Unemployment Insurance

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In Minnesota, state legislators have created a new program to better help displaced workers turn a lost job into an entrepreneurial opportunity. Meanwhile, that state and a growing number of others in the Midwest are trying to keep more people from losing their jobs in the first place — by reworking unemployment-insurance programs in ways that encourage employers not to lay off workers when business is slow, but to instead reduce their hours.

According to the Associated Press, the number of claims for unemployment benefits fell slightly last week, indicating modest job growth. When the number of applications falls below 375,000 a week, it implies hiring is strong enough to reduce the unemployment rate. Some recent data on unemployment rate dropping from 9 percent in April 2011 to 8.1% last month may suggest that the economy is...

As the national unemployment rate hovers around 9.1% and with state unemployment rates as high as 12.9 percent, states are still struggling to pay out unemployment benefits. In September 2006, Michigan became the first state in recent history to borrow money from the federal government so that it could continue to send out unemployment checks. Now, 28 states plus the Virgin Islands are currently borrowing money and next month, many will have to start paying interest on those loans.  For most, the bill will be in the millions of dollars.  

The most recent BLS jobs report in May offered good and bad news.  The good news: 54,000 jobs were created.  The bad news: only 54,000 jobs were created. Because the economy needs to add around 125,000 jobs every month just to break even and keep pace with new entrants into the workforce, the unemployment rate inched up to 9.1%.