In this article, we will take a look at the 15 states with the worst unemployment benefits in 2024. If you would like to skip our discussion on the US economy, you can go to the 5 States With the Worst Unemployment Benefits in 2024.

While headlines boast of a historically low national unemployment rate of 3.7% in 2023, there have been massive layoffs totaling 19.8 million during the last year as compared to 17.6 million layoffs in 2022. In January 2024, 82,307 job cuts were announced, which is an increase of 136% from December 2023.  Moreover, many different companies across the USA have announced job cuts this year in order to curtail rising costs amid uncertain economic conditions.  In fact, a survey conducted by The Conference Board revealed that 23% of the CEOs are planning to lay off employees in the next 12 months. This is 13% more than in the previous quarter.

The brunt of these layoffs is not evenly distributed across sectors. Technology companies, while navigating the current economic uncertainty, are witnessing a significant number of job cuts. In January 2024 alone, Amazon.com Inc (NASDAQ:AMZN) announced 5% job cuts in its audiobooks and podcast division, 35% in the streaming unit, and several hundred in the streaming and studio operations. Meanwhile, Microsoft Corporation (NASDAQ:MSFT), Salesforce, Inc. (NYSE:CRM), and Alphabet Inc. (NASDAQ:GOOG) also announced hundreds of layoffs in the same month. So far, more than 140 companies in the tech space have laid off over 34,000 employees in 2024. In 2023, more than 1,160 tech companies laid off 262,000 employees. The major reason for the significant number of layoffs is the slowdown after the hiring spree within the sector in recent years.

Here's what Baron Funds said about Amazon.com Inc (NASDAQ:AMZN) in its Q4 2023 investor letter:

Media is another industry that has reported many job cuts recently. In 2023, 20,324 layoffs were announced in this industry. Many big names in media have announced layoffs in 2024, including Business Insider (8% of staff), Los Angeles Times (94 journalists), and Paramount Global (3% of the workforce). The main reason is the rise in popularity of the Internet as a one-stop shop for advertisers. Moreover, consumers are becoming more price-conscious as far as news or informational articles are concerned. Other industries announcing a significant number of layoffs include retail and even automotive. The drop in consumer spending, especially in retail, and the demand for a better bottom line have both led to a drive to cut costs, thereby cutting jobs.

In addition to variation by industry, there is a lot of disparity in the unemployment rate by state. The lowest unemployment rate by state in 2023 was in Maryland, and the highest unemployment rate by state in the same year was in Nevada. In this scenario, unemployment benefits serve as a crucial safety net, providing temporary financial assistance to individuals who lose their jobs through no fault of their own. However, unemployment benefits by state vary significantly in terms of nature and duration, highlighting stark disparities in how different regions address unemployment. Each state has a different methodology for calculating unemployment benefits as well as the employment tax rate, which provides the funds for these benefits.

You can also check out the 15 States With the Best Unemployment Benefits in 2024 here.

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Our Methodology

To compile our list of the 15 states with the worst unemployment benefits in 2024, we made use of three weighted metrics, namely the average weekly benefit (weight of 0.4), cost of living index (weight of 0.3), and the number of weeks these benefits extend (weight of 0.3). We then ranked the worst states for unemployment benefits on all three of these metrics. Then, we computed a weighted average of states' rankings across these three criteria and adjusted the final rankings accordingly. The states with the worst unemployment benefits in 2024 have been ranked in descending order of their scores.

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15 States With the Worst Unemployment Benefits in 2024

15. Connecticut

Weighted Average Score: 7.2

Connecticut provides unemployment benefits for a period of 26 weeks. The state achieved a noteworthy milestone in economic recovery from the COVID-19 pandemic in November 2023, when employment levels surpassed pre-pandemic levels.

14. Maine

Weighted Average Score: 7.1

Maine experienced an increase in its unemployment rate, reaching 3.2% in January 2024. Despite this upward trend for the fifth consecutive month, the rate remained lower than the overall US unemployment rate and marked the lowest rate on record for the state. However, Maine's unemployment insurance system has faced challenges in meeting the needs of its citizens.

13. Arkansas

Weighted Average Score: 7.1

Arkansas ranks thirteenth on the list of states with the worst unemployment benefits in 2024. In addition to the low cap on unemployment benefits, the maximum duration of the benefits in Arkansas is also short as compared to the standard 26 weeks practiced in many states. The unemployment rate in Arkansas was 3.4% in December 2023.

12. Virginia

Weighted Average Score: 6.8

As of February 2023, the unemployment insurance program in Virginia offers a maximum of 26 weeks of benefits. The benefit amounts vary, starting from a minimum of $60 per week and reaching a maximum of $378 per week. Virginia infrequently revisits its unemployment benefits structure. However, the state has a low unemployment rate, which was recorded at 2.7% in December 2023.

11. District of Columbia

Weighted Average Score: 6.7

In December 2023, the unemployment rate in the District of Columbia was 5.1%, showing a 0.1% increase from November 2023 and remaining higher than other states. The District of Employment Services (DOES) has faced widespread criticism for delays in processing unemployment benefit claims amid the COVID-19 pandemic. In response to this criticism, DOES has revamped its unemployment insurance benefits system to simplify the application process and address issues related to fraud.

10. Tennessee

Weighted Average Score: 6.2

With an unemployment rate of 3.5% in December 2023, Tennessee is another state with an average unemployment rate and low unemployment benefits. The unemployment benefits in Tennessee are less than the minimum wage. This leaves the unemployed with hardly any money for sustenance.

9. South Carolina

Weighted Average Score: 6.1

South Carolina faces challenges in its unemployment benefits system, not only offering low benefits but also presenting complexities in the application process. With a complex system in place, only 14.8% of the unemployed population manages to access unemployment benefits in the state. Furthermore, South Carolina's eligibility period for unemployment benefits stands at 20 weeks, which is shorter compared to the standard 26 weeks practiced in many states.

8. New Hampshire

Weighted Average Score: 5.8

The unemployment rate in New Hampshire was recorded at just 2.5% in December 2023, lower than the national average. While the state’s economy managed to rebound from the COVID-19 recession in a fairly short amount of time, the rising cost of living has increased the citizen’s hardships.

7. California

Weighted Average Score: 5.8

In California, the unemployment rate rose to 5.1% in December 2023. Approximately one in four unemployment benefits claims were rejected during the pandemic for various reasons. Additionally, California's unemployment benefits have not been updated for over two decades and do not adequately cover the cost of living. Hence, California is considered one of the states with the worst unemployment benefits. Silicon Valley, situated in California's Bay Area, continues to be the largest tech hub, with companies like Amazon.com Inc (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG) located there.

6. Delaware

Weighted Average Score: 5.7

In Delaware, a bill was recently passed to improve the state’s unemployment benefits, which have been constant since 2019. As of December 2023, the unemployment rate in Delaware stands at 4.20%, indicating no change from the previous month and a decrease from the 4.60% recorded in 2022. This figure is also below the long-term average of 5.25%.

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Disclosure: None. 15 States With the Worst Unemployment Benefits in 2024 is published on Insider Monkey.