More need with fewer reserves

By Fester:

Last month was another bad month for employment.  The initial non-farms payroll report shows a net job loss of 62,000 jobs.  Further revisions to the April and May data showed a loss of another 50,000 jobs.  Given population growth, the economy needs to create roughly 150,000 new jobs per month to maintain a constant workforce participation rate.  This month has a gap of 210,000 jobs between trend and actual.  The labor market has been loose for the past eight years, and now it is flapping in a mild breeze. 

Now Raw Story is reporting that the state level unemployment insurance reserves are rapidly decreasing:

Thirty-three states have funds below recommended levels, meaning they're at risk of running out in less than a year unless they're replenished as required under federal law. Nearly half the states could run out in less than six months.

The funds, totaling about $38 billion today, are in worse shape than before the last recession, when the total was about $54 billion.

I know Pennsylvania's rule when their fund is running low is to cut benefit levels while maintaining the length of benefits.  I don't know how other states manage their unemployment funds.  But this is symptomatic of the burning through of reserves and capital that produced the 'Bush Boom' mirage.  Reserves were run down at all levels, the federal government turned a surplus into massive deficits, states never rebuilt their reserve funds, and families went into HELOC hell and ran a deficit during the 'good times'.  This is going to hurt.

Comments

[Kirk]

See my previous comment from a couple days ago.

I think I can tell you how Georgia is handling it.