The 10 Worst States in Which to Lose Your Job

The recession has hurt the whole country, but not equally -- here are the worst states you can live in when a pink slip arrives.
By Joshua Holland | Alternet

The recession has hurt the whole country, but not equally. For example, the unemployment rate in North Dakota, a state with its own bank, which helped insulate it from the financial crash, stands at just 3.6 percent, while Nevada's rate last month was 13.2 percent.

Obviously, it's much harder to find a job in places where unemployment is high and there are lots of other people vying for open positions than it is in a tight job market. But looking at the top-line unemployment rate alone doesn't tell the full story of what it's like to be jobless in any given part of the country. While being unemployed sucks for everyone, the benefits available to keep the unemployed afloat vary significantly from state to state.

We decided to dig into state-level data and try to flesh out which are the very worst states in which to lose one's job. We looked at several factors.

It's not just the rate of unemployment that matters, but the length of time people are unemployed – long-term unemployment comes with unique problems that people who are jobless for a brief period don't experience.

Nationwide, the average length of unemployment stands at 39 weeks, shattering the previous record of 23 weeks set in the early 1980s. Unfortunately, on the state level, the most recent data are from 2009. But we used the median length of joblessness that year to give a relative sense of how long it takes to find a job in various states.

We also looked at underemployment – people who aren't counted in the headline numbers. These include those who are working a part-time job because they can't find a full-time gig, and others who have been out of work for so long that they've given up the search.

On the benefits side, states have a lot of leeway in how they administer their unemployment insurance programs. The policies set in state houses determine who is eligible for unemployment insurance, how much of their salaries are covered and how long they're eligible to receive benefits.

We looked at the following info:

• The percentage of unemployed workers receiving benefits provides a rough measure of how restrictive a state's eligibility requirements are. This measure isn't perfect, because there are various reasons people don't receive benefits for which they're eligible, but it gives us a good sense of how restrictive the requirements are. In the United States (in the second quarter of 2008), 37 percent of jobless workers received unemployment benefits – so we looked at how states stacked up against the national average.
• The average weekly check received by unemployed people varies from state to state, as does the share of their working incomes those benefits represent. Among developed countries, the US offers some of the stingiest unemployment benefits around, which is why conservative spin that the jobless are living it up on their unemployment insurance instead of trying to find work is so ludicrous (though there is evidence that this is actually true in places like Scandinavia, where people who lose their jobs still take in 70 percent or more of their income). In 2008, those unemployed Americans who qualified for benefits got $293 per week, or about 35 percent of their lost income. We looked at how states compared with those nationwide numbers.
• Congress has authorized extended unemployment benefits – totaling up to 99 weeks – during this recession. That's why people who have seen their benefits expire before finding a job have come to be known as “99ers.” But not every state with high unemployment offers 99 weeks of benefits. We looked at which ones don't.
• The federal COBRA law offers laid off workers the ability to stay in their group medical plan for up to 36 months, but it only applies to companies with 20 or more employees. That doesn't help people who lost jobs at smaller companies, and many states have stepped in to fill the gap by enacting “mini-COBRA” laws for smaller firms. Not all have done so, and the details of those plans vary. We looked at these laws as well.

In considering all these factors, we get a better picture, beyond what the unemployment rate tells us, of what it's like to lose one's job in a given state. For example, we considered including California because of its 12 percent rate of joblessness and long duration of unemployment, but ultimately rejected it because its programs cover more people than the national average, offer above average benefits and feature mini-COBRA coverage for a full 36 months. Tennessee is included, despite having a lower unemployment rate, because its benefits are stingy and don't cover a lot of its jobless citizens.

This isn't a scientific study, so you can argue over which states you think should have been included or excluded:

Mississippi
Unemployment rate: 10.2 percent
Underemployment: 17 percent
Maximum extended benefits: 79 weeks
Median duration of unemployment in 2009: 13.1 weeks
Share of jobless receiving unemployment benefits: 25 percent
Average weekly check: $177.73 (29.4 percent of lost earnings)
Mini-COBRA for health insurance: 12 months

Arizona

Unemployment rate: 9.5 percent
Underemployment: 18.7 percent
Maximum extended benefits: 99 weeks
Median duration of unemployment in 2009: 14.5 weeks
Share of jobless receiving unemployment benefits: 29 percent
Average weekly check: $211.19 (27.4 percent of lost earnings)
Mini-COBRA for health insurance: None

Florida

Unemployment rate: 11.1 percent
Underemployment: 18.8 percent
Maximum extended benefits: 99 weeks
Median duration of unemployment in 2009: 18.1 weeks
Share of jobless receiving unemployment benefits: 25 percent
Average weekly check: $177.73 (29.4 percent of lost earnings)
Mini-COBRA for health insurance: 18 months

Georgia

Unemployment rate: 10 percent
Underemployment: 17 percent
Maximum extended benefits: 99 weeks
Median duration of unemployment in 2009: 16.2 weeks
Share of jobless receiving unemployment benefits: 25 percent
Average weekly check: $267.04 (34 percent of lost earnings)
Mini-COBRA for health insurance: 3 months

Kentucky
Unemployment rate: 10.2 percent
Underemployment: 16.3 percent
Maximum extended benefits: 99 weeks
Median duration of unemployment in 2009: 16.2 weeks
Share of jobless receiving unemployment benefits: 30 percent
Average weekly check: $291.49 (42.9 percent of lost earnings)
Mini-COBRA for health insurance: 18 months

