New research from the Federal Reserve Bank of Minneapolis says the federal-state unemployment insurance system played a key role in keeping the U.S. economy afloat during the first year of the pandemic, with states managing to twenty-tuple their UI payments to displaced workers in need in the first quarter of the crisis:
The federal government reports that states made more than $1 trillion in UI payments in the second quarter of 2020, in contrast to less than $50 billion in the prior quarter (both at annualized rates). This spending, combined with direct payments to households, caused personal income to rise instead of fall in the second quarter of 2020, even as workers lost their jobs. The UI payments constituted vital support for families, for the overall economy, and for the public health mission of enabling workers to avoid COVID-19 exposure during some of the worst months of the pandemic [Tyler Boesch, Katherine Lim, and Ryan Nunn, “What Did and Didn’t Work in Unemployment Insurance During the Pandemic,” Federal Reserve Bank of Minneapolis, 2021.08.02].
But UI assistance doesn’t do as much good if it doesn’t reach displaced workers in a timely fashion. Unfortunately, it appears that South Dakota is one of the worst states for getting benefits out within three weeks:
The Department of Labor says states should get at least 87% of first UI payments out within 21 days. All states struggled to keep up with the explosion of UI claims when the pandemic began, but by April of this year, “half of all states made at least 80% of their payments within 21 days.” The chart above shows payment efficiency in May 2021 and indicates that, even with a year’s practice at dealing with the pandemic and unemployment claims returning to normal, South Dakota remains terribly inefficient at delivering unemployment assistance. Nebraska and Iowa are also letting their workers down, while Minnesota, North Dakota, and Wyoming all are in the top tier of states for UI efficiency.
Maybe instead of hoarding federal pandemic assistance to fabricate a budget surplus, we should be spending our pandemic dollars to improve basic government efficiency in delivering the aid the law requires.
Isn’t there something you could buy like a new plane?
States that stopped UI saw job rate grow around 11%, same as states that didn’t cut benefits.
Is every facet of SD government as mean spirited as it appears?
Porter – yes – yes it is. I am reminded of a man who was hired to be the Finance Officer of a small SD town. After a couple years on the job a city councilperson asked him what his impression of the place was, now that he’d had time to “settle in”. His one word response was “cold” and he wasn’t talking about the weather.
In my small town just south of the big one, there is one word to describe the city government’s treatment of the citizens… ‘punitive’. The citizens are ‘cash cows’ as described at one council meeting.
Wow, that’s why SD towns keep losing people.
Cold. Cash cows.
Wow, try as you may, you can’t go back to the 1950s any more.
Alternatives to City Councils foaming at the mouth about abandoned cars and derelict properties?
Easy. Create alternate groups or companies. Prosper mightily and then create a free legal defense fund.
City councils can’t create prosperity by picking up cars and tearing down houses.
Let’s show them how!
IMO this proves that SD state government is both cruel and incompetent. Nice job.
FWIW a good friend teaches at NDSU. They tell me ND politics and governance could stand improvement, but at least they’re not the total sh*tshow of the state to the south.