Countdown to the Unemployment Cliff: North Carolina is Setting itself Apart

As we wrote yesterday, the implementation of HB4 – the radical restructuring of North Carolina’s unemployment insurance system – is just around the corner. Next Monday, on July 1st, North Carolina will set itself apart. Our state will have the dubious distinction of being the ONLY state in the nation to:

  • Reject participation in the 100% federally-funded emergency unemployment compensation (EUC) program. Due to the implementation date of July 1, North Carolina breaks a non-reduction rule prohibiting states from making benefit cuts while participating in the federal EUC program. As a result of the decision to implement changes in July 3013 instead of January 2014, 70,000 jobless workers in North Carolina will abruptly lose benefits next week. No other state has rejected federal participation in order to pursue benefit cuts.
  • Have a sliding scale for the minimum number of weeks available. Prior to HB4, North Carolina fell in line with the majority of states by providing 26 weeks of benefits – a length of time also recommended by two federal advisory bodies and the U.S. Department of Labor. HB4 includes a provision that establishes a sliding scale for the minimum and maximum duration of weeks based on the state unemployment rate. No other state has a sliding scale for the minimum number of weeks while only two states  – Florida and Georgia – have a sliding scale for the maximum number of weeks.
  • Calculate benefit amounts using a formula no other state uses. North Carolina’s current average weekly benefit amount is right in the middle of the pack compared to other states, with a state ranking of 25rd.  And the way benefit amounts are currently calculated is in line with the majority (29) of other states. North Carolina will become the first state in the nation to calculate benefits based on the “last two completed quarters.”  North Carolina’s new method of calculating benefits will likely result in lower benefits for many workers, especially those who have varied earnings due to irregular schedules, reduced hours, or seasonal fluctuations.
  • Cut the maximum benefit by as much as one-third. North Carolina’s current maximum benefit amount is indexed to the average weekly wage – this is how most states calculate the maximum. For middle class earners – those making approximately $37,000 per year or more – the cut to a flat maximum benefit amount of $350 will be close to one-third.  No other state has cut its maximum by this much. Moreover, the value of the maximum benefit, already a fraction of what it takes to makes ends meet in North Carolina, will likely to erode over time relative to cost of living increases and wage fluctuations.

The temporary wage replacement for workers who have lost their jobs through no fault of their own helps workers and their families meet their basic needs and stabilizes the economy. North Carolina currently has the 5th highest unemployment rate in the country. Is making the most severe cuts to unemployment insurance really how we want to distinguish ourselves?

8 Comments

  1. Frances Jenkins

    June 25, 2013 at 6:32 pm

    Check your facts on no other state has cut benefits. That is not correct and you are misleading people on purpose. Eight other states have cut benefits on the backend. Please do not be so dishonest.

  2. NoGOPinNC

    June 25, 2013 at 7:03 pm

    Frances no other state has seen fit to punish it’s citizens’ for their own failed policies…remember we still have one of the highest unemployment rates in the nation and it is going up as of August when even more teachers aides will lose their jobs. It would be nice if diehards like France’s and her buddy Doug could educate themselves on current issues…I breathlessly await your link to one of art pope’s propaganda sites to verify your misinfo.

  3. Frances Jenkins

    June 25, 2013 at 9:53 pm

    Sorry, the facts are not on your side.

  4. Frances Jenkins

    June 25, 2013 at 9:57 pm

    Review the debate in the Senate today. This issue was addressed. Eight state have already reduced benefits on the backend.

  5. NoGOPinNC

    June 26, 2013 at 1:17 pm

    And where are JOBS republicans promised would rush to NC? Still one of the highest unemployments in the nation going on 4 yrs of GOP leadership.

  6. Nicole F.

    June 27, 2013 at 11:10 am

    I have been desperately trying (unsuccessfully) to find a job. I have lowered my salary requirements by a substantial amount even though I may not be able to afford my mortgage or utilities. I pay in installments as it is. It really won’t make a difference anyway since I am going to lose everything under this new law. My extension just kicked in 2 weeks ago and now I will only receive benefits until the end of June! With the summer here, the college kids are all looking for work and internships as well. This decreases the possibility of many more people seeking to find employment.

    I am scared to death and I have nowhere to go and no one to turn to. My house will be foreclosed on. I am going to be homeless. I am not eligible for the work first program since my daughter has just turned 21. We cannot afford college grants due to my ineligibility based on my 2011 income. I cannot get Medicaid because I am not disabled or pregnant.

    “North Carolina ranks dead last among the states in the percentage of community college students with access to federal loans, according to a new report from the Washington-based Project on Student Debt.” Why did the state turn down help from the federal government? “North Carolina will lose roughly $600 million worth of extended jobless compensation paid entirely by the federal government”.

    I understand the NC legislature is claiming that the unemployment cut will “help small businesses from continued over-taxation”, but these same small businesses are the ones that had to lay us off in the first place. After 7 years with the same company and having excellent performance for years, earning my raises, these same companies hired people as replacements with a pittance of the salary we were making. Prior to being unemployed, I worked in human resources and can affirm that the amount of money unemployment taxes the businesses is not substantial. “Fewer than one in six of the state’s 175,000 private employers pay any state corporate income tax. In addition, a mere 217 corporations—representing less than one in 800 North Carolina private employers—would reap more than half the benefits of any corporate tax cut. Small business owners would see little benefit from the tax cut…” Additionally this country is continuing to give large companies tax breaks to outsource jobs.

    NOW North Carolina legislature is trying to pass a bill to help parents pay for private schools??? Now teachers will lose their jobs and public schools will lose their funding. “In addition, there is nothing to show that this credit would benefit many special-needs students. The odds are good that most of the students whose parents take advantage of this credit will be those with mild disabilities. There are few, if any, private schools that will take students with severe physical, developmental or intellectual disabilities—and the ones that do specialize in special-needs students cost much more than the $6000 credit. (For example, full-time tuition at the Mariposa School for Children with Autism in Cary costs more than $50,000 a year…This bill would leave public schools with a greater share of students with significant needs, but they would have less money to provide services, which are mandated by federal law.”

    What is going on in this state? I have paid unemployment taxes for the last 18 years. For what? The republican legislature in NC only care about the upper class and the elite. They managed to give themselves a raise….. This is absolutely shameful. And these people believe that they are good Christians?

  7. Doug

    June 27, 2013 at 11:19 am

    Three days…..

  8. Barbara

    June 27, 2013 at 3:41 pm

    I understand if the majority of the people that are unemployed are not going out even looking for a job but say that they are and have been recieving benefits for over a year or two but what about the rest of us that are out there trying to find a job,going on interviews. What are we suppose to do when I called Raleigh to clearly understand what this means and what are people suppose to do I was told to go to the nearest Job Link office and get involved but guess what Raleigh this process will not pay peoples bills or put food on peoples tables.
    I guess since the Governor does not have to worry about food or shelter he dont care. Instead of cutting the benefits for ones that are in the beginning of recieving benefits cut those that have not showed that they are really trying to find employment.
    This is a sad state when they will let people go without a place to live,food or health care, Yes we can go to the nearest health dept but guess what they charge to go there as well.
    We pay our dues over the years by paying taxed but what does the new Governor do nothing but hurt us in the long run.