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Very different states of unemployment

Unemployed workers wait to meet counselors at the One-Stop Employment Center in Columbia, S.C.

TEXT OF STORY

Stacey Vanek-Smith:


MITCHELL HARTMAN: The first stop on my tour of state unemployment systems is South Carolina. It's been hurting in this recession. Its unemployment rate is the third-worst in the nation, at just over 12 percent. The city of Greenville has seen many of its textile mills close. Now, the auto-parts plants that replaced them are cutting back.

TEACHER AT LITERACY CENTER: So, we're learning words, which are parts of speech. And then we'll remember how to make really good sentences with those words.

Some of the locals who get pink slips end up here, at Greenville's free Literacy Center.

ANTHONY CARBAJAL: March 19 was my last day of work. I didn't even know it was coming. No notice or anything.

Anthony Carbajal is 29. He's compact and powerful. It's easy to imagine him in his old job, welding metal crates for John Deere lawnmowers. But these days, Carbajal spends most of his time studying for his G.E.D. He has house payments to make and three kids to support, all on his weekly unemployment check.

CARBAJAL: I'm getting $332 a week.

HARTMAN: How does that compare to what you were making?

CARBAJAL: Oh, not good.

Next, let's jump across the country to Oregon. It has the second-worst unemployment in the country.

I met Michael Dymond at a Portland coffee shop. He's also a welder with three kids to support. He used to make rail cars. But two-and-a-half months ago he got laid off. Dymond was making nearly $600 a week.

MICHAEL DYMOND: And when I'm on unemployment, it's about $425.

Let's run those numbers again. Two skilled workers whose paychecks differed by about 50 bucks. On unemployment, the South Carolina welder takes home:

CARBAJAL: $332 a week.

The Oregon welder:

DYMOND: $425.

ANDREW STETTNER: It really matters what state you live in. The levels of benefits vary extremely wildly.

That's Andrew Stettner of the National Employment Law Project. He says it's not just how much you get that's all over the map.

STETTNER: In some states it might be two-thirds of all unemployed workers are getting benefits. In some states it's less than one out of four.

This patchwork has existed since the New Deal, when unemployment insurance was first introduced. To get the plan through, states were allowed to set their own rules on key items like how they calculate benefit amounts and who's eligible. There are states where you can quit your job, you can even be fired and still draw benefits. In other states, you have to be laid off for strictly economic reasons.

And the discrepancies in benefits can really slam middle-class professionals. In low-paying states like Nebraska and Louisiana, laid-off workers cap out around $300 a week on unemployment, no matter how much they used to make. In New Jersey and Minnesota, they'd get double that. Even after accounting for cost-of-living differences, that spread is wide.

In Oregon, Michael Dymond's unemployment check is pretty good by national standards. But he complains it doesn't go very far.

DYMOND: There's no way to survive on that. The bills alone for the rent or the house payments, and the electric and the utilities, and with the car and the insurance, you know, it's almost impossible.

Which is one reason the federal government is pushing states to boost benefits. Oregon's received millions in stimulus money to put more low-income workers on the rolls. And residents can keep getting checks longer now, if they can't find a job.

South Carolina's governor rejected that stimulus offer from the feds. Many South Carolina political and business leaders share his opposition to making more people eligible for unemployment. They don't want to plow extra money into what they think sometimes functions as a shadow welfare system for people who can't find steady work.

[Sound of store.]

Sara Googe and her husband have run a feed and seed store in the small town of Fairfax for three decades.

SARA GOOGE: Well, we sell baby chicks. We also sell a full line of garden supplies.

Googe says business is pretty good right now, despite the fact that nearly one in four people in this rural county are unemployed. She says locals often come in asking her to certify they've applied for a job, so they can stay on unemployment.

GOOGE: And I go, "You're not even looking for a job, why should I sign it?" I mean, this happens every week. I say, if they don't have a job, give them a shovel and a hoe and a sack of seed.

Soon, Googe may get her way. South Carolina's unemployment system has fallen $350 million in debt from paying benefits in the deepening recession. So it may have to raise business taxes, or boot people from the rolls at the worst possible time for the local economy.

I'm Mitchell Hartman for Marketplace Money.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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