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The Practical Cost of Unemployment

The cycle of poverty begins when a struggling family encounters a small, extra expense for which they just couldn't prepare - an unexpected car repair or an unplanned illness that results in an extra trip to the doctor, for instance.

But when a family loses its income because the primary breadwinner can't afford the simple medical care, car repair or other expense that would've kept him or her gainfully employed, that family has no choice but to turn to the state for support. We all know that when a person becomes newly unemployed and must depend on the public welfare system to survive, that person loses a measure of dignity. But unemployment also takes a devastating economic toll, both on the newly unemployed person's family and on the state that family calls 'home'.

When a Family of 3 becomes Newly Unemployed For One Month For 6 Months For 12 Months
Avg. Net Amount Family Would've Earned if Employed (1 person working 40 hours/week @ $10 an hour) $1,481.43 $8,888.58 $17,777.16
Avg. Total TANF (welfare) benefit the state will pay $408.43 $2,450.58 $4,901.16
Avg. Total Food Stamp Benefit State Will Pay $313.60 $1,881.60 $3,763.20
Subtotal: Family's New Income From the State $722.03 $4,332.18 $8,664.36
Total Net Income Lost to Family $759.40 $4,556.40 $9,112.80

See how we calculated these figures.

Next: The Long-Term Value of a Short-Term Helping Hand
Previous: Introduction