Social Security is a key part of the financial security of millions of older Americans. Nearly 70 million Americans received retirement and disability benefits through the program last year, keeping more than 22 million adults and children out of poverty.
These benefits are funded by taxes paid by workers and their employers that are then invested in a trust fund. But according to the Social Security Trustees’ 2025 report (PDF), that trust fund will be depleted in 2034, which could reduce benefits by 25.8 percent in that year alone.
In previous work, I found that Social Security benefits accounted for between roughly 0.5 percent to 2.0 percent of total personal income across counties—money that beneficiaries use for housing, food, transportation, and other everyday expenses. Counties in Arkansas, Michigan, North Carolina, and Texas had some of the highest ratios of Social Security retirement benefits to total income, indicating relatively large shares of older Americans living in these counties receive Social Security benefits.
To further understand how benefit cuts could affect local economies, I translate the projected loss of Social Security benefits into equivalent changes in local unemployment rates, based on a county’s average income. I find that income losses from Social Security benefit reductions would be the equivalent of the unemployment rate increasing by up to 7.7 percentage points in some counties and up to 2.4 percentage points in some congressional districts.
How would a 25.8 percent cut in Social Security benefits affect counties across the US?
To translate lost benefits into equivalent job loss, I first reduce total Social Security retirement benefits by 25.8 percent to reflect the benefit cut at trust fund exhaustion. (It’s worth noting that rather than instituting an across-the-board benefit cut, the Social Security Administration could take other actions to balance revenues and benefits, such as delaying payments.)
Next, I divide that amount by average income in each county based on 2023 Census Bureau data. The result estimates the number of average-income jobs lost equivalent to the total value of benefit cuts. (For the purposes of this analysis, I assume lost income isn't replaced by unemployment insurance or other public benefits). Finally, I calculate each county’s hypothetical unemployment rate using September 2025 employment data from the Bureau of Labor Statistics.
Based on this analysis, I estimate that the loss of income resulting from a 25.8 percent Social Security benefit reduction would be the equivalent of an average increase in the unemployment rate of about 1.8 percentage points, ranging from a change of less than 0.5 percentage points in some counties up to more than 5 percentage points in others.
In 35 out of more than 3,100 counties, the equivalent unemployment rate increase is at least 4 percentage points, including 4 counties in Florida and 3 counties each in Arkansas, Georgia, Michigan, and West Virginia. In the nation’s most populous counties—like Los Angeles, California; Cook County, Illinois; and Harris County, Texas—estimated equivalent increases in the unemployment rate are smaller, about 0.8 percentage points.
Take for example Garvin County, Oklahoma, which is located slightly south of Oklahoma City and home to about 26,000 people, roughly the median population of US counties. There, residents received nearly $10 million in total Social Security retirement benefits in 2023, consistent with the median value for the nation. If Social Security benefits were cut by 25.8 percent, then the total dollars flowing to county residents would fall by about $2.5 million.
That loss of benefits is equivalent to 238 county residents making the county’s average income (about $30,000) losing their jobs. Put differently, cutting Social Security benefits by 25.8 percent would be equivalent to the county’s unemployment rate rising from 3.9 percent (its current level) to 6.0 percent.
Though these calculations estimate the potential size of effects from trust fund exhaustion, they don’t capture national economic outcomes. They also don’t reflect how beneficiaries might respond to benefits cuts (such as changing their work behavior, moving to other parts of the country, or changing their job), or how the government could respond (such as adjusting other programs, like unemployment insurance).
Exploring equivalent job loss by congressional district
To further analyze how benefit cuts could affect local economies, I recalculated equivalent unemployment rates by congressional district (CD).
Across districts, current unemployment rates range from about 2 percent to around 8 percent, with an average rate of 4.3 percent. As such, a 25.8 percent reduction in Social Security benefits would be equivalent to the average CD-level unemployment rate rising to 5.4 percent.
Four CDs in central and southern California (CA-20, CA-21, CA-22, and CA-25) had about 30,000 people each who were unemployed and unemployment rates of at least 8 percent in September 2025, the highest in the country. In each of these districts, Social Security benefit cuts would be roughly equivalent to an increase of about 4,000 unemployed workers and a 1.1 percentage point increase in the unemployment rate.
The largest equivalent changes in estimated unemployment rates—more than 2 percentage points—appear in 11 congressional districts located in southern and western states: Arizona (AZ-02), Arkansas (AR-04), Florida (FL-06, FL-12, FL-17), Kentucky (KY-05), Michigan (MI-01), Mississippi (MS-02), North Carolina (NC-01), South Carolina (SC-07), and West Virginia (WV-01).
About a dozen CDs would see nominal changes—no more than 0.5 percentage points. These CDs are spread across the country in states like California, Texas, New York, and Washington.
Addressing Social Security finances is vital for communities nationwide
If the Social Security trust fund is depleted, retirees and their dependents could lose about 25 percent of the benefits they are entitled to in 2034 and face even larger cuts in the future. This could increase the number of Social Security beneficiaries who live in poverty by more than 50 percent.
To prevent benefit cuts and ensure beneficiaries have the supports they are entitled to, Congress can do the following:
- strategically change retirement ages
- broaden the tax base by taxing capital and currently exempt income
- eliminate the cap on taxable earnings
- increase payroll tax rates
- adjust any benefit reduction to target only higher-income beneficiaries
- pursue some combination of these or other measures
By making changes to the program, Congress can help balance the system for decades to come. Waiting to implement any type of policy change will likely increase the size of the reform needed to ensure the system can pay promised benefits in the long term. Waiting only makes the changes larger and more difficult.
Let’s help communities build more secure, hopeful futures.
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