, Kentucky, Missouri, Wisconsin, North Carolina, Rhode Island, Arkansas, Pennsylvania, Idaho, Minnesota, Connecticut and Illinois. Wisconsin is predicting that the state’s unemployment benefits reserve will be used by February. With the shortage of funds in these states continue to occur, states will make it harder for filers to collect these unemployment benefits. Therefore, potentially will raising the minimum earnings needed to qualify, disqualifying a large number of people, such as part-time or temporary workers.
President Barack Obama’s push to pass the $825 billion stimulus package will be able to provide some relief for these states to cover some of the interest from these federal government loans. It is believed that this package will help create three to four million jobs. Although, some critics argue that it will not be enough to bring back the economy to life and aid these states to continue helping the unemployed.