The latest news in the labor market provides little reason to celebrate. It remains likely that the unemployment rate will remain in the double-digits as private sector expansions fail to compensate for losses in the public sector.
Unemployment insurance remains critical to the economy amidst this failing recovery. Previous analysis by the Budget and Tax Center found that unemployment insurance payments represented an important source of income not only for out-of-work North Carolinians but also for the state’s economy. In fact, unemployment insurance payments exceeded the income of workers in vital industries like furniture manufacturing, textile manufacturing, building construction and nursing and residential care facilities.
Pulling back on these payments while the country’s economic recovery remains fragile would be ill-advised. That is why the provision of the American Jobs Act that extends the current federal emergency unemployment insurance program is critical. Extending unemployment benefits is critical not only to those who have lost their jobs through no fault of their own, it also provides vital support to local economies and businesses because those who have been unable to find work after losing a job during the recession must spend almost every dollar just to make ends meet. Paying for it at the federal level also provides North Carolina with a reduced need to borrow to sustain the state’s unemployment insurance system in these difficult times.
In North Carolina, it is estimated that 90,400 workers would benefit from extending emergency unemployment benefits in the first six weeks of next year. And with the news that unemployment insurance effectively kept 3.2 million Americans out of poverty in 2010, continuing to invest these dollars will benefit us all with more broadly shared opportunity and a stronger recovery.