“Why work if I make $1,800 a month in unemployment benefits?” was a question asked to me by someone I met in the hot tub. At 28, Julie has been on unemployment for over 20 weeks. Her old job was as a designer for Billabong USA. During her time off, she’s been selling some of her paintings via Facebook where she posts her portfolio. Of course, all her art earnings are not reported, otherwise, her $450 weekly benefits will start getting garnished after the first $25 dollars of income earned.
We’ve stayed in touch over the year and she’s been generous enough to give me some insights into the unemployment process. She’s planning a two month trip to Jamaica with her friends, and she wants to do the right thing by suspending her unemployment benefits for that time period because she won’t be looking for work.
Despite her good intentions, she could not get through to the California Employment Development Department (edd.ca.gov) after calling 58 times. That’s right, 58 times!!
So guess what? She’s going to Jamaica for two months and will have her friend back in California fill out her bi-weekly continued claim form. One of the questions she will have to answer is, “Did you look for work during the week?” She will answer, “No.”, but undoubtedly, her unemployment benefits will still hit her Bank of America debit card like clockwork.
WOULD YOU WORK IF YOUR UNEMPLOYMENT BENEFITS EQUALED HALF YOUR EARNINGS?
$1,800 equals $21,600 a year in unemployment benefits. Back during the financial crisis of 2009-2011, President Obama has graciously allowed all Americans to collect up to 99 weeks, or $44,550 in unemployment benefits. Now that the financial crisis is over as of 12/8/2015, there is no more federal emergency unemployment benefits. The best we can now get is 26 weeks maximum by state on average.
If you make $44,000 a year, which is the income level you need to have in order to qualify for maximum benefits, would you bother finding another job making $35,000-$44,000 a year if you could make $21,600 a year ($1,800/month for six months) and do nothing?
Earning money under the table is rampant. You can sell artwork like my friend, or teach lessons for cash. There are random hole in the wall restaurants who have “no credit card” policies. Why you ask? Because they are not reporting their full income and have separate books for the IRS. We all know that accepting credit cards is way easier than only accepting dirty cash in a restaurant.
Take a look at income profiles of financially free people who are hustling to make more money on the side. There are a lot of people making a lot more money beyond their W2 income.
I don’t feel annoyed at all at my friend for collect unemployment benefits. She is holding out to the very end to find that ideal job. The government has allowed her to be patient, and that’s exactly what she’s doing. In fact, I feel happy that she gets to receive some benefits back from the government, since so few of us taxpayers even get 20% of what we pay to the government back.
THERE ARE STATES WITH EVEN BETTER UNEMPLOYMENT BENEFITS!
After doing some more digging, I’ve come to realize that California doesn’t even have the best unemployment benefits despite being a high cost State. Hawaii has even more generous benefits at around $525 a week, or $2,100 a month!
Percentage of Weekly Wages Covered By Benefits: 54.3%
Average Weekly Benefit Amount: $416
Unemployed Receiving Benefits: 43% (Seventh Highest)
> Unemployment: 6.3% (Ninth Highest)
2. Rhode Island
Percentage of Weekly Wages Covered By Benefits: 45.9%
Average Weekly Benefit Amount: $380
Percentage of Unemployed Receiving Benefits: 27% (Eighth Lowest)
Unemployment: 11% (Fourth Highest)
Percentage of Weekly Wages Covered By Benefits: 44.9%
Average Weekly Benefit Amount: $321
Percentage of Unemployed Receiving Benefits: 40% (16th Highest)
Unemployment: 6.1% (Sixth Lowest)
Percentage of Weekly Wages Covered By Benefits: 44.7%
Average Weekly Benefit Amount: $326
Percentage of Unemployed Receiving Benefits: 35% (20th Highest)
Unemployment: 6.8% (12th Lowest)
5. North Dakota
Percentage of Weekly Wages Covered By Benefits: 44.6%
Average Weekly Benefit Amount: $310
Percentage of Unemployed Receiving Benefits: 36% (24th Highest)
Unemployment: 3.6% (Lowest)
6. New Mexico
Percentage of Weekly Wages Covered By Benefits: 43.7%
Average Weekly Benefit Amount: $316
Percentage of Unemployed Receiving Benefits: 32% (28th Highest)
Unemployment: 8.1% (23rd Highest)
Percentage of Weekly Wages Covered By Benefits: 43.3%
Average Weekly Benefit Amount: $337
Percentage of Unemployed Receiving Benefits: 34% (22nd Highest)
Unemployment: 6.2% (Eighth Lowest)
Percentage of Weekly Wages Covered By Benefits: 43.1%
Average Weekly Benefit Amount: $316
Percentage of Unemployed Receiving Benefits: 27% (15th Lowest)
Unemployment: 7.6% (17th Lowest)
Percentage of Weekly Wages Covered By Benefits: 42.5%
Average Weekly Benefit Amount: $272
Percentage of Unemployed Receiving Benefits: 48% (5th Highest)
Unemployment: 7.4% (14th Lowest)
Percentage of Weekly Wages Covered By Benefits: 42.3%
Average Weekly Wage Paid: $384
Percentage of Unemployed Receiving Benefits: 33% (25th highest)
Unemployment: 9.2% (16th highest)
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Updated for 2017 and beyond. Maximum unemployment benefits is now only 26 weeks provided by the state. The good times of an extra 26 weeks to 73 weeks from the federal government is over because the economy is strong again!