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Parade of Horribles: The Policies that will Destroy our UI System

This week, as the legislature begins to consider Unemployment Insurance (UI) reform, we’ll be writing about the proposed policies and the claims behind these policies under the heading “Parade of Horribles.”

1. Reducing the maximum benefit level

Yesterday’s $350 challenge in Raleigh called attention to the fact that the legislature’s UI reform proposal attempts to solve the business debt to the federal government by pushing most of it onto the backs of unemployed workers. $350 is the new proposed maximum weekly jobless benefit under consideration.

Here are some additional facts to consider:

– One-third of all North Carolina workers would qualify for the current maximum if they were to lose their jobs through no fault of their own.

– Cutting the maximum to $350 would affect workers earning approximately $37,000 or more.  Our infographic provides examples of affected professions.

– $350 falls $524 dollars short of the Living Income Standard. It takes $874 per week for a family of three in North Carolina to afford the actual costs of essential expenses like housing, food, healthcare and transportation.

– The current calculation of maximum benefit amounts (66.7 percent of the average weekly wage) is in line with 35 states whose maximum benefit is indexed to between 47.6 percent and 75 percent of the state’s average weekly wage. The proposed cut caps the maximum benefit regardless of wage growth, cost of living, or inflation.

– The proposed cut slashes maximum benefits by one-third. No other state has ever reduced its maximum benefit so severely.

– The maximum reduction alone will take $105 million out of the North Carolina economy.

 

4 Comments

  1. […] system that attempts to pay off the $2.5 billion debt owed to the federal program, but does so by mandating some of the deepest cuts to unemployment benefits anywhere in the country—effective July 1, 2013. Because the plan involves benefit cuts during the federal extension […]

  2. […] behind these policies under the heading “Parade of Horribles.” First up in the parade was a reduction in maximum benefits amounts. Following close behind […]

  3. […] Unemployment Insurance (UI) reform bill would  reduce the average weekly benefit amount, and the duration of […]

  4. […] On the second day of the legislative session, the House Finance Committee voted along party lines to advance a bill that will sharply curb the amount of unemployment benefits. […]