States hit hard by higher jobless claims

Two men fill out job forms at the Diversity Job Fair at the Affinia Hotel in New York City last June.

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TESS VIGELAND: With the jobless rate up over 6 percent, more people are receiving unemployment benefits, and more people are staying on unemployment.

Today the Labor Department reported more than 3.5 million people continued to receive benefits in the last week of August. And that means states are struggling to pay the bill. Marketplace's Dan Grech reports.


DAN GRECH: In a healthy economy, there's about one unemployed person for each job opening. In today's economy, there are 2.5 unemployed people per job opening.

JARED BERNSTEIN: You have this very unforgiving game of musical chairs going on right now, where the number of jobless people is increasing but the number of job openings is declining.

That's Jared Bernstein with the Economic Policy Institute.

BERNSTEIN: We're just not creating the kind of dynamic opportunities that folks need to get off those rolls and get back into the job market.

States are responsible for paying unemployment benefits, and they're having trouble keeping up. Andrew Stettner is with the National Employment Law Project.

ANDREW STETTNER: We found that about 18 states were either near insolvency or insolvent.

New York and Michigan have had to borrow from the federal government this year to pay claims.

STETTNER: It's worse than it's been for the last 20 years, since the early 80s recession.

Carol Montana worked at The Times Herald-Record newspaper in Middletown, N.Y., until she was laid off last year.

After 18 months of off-and-on benefits, she still hasn't found another job.

CAROL MONTANA: I didn't think I'd be one of those millions of people who are out of work and collecting unemployment. It's a scary club to be in at this point in time.

A club that's likely to grow in membership in the coming months.

I'm Dan Grech for Marketplace.

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