Texas got a smaller piece of stimulus pie

Workers here are less likely to apply for jobless benefits

Texas received less funding per person from the $2 trillion federal stimulus law approved in the spring, in part because unemployed workers here are less likely to apply for benefits than in other states, an analysis by the Federal Reserve Bank of Dallas shows.

Texas received nearly $15 billion of the $224 billion the federal government sent to states by the

Coronavirus Aid, Relief and Economic Security (CARES) Act, the Dallas Fed reports. Payments through an emergency unemployment program were $675 per capita in Texas, 25 percent lower than the national average of $900.

Texas for decades has had a lower share of its labor force receiving benefits than the nation as a whole. During the pandemic, the national rate of workers collecting benefits — calculated by comparing continuing claims data with the number of unemployed — has run about 50 percent higher than in Texas.

“That is historically true,” said the report’s author, Anil Kumar, senior economist at the Dallas Fed. “It was lower in the good times, the Great Recession and it’s been lower during COVID-19.”

Several factors play into why Texans are less likely to apply for benefits, Kumar said.

First, fewer workers in Texas belong to unions, which, studies show, inform members about the benefits and help them access unemployment programs.

The Texas labor force also has higher share of young workers and workers without college degrees, groups that also file for unemployment benefits less frequently.

Texas has more stringent eligibility criteria for unemployment benefits than do other states. To qualify here, applicants must earn $2,516 during the base period — the first four of the last five quarters before a claim is filed — compared to $1,300 in California.

Finally, Kumar said, the state’s job losses were less severe and the unemployment rate lower than nationally at the onset of the pandemic.

Texas lost 1.3 million jobs, or about 11 percent of payroll employment, in April, compared to a nearly 14 percent plunge nationally.

The Texas unemployment rate peaked at 13.5 percent, compared to 14.7 percent nationally.

It is possible that Texas started to receive higher per capita payments in November when the state’s unemployment rate surpassed that national rate. The Texas unemployment rate jumped more than a point in to 8.1 percent from 6.9 percent. Nationally, it was at 6.7 percent.

But it’s hard to know for sure, Kumar said.

Even with a new relief package approved by Congress, it’s likely Texas again will receive fewer benefits per capita, given the historical patterns.