Where $600 Unemployment Doesn’t Cover Lost Wages - MagnifyMoney

States Where the $600 Unemployment Supplement Doesn’t Cover Lost Wages

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With the coronavirus pandemic pummeling the U.S. economy, unemployment claims have spiked to historic levels. As a result, the U.S. government included a key measure in the $2.2 trillion economic relief package designed to help unemployed workers weather the storm: a supplement of $600 per week added to state unemployment payouts.

The $600 supplement has been controversial, with some seeing it as a much-needed lifeline and others arguing it’s a disincentive to return to work. A new study from MagnifyMoney sheds light on the impact the supplemented unemployment payments actually have as a replacement for the average worker’s lost wages — and found that it varies significantly from state to state. Our study also explores how standard unemployment payments in each state will stack up against lost wages once the supplemental provision expires at the end of July.

Key findings

  • We estimate that 52.6 million Americans, or 39% of those who are eligible for unemployment benefits, would see their weekly incomes drop if they were laid off. This is the case even with the $600 weekly supplement.
  • In fact, the average worker in 21 states and the District of Columbia would not break even with the $600 supplement. This includes some of the most populous states, such as New York, California, Illinois and Florida.
  • If the $600 supplement expires, the average worker in 36 states and the District of Columbia would bring home half of their previous earnings or less.

States with the largest percentages of workers for whom supplemented unemployment benefits do not replace lost wages

Overall, our study reveals that even with the beefed up unemployment benefit of an additional $600 per week, approximately 39% (or 52.6 million Americans) who are eligible for unemployment benefits would see their weekly incomes drop. However, the percentage of workers who would experience lower incomes — even with the supplemented unemployment benefit — ranges wildly from state to state, from a whopping 63% of eligible workers in Washington D.C. to just 26% of eligible workers in Montana.

We found that the District of Columbia has the highest percentage of eligible workers — 63% — for whom the supplemented unemployment benefits would fall short of covering their complete lost wages.

Meanwhile, about half of eligible workers (52%) in Maryland would not receive enough in supplemental unemployment benefits to completely replace their wages. This was followed by 50% of eligible workers in Alaska, 48% of eligible workers in Virginia, 45% of eligible workers in New Hampshire and 44% of eligible workers in Arizona.

States with the biggest shortfalls between lost wages and supplemented unemployment benefits

Unemployment insurance plus $600 falls short of lost earnings in 21 states and the District of Columbia

RankStateAverage Weekly WageWeekly Benefit + $600 for Average Wage$ Weekly Shortfall% Weekly Shortfall
1District of Columbia$1,851$1,044$80743.6%
4New York$1,314$1,104$21016.0%
16New Hampshire$1,075$1,027$484.5%
20North Carolina$972$950$222.3%

* Maximum weekly benefits do not include supplements for dependents, which vary according to different formulae within and between the states where it is available.Notes: Average weekly wage as of Q3 2019, including all workers in all industries for both public and private employers.Source: MagnifyMoney.com

Despite the common argument that the supplemented unemployment benefits enacted by the Coronavirus Aid, Relief, and Economic Security (CARES) Act serve as a disincentive for finding a job, our study found that in 21 states and the District of Columbia, the average worker’s supplemented unemployment benefits are still not enough to cover the entirety of their lost wages.

States have vast discrepancies in the amount of the shortfall between the supplemented unemployment benefits and average lost wages, as each state uses its own unemployment compensation formula. Additionally, many states also have differing maximum payment amounts allowed.

The average workers receiving unemployment benefits that fall the shortest of their average weekly earnings are those in the District of Columbia. According to our study, workers in the nation’s capital boast an average weekly wage of $1,851. However, the maximum amount that a worker in the District of Columbia could collect in unemployment with the $600 supplement is $1,044, based on the city’s current unemployment formula. This means that the average worker is left with 44% less — or $807 — each week.

Following the District of Columbia with the biggest shortfall between supplemented unemployment payments and lost wages is California, where the average worker earns a weekly wage of $1,309. However, with a maximum weekly unemployment payment (including the $600 supplement) of $1,050, the average Californian worker is bringing in 20% less — or $259 — per week.

Following California with the biggest shortfalls between average lost wages and supplemented unemployment benefits is Arizona, with an 18% shortfall between average lost wages and the state’s maximum supplemented unemployment payment; New York, with a 16% shortfall; and Virginia, with a 13% shortfall.

States with the biggest shortfalls between lost wages and standard unemployment benefits

Even though our study found that the supplemented unemployment benefit is still not enough for the average worker in many states to break even with their lost wages, the additional $600 benefit is scheduled to expire on July 31. With that deadline looming, our study found that once the supplemented $600 expires, the average worker in 37 states would bring in half or less of their previous earnings through their state’s standard unemployment benefits.

In particular, workers in Arizona stand to lose the most without supplemented unemployment benefits. The average worker in Arizona would see a weekly income loss of 76% — or $778 a week — on the standard state unemployment benefit. The average weekly wage in the Grand Canyon State is $1,018, which comes out to a weekly unemployment benefit of $240 under the state’s compensation formula.

The same goes for workers in the District of Columbia, who would also bring in 76% less with the current standard state benefit cap on unemployment benefits. Trailing the District of Columbia with the biggest shortfalls between average weekly earnings and the maximum standard weekly unemployment benefits are Louisiana, Tennessee and Florida.


Using unemployment formulas reported by the Department of Labor and included in CARES Act material, we calculated the weekly wage at which a worker would take home the same amount from unemployment, plus the $600 weekly supplement, in each state.

We then estimated the number of people in each state who would qualify for unemployment but earned more than the break-even amount using microdata from the 2018 American Community Survey (ACS) from the U.S. Census and hosted by IPUMs. We excluded anyone who was unemployed at the time of the survey, worked fewer than 13 weeks in that year or earned less than $1,885 during that year ($1,885 is equivalent to 20 hours a week for 13 weeks at the federal minimum wage).

Cut off income was scaled down by 6% to account for the average increase in hourly wages between 2018 and 2020 reported by the Bureau of Labor Statistics. Weekly earnings of ACS respondents were calculated by dividing reported annual wages by the hours they reported working in the same year; because the weeks worked is reported in ranges, we used the midpoint of the range, except for 51 to 52 weeks, for which we used 52.

Secondarily, we calculated the weekly unemployment benefit, both with and without the $600 supplement, for the average wage in each state, as reported by the Bureau of Labor Statistics, as of Q3 2019 (last available).