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Report says Tennessee unemployment benefits among bottom in nation

By Nadia Ramlagan, Tennessee Public News Service

Tennesseans are filing for unemployment in record numbers, yet a new report from the Sycamore Institute says the state’s unemployment benefits and related employer taxes are among the lowest in the nation.

“Over the last two decades, Tennesseans have been less likely than other out-of-work Americans in other states to get unemployment benefits,” said Sycamore policy director Mandy Pelligrin. “In other words, our recipiency rate is fairly low. And at the same time that that’s been going on, the value of the benefits that Tennesseans receive from the program has fallen.”

According to the report, Tennessee’s unemployment insurance program provided benefits to around 21% of unemployed workers during the first quarter of 2020. The state currently ranks in the bottom eight among states for the number of out-of-work residents who are receiving benefits.

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Pellegrin said policymakers might start by taking a look at how Tennessee’s unemployment trust fund is supported. Right now, the program gets padded with cash during good times, and is paid out to people when the economy goes downhill.

“Of course, the way the taxes are structured, like they are in nearly every state, is that when your funds get really large, the taxes actually go down,” she said. “So, there are some questions about is that actually the best way to to do it.”

The additional $600 per week in federal benefits some Tennesseans are receiving through the CARES Act is slated to run out at the end of July. Pellegrin noted it remains uncertain what effect that might have on the economy.

“At the same time, policymakers can’t control what people choose to do if they do fear for their health,” she said. “So, people (are) choosing to stay home and not go to their local businesses because they fear they might get or spread the virus. “

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More than 600,000 people in Tennessee have applied for unemployment benefits since the start of the COVID-19 pandemic.

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