WalletHub Study
With nearly 39 million Americans now jobless as a result of the COVID-19 pandemic but many people actually making more money while unemployed.
As more than half of the U.S. takes the first steps toward reopening the economy after months of keeping non-essential businesses closed, Americans hope to see the massive spike in unemployment start to reverse. Nearly 39 million Americans have found themselves temporarily or permanently out of a job since the week of March 16, which translates to a staggering 17.2% unemployment. Though the reopening of states will provide opportunities for some people to go back to work, businesses will open in stages rather than all at once, and many may not have the resources to hire as many people as they did previously.
Not all states have experienced the same levels of unemployment due to the pandemic. To identify which states’ workforces have been hurt most by COVID-19, WalletHub compared the 50 states and the District of Columbia based on increases in unemployment claims. We used this data to rank the most impacted states in both the latest week for which we have data (May 11) and overall since the beginning of the coronavirus crisis (March 16). Read on for the results, additional commentary from a panel of experts and a full description of our methodology.
To identify which states’ workforces have been hurt the most by COVID-19, WalletHub compared the 50 states and the District of Columbia based on increases in unemployment claims. We used this data to rank the most impacted states in both the latest week for which we have data (May 11) and overall since the beginning of the coronavirus crisis (March 16). Below, you can see highlights from the report, along with a WalletHub Q&A. To see the states most impacted since the beginning of the COVID-19 pandemic, click here.
Increase in Florida Unemployment Claims Due to Coronavirus (1=Worst, 25=Avg.):
• 3,424.19% Increase in Unemployment Claims (May 2020 vs May 2019)
223,927 the week of May 11, 2020 vs 6,354 the week of May 13, 2019
2nd highest increase in the U.S.
• 4,749.00% Increase in the Number of Unemployment Claims (May 2020 vs January 2020)
223,927 the week of May 11, 2020 vs 4,618 the week of January 1, 2020
The highest increase in the U.S.
• 4,083.76% Increase in Unemployment Claims Since Pandemic Started
2,214,743 between the week of March 16, 2020 and the week of May 11, 2020 vs 54,233 between the week of March 18, 2019 and the week of May 13, 2019
4th highest increase in the U.S.
Is it a good thing that many people are making more money while unemployed than they did while employed?
“Given the temporary nature of the increase in unemployment benefits during the COVID-19 pandemic, it is a good thing that many Americans will have a few months during which they will make more money while unemployed than they did while employed. Some benefits expire in July, while others expire in December, which lets unemployed Americans have a short period of extra financial security as they try to find new jobs in the struggling economy,” said Jill Gonzalez, WalletHub analyst. “In the long term, people naturally should not continue to make more while unemployed than they did while employed, as this will reduce the incentive to work and will lead to a lot more federal spending.”
What can states do in order to minimize the rise in their unemployment rates?
“States should aggressively focus on keeping residents safe from coronavirus while enabling economic activity, which requires moving out of the phase of simply issuing guidelines on people’s behavior and instead passing laws,” said Jill Gonzalez, WalletHub analyst. “When states reopen businesses, they should simultaneously issue strict rules such as mandatory mask wearing in public and limits on the number of people in a store. If COVID-19 restrictions are recommendations rather than laws, that allows people to disregard the safety of others for their own comfort and risk spreading the disease.”
How has the unemployment rate in New York – the state with the most COVID-19 cases – been affected?
“New York has seen a 405% increase in initial unemployment claims from the beginning of 2020 to the week of May 11,” said Jill Gonzalez, WalletHub analyst. “This is better than the average increase of 652%.”
To view the full report and your state’s rank, please click
Image by Marek Studzinski from Pixabay
