Best and Worst Cities in the US for Unemployment Benefits

The 15 million Americans out of work can breathe a temporary sigh of relief: Despite Sen. Jim Bunning’s (R–Ky.), initial opposition, Congress passed an extension of emergency unemployment benefits on Mar. 2, providing another month of coverage.

This decision directly affects those who have been unemployed long enough to burn through the 26 weeks of federally mandated benefits, as well as the extended ones that automatically kick in during economic downturns. Fortunately, however, “during every extended recession, Congress concludes that these extended benefits are not sufficient,” says Alan Viard, resident scholar of the American Enterprise Institute, a Washington, D.C., think tank. Hence the Mar. 2 extension.

But the amount each American ultimately receives varies greatly depending on where they live. The federal government has set only a broad benchmark for unemployment pay. Each state has the right to offer additional benefits (paid for by higher state taxes); the degree to which they do differs, says Till Wachter, an associate professor of economics at Columbia University.

Long story short, if you’re jobless and living in Manhattan, the unemployment checks don’t go very far. But if you live in Pittsburgh and you’re out of work, the state is likely to do a much better job of covering some of your costs of living.

Behind the Numbers
To see how far an unemployment check goes, we looked at costs of living and average unemployment pay in 40 of the country’s biggest cities. We started by using data from the Council for Community and Economic Research’s (C2ER) average cost-of-living calculations–which include everything from gas to orange juice–for hundreds of metropolitan statistical areas and micro divisions across the country. We removed frivolous items from the data to focus on basic necessities such as food, gasoline, rent and utilities. We then added in the average COBRA cost by state, as provided by Families USA, a nonprofit proponent of health care reform.

This sum was then compared to the Department of Labor’s state figures for average weekly unemployment benefits (which we extrapolated to monthly averages), to determine which states’ unemployment checks cover more of the cost of living in big cities. Our final rankings are based on the difference between this cost and the average amount received from benefits.

There are a few additional points of note. First C2ER did not provide data for a couple of particularly large metropolitan statistical areas–most notably Las Vegas–that would otherwise be among the 40 largest population centers, so they were excluded from the rankings. Second, some of the data is relevant only to select regions in and around certain cities (e.g., New York City’s data covers only Manhattan; so the data doesn’t apply to someone who lives in New Jersey and commuted to Wall Street before losing his or her job).


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