More than 450,000 North Carolinians have filed for unemployment benefits since the COVID-19 pandemic began to devastate the state economy, lawmakers heard in a legislative committee meeting Tuesday.
Lawmakers are considering draft bills to expand access to unemployment insurance, to provide emergency assistance to workers and employers impacted by the coronavirus and waive interest for those filing taxes under an extended deadline.
Lockhart Taylor, assistant secretary for employment security for the state Department of Commerce, said the overwhelming number of jobless claims dwarfs those seen in the post-2008 recession. As of Tuesday morning, there had been 405,209 filings since mid-March.
“That averages to about 21,000 claims a day for the last three weeks,” Taylor told lawmakers in a legislative committee meeting Tuesday morning. “And over the last 24 hours we’ve taken just over 22,000 claims.”
The state had paid out about 110,000 claims equalling $28.6 million as of Tuesday, Taylor said. The department is struggling to keep up with the demand but is expanding the number of people trained to take claims and to help filers with technical problems, he said. Those filing for benefits who state COVID-19 is the reason for their unemployment should expect payment within about 14 days, he said.
The recently passed federal stimulus package will expand benefits to people who don’t qualify under the state unemployment insurance program or who have exhausted their benefits, Taylor said. But the state just received the rules for how that will work, he said, and has been scrambling to understand them. Taylor said he would like to begin approving people who can get benefits under the federal program within two weeks but he could not give a definitive date.
One of the more complex parts of the federal program is the sheer volume of paperwork required to verify that independent contractors and self-employed people making claims worked for legitimate businesses and are being honest about their salaries, Taylor said.
Lawmakers are scheduled to return to session in Raleigh on April 28. But they will likely call a special session before then, as business advocates and constituents have called for swift action.
“It’s our intent, as the chairs of the committee, that we have legislation that is ready to go,” said Rep. Jason Saine (R-Lincoln), co-chair of the working group. “Knowing, of course, that how we go back into session on April 28 — if not before — we’ll have to find ways to be successful at practicing social distancing and protecting ourselves and our staff.
“So if we can do as much work on the bills as possible prior to, so we can have that ready to go, that’s something we can all agree on. I think these are issues that certainly we can find consensus.”
Gregg Thompson, state director of the National Federation of Independent Business, told lawmakers a recent survey of small business owners found 92 percent have been financially harmed by COVID-19. Social distancing measures and stay-at-home orders have shut down businesses, like restaurants, retail stores and hair salons. Half will not survive two months under the current economic conditions, Thompson said. Another 15 percent will not last more than a month.
“Those are some sobering statistics and numbers we are dealing with, Thompson said.
Ray Starling, general counsel for the NC Chamber of Commerce, also gave a presentation that painted a stark picture for legislators. A U.S. Chamber of Commerce small business survey found one in four businesses has reported shutting down, Starling said. Another 30 percent have shortened operating hours and 17 percent have had to adjust employee hours or salaries.
The economic impact for businesses could be felt long after social distancing restrictions are lifted, Starling said, with uncertainty causing a lingering lack of consumer confidence and consumer spending. After a long period of easy access to credit, Starling said, private lenders are likely to be less interested in extending credit to businesses that are or have been unable to fully operate during the pandemic.
But with the help of lawmakers, Starling said, the business community is still optimistic about a post COVID-19 future.
“As a state we feel we’re in better shape than many,” Starling aid. “We have a very diverse economy with bright, caring people. If anybody is going to climb out of this quickly, it’s going to be North Carolina.”