Conservative think tank critical of N.C. cutting off benefits to long-term unemployed

A blog post at the American Enterprise Institute, a DC-based conservative think tank, took a look at North Carolina’s decision to curtail unemployment insurance this year and found that it hasn’t worked all that well.

From James Pethokoukis’ blog post:

Earlier this year, as The New York Times reported, the North Carolina legislature cut unemployment benefits, reducing (a) the maximum payout by a third and (b) the number of weeks residents can receive jobless aid. As a result, starting in July the state lost its eligibility for the federal Emergency Unemployment Compensation program. (This is the extended benefits program scheduled to expire nationally at year end.)

So how’s that worked out in the Tar Heel State?

Well, if you listen to Republicans, it’s worked out pretty well. The state’s unemployment rate has dropped to 8.0% in October from 8.8% in June. So clearly cutting jobless benefits creates jobs and gets residents back in the workforce, right?

When you dig a bit deeper, things look less bright.

In other words, it looks like the cut in unemployment benefits moved people out of the labor force rather than into employment. Likewise, the state employment rate — the share of adults with jobs — declined from 56.7% in June to 56.5% in October. Did reducing the number of North Carolina residents eligible for federal extended unemployment benefits boost employment? These data suggest it did not, a reality Washington policymakers might want to consider.

To read the entire post, complete with lots of numbers provided by Pethokoukis, click here.


  1. Tim Peck

    December 19, 2013 at 4:10 pm

    UI Reform: Behind the media spin
    What North Carolina Teaches us about Unemployment Benefits and Confirmation Bias

    Partisans on both sides of the aisle have already declared the North Carolina experiment to be a huge success or total failure which, of course, confirms their preexisting economic ideologies, and they’ve done so even though the experiment has obvious limitations that would keep any serious policy wonk from drawing broad and definitive conclusions: state markets can differ greatly from each other and from the national market; it’s difficult – if not impossible – to isolate the impact of a single policy change on something as diverse and dynamic as a multi-million person labor market; and we only have a few months of post-July employment data to examine (federal employment data are only through October). But while the NC experiment really isn’t an ideal predictor of the 2014 US labor market (at least not yet), it has already proven useful in one regard: shining a bright light on certain policy commentators’ own economic blind spots and the powerful siren song of confirmation bias.


  2. LayintheSmakDown

    December 19, 2013 at 6:07 pm

    good comment Tim. These policies have barely begun to take effect, and each change does not exist in a bubble. It is likely the Obama economy is in store for a big downturn in late 2014 so this will be a moot point by then as the economic headwinds will be bad anyway.

  3. Alan

    December 19, 2013 at 7:06 pm

    LSD, as optimistic as ever…

  4. Frances Jenkins

    December 19, 2013 at 9:42 pm

    Sarah is more involved every day in dishonest reporting. Such a shame.

  5. Gene Hoglan

    December 19, 2013 at 9:47 pm

    It’s kinda cute when the sockpuppets converse with each other.

  6. Alan

    December 20, 2013 at 8:14 am


    Way to go, one full sentence, and you yet again, attack the author. Please enlighten us, which part of this was “dishonest”, the article quotes a blog at the Emrican Enterprise Institute???

  7. LayintheSmakDown

    December 20, 2013 at 8:58 am

    Well, not dishonest reporting. But that is typically what is expected from Sarah..selective honesty at best.

  8. ML

    December 20, 2013 at 10:34 am

    These policies are part of the same iteration as Reagan/bush. I don’t need to wait I know their effect. Have you seen Detroit?

  9. Steve Harrison

    December 20, 2013 at 1:20 pm

    Tim, this “experiment” to which you refer isn’t happening in a laboratory environment, it’s happening in the homes of 170,000 of your fellow North Carolinians. You and your idols can try to distance yourselves from all that unnecessary suffering all you want, but you will carry this scarlet H (Hunger) around your necks right up to November 2014.

  10. Blackyce

    December 20, 2013 at 3:26 pm

    The program ends nationally in a few days. After that it’s not likely that the program will be extended nationally, but the Democrats latest proposed extension includes an amendment which returns NC to the program. So this “experiment” will likely be in effect for a grand total of five months, either way.

  11. LayintheSmakDown

    December 20, 2013 at 3:55 pm

    Detroit is mostly caused by unions….actually the flight of manufacturing from union controlled states to more affordable right to work and overseas plants is primarily due to rich union perks, and executive ineptness in the case of the automakers.

  12. LayintheSmakDown

    December 20, 2013 at 3:56 pm

    I also forgot to add the good news. Once again UE is going down. UEI will be a moot point in the near future assuming the Obama economy can keep from crashing.


  13. Skeptic

    December 20, 2013 at 4:18 pm

    How much do you want to bet Frances is actually Francis DeLuca? Show yourself!!!!!!!!!!!!!!!!!!!!!!!!!

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