Number of Unemployment Claims for Out-of-Work Minnesota State Employees Expected to Increase

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As of noon today, the Department of Employment and Economic Development (DEED) has received over 12,000 new applications for unemployment benefits from state employees. That number is expected to climb to 14,000 by the day’s end. Weekly benefits equal about half of an individual’s gross weekly income, to a maximum of $578/week. This will cost the Unemployment Insurance (UI) Trust Fund approximately $9.2 million per week starting next week, according to DEED. However, this figure is well short of the 23,000 number of laid off employees that the State’s economist Tom Stinson referenced in an article published in yesterday’s Washington Post. In the article, it was speculated that the shutdown could cost the state as much as $23 million per week as a result of UI benefits paid directly to state employees and secondary loss in weekly spending by state employees. Currently, the state pays approximately $2.4 billion in weekly state wages. Stinson does not believe that the shutdown will result in a recession, but it will be a drag on the state’s economic growth, according to the article. Some of the discrepancy between Stinson’s numbers and DEED’s actual numbers may be caused, ironically, by the fact that some of the individuals in charge of collecting and interpreting this type of data have been laid off.

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