Nevada
Unemployment rate: 13.2 percent
Underemployment: 23.7 percent
Maximum extended benefits: 99 weeks
Median duration of unemployment in 2009: 15.2 weeks
Share of jobless receiving unemployment benefits: 41 percent
Average weekly check: $288.49 (35.9 percent of lost earnings)
Mini-COBRA for health insurance: 18 months

Michigan

Unemployment rate: 10.3 percent
Underemployment: 20.3 percent
Maximum extended benefits: 99 weeks
Median duration of unemployment in 2009: 19.4 weeks
Share of jobless receiving unemployment insurance: 39 percent
Average weekly check: $296.35 (36.3 percent of lost earnings)
Mini-COBRA for health insurance: Only for children

Rhode Island
Unemployment rate: 11 percent
Underemployment: 19 percent
Maximum extended benefits: 99 weeks
Median duration of unemployment in 2009: 17 weeks
Share of jobless receiving unemployment benefits: 42 percent
Average weekly check: $367.70 (46.5 percent of lost earnings)
Mini-COBRA for health insurance: 18 months

South Carolina
Unemployment rate: 9.9 percent
Underemployment: 17.5 percent
Maximum extended benefits: 99 weeks
Median duration of unemployment in 2009: 19.4 weeks
Share of jobless receiving unemployment benefits: 34 percent
Average weekly check: $236.08 (35.7 percent of lost earnings)
Mini-COBRA for health insurance: 6 months

Tennessee
Unemployment rate: 9.5 percent
Underemployment: 16.2 percent
Maximum extended benefits: 79 weeks
Median duration of unemployment in 2009: 15.3 weeks
Share of jobless receiving unemployment benefits: 28 percent
Average weekly check: $211.11 (29.6 percent of lost earnings)
Mini-COBRA for health insurance: 3 months

Sources:

Unemployment rates are March figures from the Bureau of Labor Statistics: http://www.bls.gov/web/laus/lauhsthl.htm

Underemployment is averaged from the second quarter of last year through the first quarter of 2011, also from BLS: http://www.bls.gov/lau/stalt11q1.htm

Median duration of unemployment are numbers from 2009, courtesy of the Economic Policy Institute:
http://www.epi.org/economic_snapshots/entry/job_searches_take_longest_in_michigan_and_south_carolina

The length of extended UI benefits are from the Center for Budget and Policy Priorities: http://www.cbpp.org/cms/index.cfm?fa=view&id=3164

The National Employment Law project brought us the average weekly checks sent to the unemployed in various states, what they represent in terms of replacing lost wages and the share of jobless people who are covered by the states. The data is from the second quarter of 2008. They have it broken down by region:

East: http://www.nelp.org/page/-/UI/2008.2.%20Eastern%20States.pdf
Mid-west: http://www.nelp.org/page/-/UI/2008.2%20Mid-Western%20States.pdf
South: http://www.nelp.org/page/-/UI/2008.2%20Southern%20States.pdf
West: http://www.nelp.org/page/-/UI/2008.2%20Western%20States.pdf
 
Mini-COBRA info from the State COBRA Law Directory: http://www.cobrahealth.com/statelawdirectory.htm

Unemployed Are Seeing A Rise in Health Care Costs

Laura Bassett 08-30-10
While the national unemployment rate has been hovering at about 9.5 percent for the last year, the average cost of health care plans for jobless Americans is steadily on the rise.

Terminated workers are paying an average of $429 a month this year for individual HMO coverage, compared to $399 for the same coverage in 2009, according to a survey conducted by Aon Consulting. COBRA coverage for an entire family now costs an average of $1,251, up from $1,171 per month at this time last year. With COBRA costs on the rise and the average unemployment check totaling less than $300 a week, a growing number of jobless Americans are no longer able to afford their health insurance plans.

Dianna Walker, 41, of Clearwater, Florida, said she and her husband have been struggling to afford COBRA since she was laid off on June 3, three days after the COBRA subsidy expired.

"We are charged $884 per month for COBRA," Walker told HuffPost. "Try paying that with a $240 unemployment check."

Walker said her husband has a pre-existing health condition that requires up to $1,000 per month in medications, but he doesn't qualify for the government's new Pre-Existing Condition Insurance Plan because he hasn't been uninsured for more than six months. HuffPost's Arthur Delaney recently reported that only 1,200 people have been approved so far for the PCIP program, whose steep premiums ranging from $140 to $900 a month make it no more affordable than COBRA for many unemployed Americans.

Walker said COBRA is draining her savings, but she and her husband are out of options.

"We just missed our first mortgage payment ever," she said. "I have checked into all the new options from Obama's new health care reform and it is next to impossible to qualify. And if you do, it is very little coverage and costs more than COBRA without the subsidy.

John Zern, executive vice president and Health & Benefits Practice director with Aon Consulting, said the costs of COBRA are rising because so many people are using the system.

"The increased frequency and duration of COBRA use is creating a significant strain on the program, leading to higher costs," he said. "Those who are unemployed, and facing uncertainty about employment prospects and future COBRA availability, are utilizing the program more than we've traditionally seen to treat a variety of conditions prior to potentially losing coverage."

Current employees should also expect to see their plans become more expensive in the next couple of years as employers shift the costs over to them. The Aon survey found that 65 percent percent of employers plan to increase cost-sharing in 2011 for deductibles, co-pays and out-of-pocket maximums, and 57 percent of companies polled said they will ask employees to contribute more for the overall cost of health care next year.