The United States Is Rapidly Spending Money For The Payment Of Unemployment Benefits
The New York authorities are asking the Federal Government for an interest-free loan of $4 billion to pay unemployment benefits for those who lost their earnings in connection with the coronavirus pandemic.
New York and the other US States are rapidly spending funds allocated to help millions of people left without work, according to an analysis of data from the US Treasury Department, conducted by The Wall Street Journal.
Almost half of the States have recorded a double-digit percentage drop in trust funds since the end of February. These funds are used to pay regular unemployment benefits, with additional payments of $600 for workers who were cut during the coronavirus pandemic funded from a Federal incentive package.
New York spent about half of the trust Fund's funds from late February to mid-April, one of the highest rates among States. "All benefits are being paid, and for this to continue, the state has asked the government for interest - free loan of up to $4 billion," said New York labor Department spokeswoman Deanna Cohen.
Massachusetts also spent about half of the state's available funds. The third highest figure was recorded in California - since February, the amount of funds in the state Fund has decreased by almost 40% and by mid-April amounted to $1.9 billion.
California plans to borrow funds from the Federal government to cover the cost of unemployment benefits, state authorities said. Between March 15 and April 11, more than $975 million was spent on benefits.
Economists say that in the coming weeks, even more States may spend a significant amount of money on benefits, which will also force them to seek help from the country's authorities.
After the 2008 global financial crisis, States also sought help from the Federal government to fund unemployment benefits, with some taking years to pay off their debts.
More than 22 million Americans applied for unemployment benefits in the month ending April 11. Two weeks ago, the number of people applying for benefits in California was 660,000. In New York, this figure was almost 400 thousand, in Massachusetts -- 100 thousand.
No state has yet spent all its available funds, but state authorities say they are already preparing for this possibility.