States Grapple with Cost of Jobless Benefits as Pandemic Worsens

The steep and climbing cost of unemployment during the Covid-19 pandemic could give state policymakers déjà vu from the Great Recession—when states used unemployment tax increases and benefit cuts to rebuild unemployment trust funds depleted by millions of job losses.

That’s assuming states don’t get a significant federal bailout, which policy analysts say looks less likely if Republicans hold on to their majority in the Senate.

This year’s record-high unemployment benefits during the pandemic have amounted to more than $500 billion. In less than a year, payments have dwarfed the $293 billion in benefits paid between 2008 and 2013 during ...