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Unemployment benefits: What state has the best payments?

With unemployment benefit amounts ranging widely across states, many are left asking which states provide the “best” benefits for out-of-work Americans.

Joe Biden speaks about jobs and the economy at the White House in Washington, April 7, 2021.

Identifying which state provides the “best” benefits is not an easy question to answer and depends heavily on what one defines as “best.” We took a look at three factors: size of the benefit, cost of living, and eligibility period to compare benefits across the states.

Who receives the largest checks?

Each month the US Department of Labor releases data on the number of unemployment benefits claimed in all states and the District of Colombia, as well as the average weekly benefit received in each area. Based on information from February 2021, the states that on average issued the biggest unemployment checks were:

1. Massachusetts ($500.18)

2. North Dakota ($485.02)

3. Montana ($472.41)

4. New Jersey ($461.55)

5. Hawaii ($455.95)

In the same period, the states with the lowest average weekly benefit were:

45. South Carolina ($225.98)

46. North Carolina ($218.36)

47. Tennessee ($194.40)

48. Mississippi (194.40)

49. Louisiana ($193.03).

The average nationally for weekly benefits paid was $345.53, and of all fifty states and DC, twenty-six fell under that average. To further contextualize this data, it is essential to compare the amounts received on average to the cost of living in each state.

Who can best cover their expenses based on the amount they receive?

General Motors assembly workers on the assembly line at Orion Assembly in Lake Orion, Michigan.
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General Motors assembly workers on the assembly line at Orion Assembly in Lake Orion, Michigan.Rebecca CookREUTERS

The cost of living describes the amount of money needed by families and individuals to cover their basic needs. Comparing benefit amounts to the cost of living can help paint a clearer picture of how far unemployment benefits go in covering the costs of goods and services such as housing, food, transport, utilities, and more.

Earlier this month payroll company Patriot published a list with median rent prices for each state to give employers an idea of how much they may need to pay their workers. Rents ranged from $888 in West Virginia to $2,518 in California. By multiplying the average weekly benefit by four, we get the average monthly benefit of those on unemployment. Then, subtracting that average monthly benefit from the median rent in the state, we can see which states leave unemployed people in a better position to cover other one of their most fundamental expenses, housing.

The average monthly benefit would not be enough to pay the median rent price in twenty-seven states. Residents in California, Hawaii, Florida, New Hampshire, and New York are most vulnerable with the average monthly benefit leaving them with an average unpaid rent balance of -$758.60.

Now, let’s consider the additional funds the federal government allocated to enhance state unemployment benefits. From December 2020 through September 2021, the stimulus packages passed by Congress add a $300 topper each week to the benefits sent out by the states, regardless of which one they live in. In Arizona, for example, where an unemployment recipient receives an average weekly benefit of 238.83, with the $300 topper, they would receive $538.83. If we assume that each eligible worker unemployed due to covid-19 receives $1,200 (four checks of $300 a month) on top of their four weekly checks, the number of states where housing eats up the entire benefit amount reduces to one, California. Based on this exercise, our Californian would have $-73 after paying the median rent in the state.

Based on this exercise, unemployment recipients who have the most money in their pockets after paying the median rent in their state would be:

1. Iowa ($1,869.8)

2. Montana ($1,855.64)

3. North Dakota ($1,850.0)

4. Kansas ($1,800.8)

5. Wyoming ($1,772.8)

The five worst states to be unemployed in based on this exercise would be:

1. California ($-73.00)

2. Hawaii ($542.80)

3. Florida ($561.92)

4. New Hampshire ($572.96

5. New York ($602.32)

These numbers are just estimates and could vary based on whether a person lives in an urban or rural setting or if their job was low or high paying before they were let go.

In March, Forbes conducted a study using similar indices but different data and concluded that the top five states to receive unemployment were Kansas, North Dakota, Wyoming, Texas, and Massachusetts.

Who receives benefits the longest?

In most states and the District of Columbia, unemployed workers can receive benefits for up to 26 weeks. In two states, Massachusetts and Montana, unemployed workers can claim benefits for thirty and twenty-eight weeks, respectively. Some states have shorter eligibility periods. For example, Alabama, Idaho, Michigan, and Missouri, North Carolina, and South Carolina cap the number of weeks at twenty, and Florida only provides benefits for twelve weeks.

When the pandemic first began, federal lawmakers saw that they would need to allocate funds for states to extend the unemployment eligibility period. The three major stimulus bills passed through congress to support the US economy and workers throughout the pandemic extended the unemployment eligibility periods. The most recent, the American Rescue Plan, which was passed in March 2021, extended the number of weeks workers left unemployed by the pandemic were eligible for benefits to 53 and are set to expire in September of this year unless another piece of legislation is passed.

Based on this metric, one could say that states like Massachusetts and Montana provide the best benefits. But, if a worker has lost their job to covid, rating state unemployment systems is not helpful as workers in all states are eligible for federal extensions.