Unemployment Benefits by State 2025

Unemployment is defined as those who are jobless, have actively looked for a job within the last four weeks, and are available for work. The unemployment rate measures unemployment as the number of unemployed people as a percentage of a population’s labor force. Unemployment is a key economic indicator and can be a sign of economic turmoil. If someone is not actively looking for work, they are not included in the unemployment rate. This means that individuals who retire, go back to school, or leave the workforce to raise. Family or take care of relatives is not counted in the unemployment rate.

As of January 2020, the unemployment rate is 6.7%, according to the Bureau of Labor Statistics. The natural rate of unemployment is between 3.5% and 4.5%. Unemployment rates vary significantly by state.

Causes of Unemployment

Unemployment has seven main causes. These causes can be categorized into the following types of unemployment: cyclical unemployment, structural unemployment, and frictional unemployment.

Cyclical unemployment, which is also demand-deficient unemployment, means there are fewer jobs than there are applicants. This typically happens during a recession and results in large-scale unemployment. When consumer demand falls, companies lose profits and must lay off workers as a result. An example of this is the 2008 financial crisis.

Structural unemployment is long-term and involuntary. The two causes of structural unemployment are technological advances and outsourcing. Advancements made in technology can make some jobs obsolete when computers and robots can perform the job functions for a much lower cost than payroll. In job outsourcing, a company moves its call centers or manufacturing to another country where labor costs are significantly lower. India is a large outsourcing destination for many companies.

The last four causes of unemployment fall under frictional unemployment. The first of these is voluntarily leaving the workforce, such as when people quit unfulfilling jobs to find the one that’s right for them. Relocation is another type of frictional unemployment, where people are temporarily unemployed until they find a job in their new city. The third cause of frictional unemployment is when new workers enter the workforce, especially those graduating from high school or college. The time between graduating and finding the right position causes unemployment. The fourth cause of frictional unemployment and the seventh cause of unemployment overall is when people re-enter the workforce. This includes those who left to raise children or care for older relatives, or those who have recovered from illness.

Unemployment Benefits

Unemployment benefits, also called unemployment compensation, unemployment payment, or unemployment insurance, are payments made by a government body to unemployed people. In the United States, each state has its own unemployment insurance program, including ones in the District of Columbia, Puerto Rico, and the United States Virgin Islands. The majority of U.S. states offer unemployment benefits for up to 26 weeks. Benefits range from $235 a week to $823.

Policies and benefits vary by state. Mississippi has the lowest maximum unemployment benefits in the U.S. of $235 per week, while Massachusetts has the highest at $823. North Carolina and Florida offer unemployment benefits for the shortest length of time with a maximum of 12 weeks. Montana offers unemployment benefits for the longest period of time of 28 weeks.