Stimulus Funds Designed to Help Unemployed

A recent report by the National Employment Law Project says nine states qualify for $876 million in unemployment benefits. The money would be available for people unemployed longer than 12 weeks. Arkansas, Iowa, Louisiana, Maryland, Mississippi, Montana, Oklahoma, Utah and Wyoming have turned down money from the American Reinvestment and Recovery Act of 2009.

In order to receive that funding, state legislatures must pass laws to authorize state employment agencies to use the money to help the unemployed. Despite high unemployment, some of these states have said they don't need it.



Arkansas may be onto something. Of the nine states that haven't received this federal funding, only one has an unemployment rate higher than the national average. The Bureau of Labor Statistics reports Mississippi's unemployment rate stands at 10.1 percent. The other eight states all have unemployment rates at 8 percent or lower, a full percentage point better than the national average.

The states that have rejected the stimulus funding feel they might be satisfied with their level of unemployed as compared to the rest of the country.

Some states feel they can't afford to dole out the money, a perception economists see as detrimental to those suffering without a job. The federal government covers the costs of handing out the additional funds.

Giving an estimated 236,000 citizens more spending money is seen as a way to jump-start local economies as these consumers will likely use the money to pay for food, goods and even pay their rent or mortgages. Unemployment benefits allow consumers to spend money they wouldn't otherwise have which in turn makes local economies better even in a small way.

Pumping $100 million into each of these nine states would only benefit everyone involved. Think of it this way--what if someone invested the extra unemployment benefit to buy a suit or dress to actually get a job? This money just paid even more dividends to the person who received them.

What are these states afraid of? The benefits are only temporary anyway and disappear after 20 weeks of unemployment. If their concern is a creation of a welfare state it's a bit too late for that -- as many as 17 percent of Americans are currently on some kind of government assistance according to USA Today.

Getting more help to more people just makes sense. Unemployment benefits aren't a long term solution as they stop the economic bleeding in the short term. Once the benefits are used up, they go away and states can go back to their own model of welfare benefits.

Because the rate of Americans on welfare is already greater than the unemployment rate, rejecting these extra funds to help citizens simply doesn't add up.