More Americans Drawing Income from Unemployment, Social Security

Emma Lowenberg, InternBy Emma Lowenberg, Intern

The fact that the economy is still struggling is not news to anyone. The national unemployment rate has increased steadily since February. Now, at 9.2%, it is not too far from its peak of 9.9% in December 2009.

Nationally, the personal income of 20% of Americans comes from the government through programs like Social Security and unemployment benefits, according to a report in The New York Times. The percentage is even higher in the economically worst-off states – like Florida, Michigan, Ohio, and Arizona.

Those who depend on this assistance are running out of luck, though, and so is the economy at large. Extended jobless benefits are set to expire at the end of the year, leaving nearly 7.5 million unemployed Americans without an important lifeline and risking greater damage to an all too fragile recovery. The still tentative agreement in Washington, D.C. to raise the debt limit appears to rule out any additional extensions of unemployment insurance for workers in 2012.

The ratio of job growth to job seekers remains dismally low. In Arizona, for example, there are 10 job seekers for every job opening. According to economist Mark Zandi of Moody’s Analytics, the amount of transfer dollars being paid out has increased by 35% since 2007.

Some cash-strapped states are shortening the length of unemployment benefits by as much as 20 weeks. To counter the effects of benefit cutoffs, we would need to see massive job creation, but that’s just not on the horizon.

The data below show the change in percentage of income comprised of transfer payments by county in Pennsylvania from 2007 to 2009 (the data is sorted by the percent change in transfers). While some of this change can be attributed to naturally aging populations, much is undoubtedly the result of higher unemployment rates.

TRANSFERS AS A SHARE OF TOTAL PERSONAL INCOME 2007 TO 2009
County 2007 2009 Change % Change
Fulton 20% 27% 7.6 38%
Cameron 28% 37% 9.9 36%
Adams 16% 22% 5.5 33%
Elk 23% 30% 7.2 31%
Huntingdon 24% 30% 6.1 25%
Bucks 11% 14% 2.7 25%
Lancaster 15% 19% 3.7 25%
Franklin 17% 21% 4.0 24%
Columbia 22% 27% 5.1 24%
York 15% 18% 3.5 23%
Juniata 20% 25% 4.7 23%
Montgomery 9% 11% 2.1 23%
Berks 17% 21% 3.8 23%
Monroe 17% 20% 3.6 22%
Cumberland 13% 16% 2.9 22%
Erie 22% 26% 4.6 21%
Bedford 24% 29% 5.1 21%
Wayne 23% 28% 4.9 21%
Perry 17% 21% 3.6 21%
Dauphin 16% 19% 3.2 21%
Lehigh 17% 20% 3.3 20%
Wyoming 21% 26% 4.3 20%
Mifflin 26% 32% 5.3 20%
Union 17% 21% 3.4 19%
Crawford 26% 30% 4.8 19%
Northampton 17% 20% 3.1 19%
Jefferson 26% 31% 4.9 19%
Centre 14% 16% 2.5 18%
Lebanon 17% 20% 3.2 18%
Carbon 23% 28% 4.2 18%
Snyder 26% 30% 4.6 18%
Potter 25% 29% 4.5 18%
Armstrong 24% 28% 4.3 18%
Mercer 26% 30% 4.6 18%
Butler 16% 19% 2.8 17%
Clearfield 27% 31% 4.6 17%
Clarion 26% 30% 4.4 17%
Lycoming 22% 25% 3.6 17%
McKean 25% 29% 4.1 16%
Lawrence 27% 31% 4.4 16%
Warren 24% 28% 3.9 16%
Tioga 26% 31% 4.2 16%
Schuylkill 25% 29% 4.0 16%
Luzerne 23% 26% 3.5 15%
Pike 17% 19% 2.6 15%
Indiana 22% 25% 3.3 15%
Northumberland 24% 28% 3.7 15%
Bradford 23% 26% 3.4 15%
Delaware 14% 16% 2.1 15%
Blair 25% 28% 3.7 15%
Allegheny 17% 19% 2.4 14%
Lackawanna 22% 25% 3.1 14%
Clinton 24% 28% 3.4 14%
Washington 20% 22% 2.7 14%
Westmoreland 20% 23% 2.8 14%
Fayette 30% 34% 3.9 13%
Somerset 26% 29% 3.2 12%
Beaver 24% 27% 2.9 12%
Sullivan 30% 34% 3.6 12%
Susquehanna 22% 24% 2.5 11%
Montour 19% 21% 2.0 11%
Cambria 28% 31% 3.0 10%
Venango 32% 35% 2.9 9%
Philadelphia 26% 28% 2.3 9%
Chester 8% 9% 0.5 6%
Greene 28% 30% 1.4 5%
Forest 38% 39% 1.6 4%

Source. Keystone Research Center analysis of Bureau of Economic Analysis Data

Emma Lowenberg served as a 2011 summer intern with the Keystone Research Center and Pennsylvania Budget and Policy Center.

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