Uncategorized

Congress threatens North Carolina’s economic recovery

As the economic recovery continues its brutally slow pace, many workers continue to face long-term unemployment because of a severely depressed job market.  Nationally, there are more than 6 job seekers per opening.  Jobs that were once temporarily lost and could be expected to get back on-line with recovery are increasingly, permanently gone.  In North Carolina, as of April 2010, 3 out of 4 unemployed workers do not expect to be recalled to their job.

North Carolina has some of the longest jobless spells in the nation.  And workers in North Carolina are more likely to be unemployed for longer periods today than at anytime in the past 30 years.

Long-term unemployment is not only driven by the failure to create new jobs but, perpetuating a vicious cycle, it has the potential to undermine recovery by limiting consumption and creating household budget crises that can lead to foreclosures and other financial hardships with widespread social costs. This is particularly true if Congress fails to extend unemployment benefits until the end of the year and excludes COBRA subsidies that provide health insurance coverage to the unemployed.  The Congressional Budget Office found that for every $1 in unemployment aid to jobless workers circulating in the economy, $1.90 would be generated in GDP.  By far, unemployment insurance and aid to those without work provides the greatest boost to economic and employment growth of all available policy options.

The House is likely to vote today on a bill that, while extending unemployment benefits, will present significant challenges to workers and states.  Of particular concern is the removal of the COBRA subsidy and FMAP extensions. The removal of an extension to COBRA subsidies will raise the costs of care for workers and undermine their well-being.  In addition, the exclusion of the FMAP extension, already included in proposed N.C. budgets from the Governor and Senate, eliminates much-needed fiscal relief to states and threatens thousands more jobs.

The Senate must include the six-month FMAP extension when it takes up the House bill next week.  The Senate must also ensure that extensions to both unemployment insurance and COBRA subsidies are included to support workers seeking jobs in a depressed job market.  Absent such support for workers we cannot hope to see significant improvements in the future.

4 Comments


  1. AdamL

    May 28, 2010 at 2:59 pm

    I just got a call from someone a few hours ago who can’t pay COBRA without the subsidy. The COBRA subsidy and FMAP extension are absolutely critical.

  2. […] This post was mentioned on Twitter by . said: […]

  3. WILLIAM MURRAT

    May 30, 2010 at 8:37 pm

    If every $1.00 in unemployment funds generates $ 1.90 in GDP, then wouldn’t it make sense to put everyone out of work, and we would see the economy improve rapidly. What a ridiculous argument ! The state now owes 2.1 Billion to the feds for unemployment borrowing, and nationwide the figure is $36 Billion with no end in sight. At some point this has to come to an end.

  4. UCubed

    June 4, 2010 at 12:53 pm

    recovery? what recovery?

Check Also

Now is the time to rebalance the state’s unemployment insurance system

New research from The Century Foundation released today ...

Top Stories from NCPW

  • News
  • Commentary

The UNC Board of Governors is holding its last meeting of 2017 Friday, where the latest of its many [...]

Just south of Candler off the Pisgah Highway is a lovely piece of property on Little Piney Mountain [...]

Veteran North Carolina education policy expert Kris Nordstrom has authored a new and vitally importa [...]

When Joni Robbins, a section chief in the N.C. Department of Public Instruction, closes bidding next [...]

“All speech is free, but some speech is more free than others.” This seems to be the motto of the cu [...]

Trumpists prepare to raze another vital common good law It’s hard to keep up these days with the flo [...]

The post That’s how ‘Humbug’ is done appeared first on NC Policy Watch. [...]

The solid citizens of Johnston County, N.C. – in a fateful quirk of geography – for several years ha [...]

Featured | Special Projects

NC Budget 2017
The maze of the NC Budget is complex. Follow the stories to follow the money.
Read more


NC Redistricting 2017
New map, new districts, new lawmakers. Here’s what you need to know about gerrymandering in NC.
Read more