Thursday, August 13, 2020
Hawai'i Free Press

Current Articles | Archives

Saturday, May 09, 2020
How Solvent is Hawaii Unemployment Trust Fund?
By Tax Foundation @ 3:17 AM :: 874 Views :: Hawaii Statistics, Labor, Small Business, COVID-19

A Visual Guide to Unemployment Benefit Claims

by Jared Walczak and Tom VanAntwerp, Tax Foundation, May 8, 2020

According to Thursday’s data release, another 2,849,090 people filed initial unemployment benefit claims during the week ending May 2, the fourth week of a decline in the rate of new claims, but still among the highest levels in U.S. history. (New claims peaked at 6,211,399 for the week ending April 4.) The total number of new and continued claims now stands at 24,884,843.

Prior to the current crisis, the highest one-week unemployment claims as a percentage of everyone in the unemployment insurance system (those currently in “covered” employment plus those claiming benefits) was 1.36 percent, in January 1975. During the Great Recession, the one-week peak was 0.68 percent in January 2009. The peak during the current crisis, reached the week ending April 4, was 3.89 percent.

Approximately 15.1 percent of the U.S. civilian labor force has now applied for or is receiving unemployment compensation benefits (through May 2, the latest data). The previous high was 7.9 percent early in 1975 during a recession, with a Great Recession peak of 4.8 percent between February and April 2009. Entering March 2020, unemployment claims as a percentage of the civilian labor force stood at 1.4 percent.

percentage of jobless claims in the united states, state unemployment rates, state unemployment insurance claims, state unemployment claims

Unfortunately, many states entered the crisis with woefully inadequate unemployment compensation trust funds. Trust funds in California, Massachusetts, New York, Ohio, and West Virginia are nearly or completely exhausted, with depletion imminent in Connecticut, Texas, Illinois, and Kentucky as well. According to our projections, a dozen states only have enough left in their funds to pay out a month’s worth of benefits based on those who have filed for or are receiving benefits to date; since payments lag claims, it may take an additional week or two for funds to be fully exhausted.

According to the Treasury Department, nine states—California, Connecticut, Hawaii, Illinois, Massachusetts, New York, Ohio, Texas, and West Virginia—have already been approved for federal loans (called Title XII Advances) in anticipation of the exhaustion of their trust funds. States must repay these advances (with interest starting in 2021), and if they still have outstanding balances after two years, in-state businesses will face higher federal unemployment insurance taxes to compensate for the state being in arrears.

State unemployment funding could run out in weeks, state unemployment trust funds could run out of money, California unemployment trust fund, texas unemployment trust fund, Illinois unemployment trust fund, ohio unemployment trust fund, new york unemployment trust fund, kentucky unemployment trust fund

States are now beginning to process claims from self-employed filers (normally ineligible for unemployment compensation) under the Pandemic Unemployment Assistance (PUA) program. These claims are fully federally funded, and these should be accounted for separately by states, but it is not yet clear whether all states are being consistent in excluding them from their weekly unemployment compensation claims data submitted to the Department of Labor, or whether some are mixing them with regular claims which are funded by the states.

Mandatory business closures and shelter-in-place orders have radically accelerated job losses compared to the steadier pace of layoffs in prior recessions, meaning these claims likely represent a far greater share of the ultimate total than did any week’s claims during the Great Recession. But the numbers are still staggering, with every likelihood of sobering numbers in coming weeks as well.

Our interactive tool allows you to see how the most recent week’s initial unemployment compensation claims in each state compare to average and peak weekly claims during the Great Recession. Many states are woefully unprepared for the magnitude of the challenge ahead. Entering the crisis, 21 states’ unemployment compensation trust funds were below the minimum recommended solvency level to weather a recession. Six states had less than half the minimum recommended amount, representing 37 percent of the U.S. population.

Crucially, a solvency level of 1 indicates the ability to pay out claims for one year during a Great Recession-like event, and as of May 2, nearly 24.9 million people had filed for unemployment, 418 percent of the worst Great Recession level. A level of 1 now suggests the ability to pay out current claims for only a little under 11 weeks—and of course, states have already started paying out these new claims. Our map above draws from the most recent fund financial data and claims figures, taking into account payments already made, to project how many weeks each state’s fund has left.

How Solvent is your state's unemployment insurance trust fund? State unemployment insurance solvency, solvency of state unemployment insurance trust funds, solvency of state unemployment trust funds

As more firms lay off employees and unemployment increases, states’ unemployment insurance taxes will rise on businesses that can least afford to pay. As states receive federal assistance to aid with unemployment benefits, it may be appropriate to provide some measure of relief to businesses as well, particularly to the extent that their layoffs were precipitated by business closure orders.

Explore your state’s data on our interactive tool at >>> THIS LINK

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

ACA Signups Hawaii

ALEC

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Ballotpedia Hawaii

Better Hawaii

Blaisdell Memorial Project

Broken Trust

Build More Hawaiian Homes Working Group

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

Coffee Break

DeedySupport.com

DVids Hawaii

E Hana Kakou Kelii Akina

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes

KeyWiki

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii

NARTH

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Hawaiian

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT