Rising Unemployment Could Cost Nevada Extra $1 Million/Month

With national unemployment rising once again in September to 9.8 percent, many are wondering what the verdict will be when state figures are released later in the month.

Persistent joblessness is also causing many to drop out of the workforce, as the US Department of Labor reported that the civilian labor force declined by more than 500,000, or 0.3 percentage points in September, meaning the national unemployment rate would have topped 10 percent if jobseekers had not dropped out of the running.

An additional 9.2 million individuals nationwide are working part-time due to slack work or business conditions, or because they could only find part-time work. If these individuals were added to the ranks of the unemployed, the unemployment rate would be closer to 15 percent nationwide.

“If Nevada follows suit with the nation and reports a one-tenth of a percent increase in the unemployment rate in September, or an increase from 13.2 percent to 13.3 percent, statistics indicate the state could owe another $1.1 million per month in unemployment benefits,” said Jeremy Aguero of Applied Analysis.

Each time the unemployment rate in Nevada increases by one-tenth of a percent, 1,400 people have lost their jobs. Assuming around 65 percent of individuals qualify and apply for unemployment benefits, the state owes an additional $280,000 each week, or $1.1 million per month, for each one-tenth of a percent increase in the unemployment rate.

Increases in the unemployment rate have a ripple effect on many aspects of the state’s economy and on demands on state government programs. “The increase in demand on an already-over-taxed system will continue to have ramifications for our state’s social services,” said Mary Lau, president of the Retail Association of Nevada.