Last week, on March 26th, weekly initial unemployment benefit claims reached the highest level in the history of our country. Claims were five times higher than the worst week during the Great Recession of 2008 at almost 2.9 million claims.
We are likely to see more sobering numbers in the coming weeks, therefore it is important that we take a look at the health of Utah’s unemployment insurance trust fund and how it compares to other states.
The Tax Foundation in Washington D.C. has issued some excellent data. First, here is a look at how quickly claims have skyrocketed in the most recent week, which is seen on the right.
Utah comes in at #20 (with #1 out of 50 being the biggest jump) out of the fifty states with an alarming jump of 1,401% above the previous week. Other notable states are the biggest jump in the nation is New Hampshire at 3,308% and the smallest jump comes from Georgia at only a 116% increase.
States prepare for times like this by building their reserves in their respective Unemployment Insurance Trust Funds. Unfortunately, some states are better prepared than others and there is a wide range of levels of reserves.
There are efforts to bolster the states Unemployment Trust Funds from the federal government. The recently passed “CARES Act (HR 748)” contains several aid packages for states including federally funding the first week of unemployment claims and hundreds of billions of dollars to shore up the states’ balances. Only time will tell if that will be enough.
Along with the federal aid, there are a number of measures the State of Utah could take to weather this storm. Hopefully, the solid position Utah has been in leading up to this will allow policymakers to provide remedies that don’t further burden taxpayers.