Unemployed? You Want to Live Here
Unemployment pay is better in certain cities; find out which ones.
July 8, 2008— -- The federal government's indictment of those involved in the country's subprime meltdown and credit crunch is of little comfort to those who have lost their jobs as a result of the ensuing financial downturn.
What's more relevant is the city in which they live, as unemployment insurance, benefits and cost of living vary by city and state. There's never anything good about being laid off, but if you lose your job in Pittsburgh or Charlotte, N.C., it'll be easier to cover food, health and home expenses than if your pink slip comes from a Miami- or New York-based company. In the former, the maximum weekly payment covers 46.9% and 38.3% of the maximum earner's living costs, respectively; in the latter, those numbers dip to 18.5% and 17.2%.
Other good places for unemployment pay include Boston (35.6%) and Salt Lake City (34.3%). Cities with the worst payouts include San Francisco (20.6%) and Orlando, Fla. (21.4%)
Behind The Numbers
For each city we considered how much money was available to a worker who was earning $150,000 a year and thus received the maximum weekly benefit in every state. For the sake of consistency it was assumed that our model worker had been employed during the previous year and was let go through no fault of his or her own. Then, we looked at how far the weekly unemployment check went, considering local costs for housing, transportation, health care and utilities.
There was no distinct pattern. The 10 best cities include expensive Northeastern spots like Boston and Providence, R.I., but also inexpensive cities like Houston and moderately-priced Salt Lake City. The bottom 10 were also regionally and politically diverse. Benefits in Nashville, Tenn., and Tampa, Fla., don't keep pace with cost of living, but neither do the checks in San Francisco or Washington, D.C.
Unemployment benefits are paid weekly and range from $600 a week in Massachusetts to $240 a week in Arizona. Cost of living varies just as dramatically. Based on CCER figures, Boston is 33% more expensive than Phoenix.
Benefits At Stake
At issue? Where the extra money comes from and who gets it.
"It's not targeted to workers in states that need it the most," says Rep. Kevin Brady (R-TX), referring to the fact that the bill extends benefits in all states regardless of unemployment rates. "There's a big difference between being laid off in Michigan and being laid off in southeast Texas. A good number of our states are at or below 5% unemployment."
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As of May, Texas unemployment was 4.5%, which is well below the national average of 5.5% and close to what economists refer to as "full employment." This describes places where there is frictional unemployment--like those in between jobs and those enjoying their unemployment--but where someone who wants a job can find one. In Michigan, by contrast, unemployment stands at 8.5%. In both states, as with the nation, rates are up in month-over-month and year-over-year terms.
The House version of the act would pay for the extension by tapping the $35 billion Unemployment Trust Fund, drawing it down by $10 billion over 10 years or $14 billion over five years, depending on the length of implementation. The bill doesn't meet the Democrats' definition of PAYGO, a system that requires expenditures to be made available as the program proceeds. The bill's proponents say the Unemployment Trust Fund is a unique case.
"It doesn't meet PAYGO, but this money is dedicated to helping unemployment benefits. It's not revenue," says Mike DeCesare, a spokesman for Rep. Jim McDermott (D-WA), the bill's sponsor. "It's a rainy day fund, and it's raining."
President Bush has threatened to veto the bill in its current form. While it has not yet had a vote in the Senate, the House passed the bill 274-137, enough to override a presidential veto.
That's good news for those living in Phoenix, where home prices are down 15.4%, and the highest earners out of work get a measly $240 a week.