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National Analysis:
Sustained high unemployment rates, long-term unemployment and unsustainable funding models have exhausted state unemployment trust funds quickly.
In 2010, the national unemployment rate was 9.6 percent and forecasters predict that rate will hover around 9 percent throughout the rest of 2011. Moderate improvements to about 8 percent are expected in 2012.
In May 2011, the national unemployment rate was 9.1 percent, up slightly from April. Twenty-four states reported a decrease in their unemployment rate in May over April, 13 states and the District of Columbia reported increases, and 13 had no change.
Sustained high unemployment affects unemployment insurance trust funds in two primary ways: decreased supply and increased demand. More people need unemployment benefits for longer, increasing the money going out, while fewer people are paying into the reserves through payroll tax collections, draining the supply of funds coming in.
Throughout the economic downturn, the number of long-term unemployed, defined as those unemployed for 27 weeks or more, has skyrocketed. In May 2011, the number of long-termunemployed workers increased by 361,000 to 6.2 million. That translates to almost half—45.1 percent—of all those unemployed; that’s the highest percentage since the Labor Department began calculating the rate in 1948.
Based on U.S. Department of Labor reports, the average amount of time individuals received unemployment benefits was 39.7 weeks in May 2011—more than double the average duration of unemployment when the recession began in December 2007.1