Beginning today, jobless workers in North Carolina can access fewer weeks of unemployment insurance despite a continued lack of jobs and the persistence of long-term unemployment. This is the direct result of a provision in HB4, the unemployment insurance overhaul bill that went into effect last July 1st.
The provision establishes a sliding scale for the maximum number of weeks that is tied to the unemployment rate. The lower the rate, the fewer weeks of unemployment insurance anyone can get. Such an approach to establishing the number of weeks available is only done by 2 other states—Florida and Georgia.
Jobless workers in North Carolina will only be able to access 14 weeks maximum of unemployment insurance beginning today, the lowest duration of weeks in the country. In the last year, the average weeks of duration was 17. And available data point to the continued persistence of long-term unemployment and the disturbing trend of missing workers, workers who would otherwise be in the labor market if job opportunities were stronger.
The reality is that the unemployment rate is not the best way to assess the quality of the labor market.
As a case in point, North Carolina experienced a rapid decline in its state unemployment rate from April 2013 to April 2014. The cause of this 1.9 percentage-point drop, however, was not the movement of unemployed person into jobs but rather the movement of jobless workers out of the labor force entirely. The state continues to face a significant deficit in jobs that means there are too few opportunities for those who want to work.
Meanwhile jobless workers and their families will be harmed by the inability to access unemployment insurance while they continue their job search. This will be particularly true in the regional labor markets where the unemployment rate remain far higher than the statewide average. Workers who are needing to transition into new industries and occupations and particularly older workers, too, are often going to need longer to find a job.
The limitation on the number of weeks will ripple through the economy as jobless workers cut back on spending, draw down savings and face challenges providing for their families.