Doing the Math on Unemployment Benefits

With nearly 10 million people registering for unemployment in a two-week period, we decided to look at unemployment benefits and how much they’ll cover in the upcoming weeks.

Unemployment benefits vary by state. Generally, they are a percentage of a person’s wages and limited to a certain number of weeks – usually 26 – and do not start until seven days after a person files for benefits. Once a recipient’s allotted benefits run out (i.e. are paid out over the maximum number of weeks), they might not be eligible to receive unemployment benefits for a while.

Excluding expanded benefits under the stimulus package, Massachusetts offers the highest weekly unemployment benefits at $823 for up to 30 weeks; Mississippi offers the lowest weekly benefits at $235 for up to 26 weeks – not enough to keep a single adult over the U.S. poverty guideline of $12,490 ($25,750 for a family of four according to the U.S. Department of Health & Human Services). Georgia offers the shortest benefit period at 20 weeks.

Using, as an example, Colorado, whose weekly maximum unemployment benefit of $561 exceeds even California’s weekly maximum, unemployment pays no more than 60% of a recipient’s earnings. A person must earn $4,000 monthly, or $48,000 annually, to receive an average monthly benefit of $2,431 – the maximum benefit in Colorado – a $1,569 hole. (We’re comparing gross numbers because both amounts are subject to income tax.) Add on the monthly cost of COBRA – which averaged $610 per month for individual plans in 2019 according to the Kaiser Family Foundation ($1,749 for families, both figures include 2% administrative fees) – and, in a state where half the population earned more than $68,811 in 2018, $5,734 monthly, according to the U.S. Census Bureau, an additional $1,200 might not be sufficient to keep the unemployed in their homes if this continues over a protracted period.

Increasing weekly unemployment benefits by $600 will raise the maximum monthly benefit to $5,031. Anyone earning less than $60,000 annually – less than half Colorado’s working population in 2018 – will receive more in benefits through July 31, 2020, than they had been earning monthly. All others will receive less than they earned.