06/22/2021

A Downturn That Costs Jobs Could Catch the U.S. Unprepared

In 2009, mired in the depths of recession, Ohio’s unemployment trust fund went broke, prompting the state to borrow $2.6 billion from the federal government so it could keep sending checks to unemployed workers.

Now, with the state unemployment rate down to 4.4%, the debt has been repaid and the trust fund has started to rebuild, but not enough to leave Ohio with sufficient funds to manage another economic downturn.

That challenge exists across the country: Low unemployment has led to a recovery in state unemployment funds, but the recovery is mixed and incomplete. State unemployment trust fund reserves hit $55.2 billion last year, up substantially from $9.5 billion in 2010. Despite the rebound, more than half of U.S. states lack enough unemployment funding to be prepared for another recession, Labor Department data show.

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