Recently, I estimated how a federal civilian workforce reduction of 15 percent would affect state Unemployment Insurance (UI) programs. I found that some states, like Washington and Maryland, would see monthly UI costs increase by about $8 million (a 5 percent and 24 percent monthly increase, respectively) and that more than two dozen states would see monthly UI budgets expand by 5 percent or more.
These geographic differences can be attributed to a variety of factors—number of federal workers in the state, the average and maximum UI benefit offered, and existing UI trust funds. Here, I take the analysis a step further to see how voting patterns from the 2024 presidential election at the state level correlate with the degree of UI budget increases.
When looking at just the seven states with monthly percent UI increases above 10 percent, we see four voted for Trump and three for Vice President Kamal Harris. Both states adjacent to Washington DC—Maryland (24 percent) and Virgina (19 percent)—see large increases, as do the two states with large federal workforces, Alabama (13 percent) and Oklahoma (12 percent). The remaining states— Hawaii (22 percent), Montana (13 percent), and South Dakota (17 percent) sit on opposite sides of the spectrum. Hawaii has a very generous and widely-used UI program, whereas Alabama and Oklahoma have small UI expenditures to begin with. (Washington, DC, which is not a state and is not included in this analysis, would see their monthly UI costs double under this scenario.)
If we compare increased UI costs with the share of people who voted for Donald Trump in the 2024 election, we see little correlation at first. The three states that would see the largest increases (Virginia, Hawaii, and Maryland) all committed their electoral votes to Harris, while more than 55 percent of voters the next five states with the largest cost increase (Mississippi, Oklahoma, Montana, Alabama, and South Dakota) chose Trump. Nationwide, a 1 percent increase in the Trump vote share is corelated with a 0.67 percent increase in monthly UI costs.
While the three largest UI monthly cost percent increases are in states that voted for Harris, 18 of the 26 states that would see an increase of at least 5 percent voted for Trump. If we were to remove those top three states from the sample, the elasticity between the Trump vote share and monthly UI cost is obviously much stronger and moves from 1:0.67 to 1:1.5.
Ultimately, the Administration’s actions to cut the federal workforce will not only affect Democrat-leaning states. People working in states across the country will be at risk of job loss and turning to UI and other programs for short-term and maybe long-term financial support. As a result, states will experience budget changes depending on the existing set up of their programs, local labor forces, and reliance on the federal government workforce.
