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JPMorgan (JPM) recently released a report concluding that the unemployment extensions are … causing more unemployment!
Despite the logic, it’s not exactly true. There are many macro forces which have caused one of the worst recessions this century. Therefore, I don’t buy the the overly simplistic conclusion that unemployment benefit extensions are the cause of longer than average unemployment. I think the busted credit bubble played a major role.
Source: JPMorgan
In the entire report, there was not one mention of how much money people receive on unemployment. More importantly, there is no metric showing unemployment income compared with former income. There is also no metric showing unemployment income compared with personal/household expenses.
As of February 2009, the average weekly unemployment check in the U.S. was $293. How many people do you know who can manage on less than $300 a week? How about living in Manhattan on $405 a week? If you’ve ever visited, you know that’s a joke.
I’m not sure if Michael Feroli at JPMorgan has been at his desk for over 100 hours a week, but he needs to get out more. Actually, he should look at the maximum unemployment benefits per state below, and then reconsider his silly presuppositions:
| State | Maximum | State | Maximum |
|---|---|---|---|
| Alabama | $255 | Montana | $407 |
| Alaska | $370 | Nebraska | $308 |
| Arizona | $240 | Nevada | $362 |
| Arkansas | $409 | New Hampshire | $427 |
| California | $450 | New Jersey | $584 |
| Colorado | $475 | New Mexico | $455 |
| Connecticut | $519 | New York | $405 |
| Delaware | $330 | North Carolina | $494 |
| District of Columbia | $359 | North Dakota | $385 |
| Florida | $275 | Ohio | $372 |
| Georgia | $330 | Oklahoma | $392 |
| Hawaii | $545 | Oregon | $482 |
| Idaho | $362 | Pennsylvania | $539 |
| Illinois | $385 | Rhode Island | $528 |
| Indiana | $390 | South Carolina | $326 |
| Iowa | $443 | South Dakota | $285 |
| Kansas | $423 | Tennessee | $275 |
| Kentucky | $415 | Texas | $378 |
| Louisiana | $284 | Utah | $444 |
| Maine | $496 | Vermont | $409 |
| Maryland | $380 | Virginia | $378 |
| Massachusetts | $628 | Washington | $541* |
| Michigan | $365 | West Virginia | $424 |
| Minnesota | $566 | Wisconsin | $363 |
| Mississippi | $230 | Wyoming | $387 |
| Missouri |
Could you live off those benefits? Let us know in the comments below …
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