Unemployment Insurance keeps economy afloat, but South Dakota is slow to deliver – Dakota Free Press

A new study from the Federal Reserve Bank of Minneapolis indicates that the federal states’ unemployment insurance system played a key role in keeping the US economy afloat in the first year of the pandemic, with states achieving at twenty-up their unemployment insurance payments to displaced workers in need during the first quarter of the crisis:

The federal government reports that states have done more than $1 trillion in unemployment insurance payments in the second quarter of 2020, compared to less than $50 billion in the previous quarter (both at annualized rates). These expenses, combined with direct payments to households, caused personal income to rise rather than fall in the second quarter of 2020, even as workers lost their jobs. Unemployment Insurance payments have been vital support for families, for the overall economy, and for the public health mission of enabling workers to avoid exposure to COVID-19 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 unemployment insurance help doesn’t do as much good if it doesn’t reach displaced workers in a timely manner. Unfortunately, it seems that South Dakota is one of the worst states to get benefits within three weeks:

Boesch, Lim and Nunn, 2021.08.02.

The Department of Labor says states should get at least 87% of first unemployment insurance payments within 21 days. All states struggled to keep up with the explosion in unemployment insurance claims when the pandemic began, but in April of this year, “half of all states made at least 80% of their payments in 21 days”. The graph above shows the effectiveness of payments in May 2021 and indicates that even with a year of practice to deal with the pandemic and unemployment claims back to normal, South Dakota remains woefully ineffective in providing unemployment assistance. Nebraska and Iowa are also letting their workers down, while Minnesota, North Dakota and Wyoming all rank first among states for UI efficiency.

Maybe instead of hoarding federal pandemic aid for build a budget surpluswe should be spending our pandemic dollars to improve the government’s basic efficiency in delivering the assistance required by law.

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