NC Budget and Tax Center

Unemployment insurance fix is needed

The Election Day exit polling of North Carolina voters found many deeply concerned about the economy and the inability of people in communities across our state to secure a foothold in the middle class.  We shouldn’t be surprised by that.

The recovery from the Great Recession has been slow and failed to deliver the kind of broad wage growth that delivers the benefits of expansion to the most people.  Instead, North Carolinians have experienced wages below where they were in 2007. Meanwhile too few jobs are available in many communities across the state.

Gateway communities—those small towns and cities—that served as the hub of manufacturing and the connection to economic opportunity for rural places were particularly hard hit in the recession and recovery with the loss of jobs in manufacturing and its failure to recover.  But these communities have continued to be hit with mass layoffs and have seen state policies that used to help get radically altered.

Today legislators gathered to discuss the unemployment insurance system but this broader context was absent as were the stories of the harm of changes made since 2013.  The unemployment insurance changes made in 2013 provide just one example of policy choices that put working people at a disadvantage when they have lost a job and need a hand up the most. By failing to design the system to cover a significant share of those who have lost their job through no fault of their own and to provide payment that is relative to the wages earned through prior work, the system is not as effective at ensuring that jobless workers can meet basic needs and stay attached to the labor market thus reducing demand for businesses goods and services.

It is time to fix NC’s unemployment insurance system so that it provides meaningful support for laid off workers, their families and their communities as they work to get back on their feet.

NC Budget and Tax Center

North Carolina policymakers still propose making budget decisions using disastrously flawed formula

The Governor’s Office of State Budget & Management has told agencies to limit their requests for increases in budget items to just 2 percent above previous levels.

This reflects roughly the flawed formula of population plus inflation that has proven disastrous in places like Colorado. It results in artificially lower budget requests that don’t actually reflect the needs and opportunities that could strengthen N.C. families, communities and the economy.

The OSBM memo—in addition to requesting 2 percent budget reductions across all agencies—also limits requests for additional funding to 2 percent.

As has already been noted by NC Policy Watch, the Governor may not be willing to cut education by another 2 percent—a figure that could bring per pupil spending down to more than 10 percent below pre-recession levels when adjusted for inflation.  That in itself should raise concerns because even if the Governor and legislators try to make up those cuts in other budget areas like health care or environmental protection or community economic development, the cuts would still have an effect on our students. Research shows that where a child lives, how healthy they are and their environment is, matters to their educational success.

Such a limited view of what matters to North Carolina’s success and an unwillingness to pursue the best evidence of what works to build thriving communities is also fueling the 2 percent limit on proposed new investments. Such an arbitrary figure won’t allow North Carolina to make progress or pursue opportunities that set us apart and move us ahead as a state.  It will hold state investment below pre-recession levels despite seven years of an economic expansion. It will mean missed opportunities.

When you stop state agencies from requesting what is needed for communities and for North Carolina families, this is what will happen:.

  • More than 5,000 4-year olds will stay on the waiting list for pre-Kindergarten services;
  • Medicaid reimbursement rates will remain well below the national average;
  • North Carolina will fail to achieve peak levels of investment in the Housing Trust Fund even as Eastern NC and communities across the state face a housing crisis

These are just a few of the areas where North Carolina will see little to no progress for our communities under this arbitrary approach to the state budget. Another year of this approach makes it clear that our leaders aren’t thinking about our state’s future.

NC Budget and Tax Center

Deadlines approach on some federal assistance programs for those affected by Hurricane Matthew

While we continue to learn about the many ways that Hurricane Matthew has delivered destruction and hardship to our communities, we know that there will be the need for many months and even years of rebuilding.  The North Carolina Justice Center stands at the ready to promote the best policies to support an equitable and inclusive recovery that builds thriving and resilient communities.

Right now, there are deadlines approaching to apply for critical federal assistance that we want to make sure Pulse readers have and share with their families, friends and neighbors in Eastern North Carolina.

  1. Food assistance is available to residents who have NOT been receiving food assistance but who need help accessing food in the following counties: Beaufort, Bladen, Columbus, Cumberland, Dare, Duplin, Greene, Harnett, Hoke, Hyde, Johnston, Jones, Lenoir, Pender, Robeson, Sampson, Tyrrell, and Wayne. More information can be found here.  The deadline is Wednesday, October 26th.
  2. Disaster unemployment insurance is available for residents in the following counties: Beaufort County, Bertie County, Bladen County, Columbus County, Cumberland County, Dare County, Edgecombe County, Greene County, Harnett County, Hoke County, Hyde County, Johnston County, Jones County, Lenoir County, Nash County, Pitt County, Robeson County, Sampson County, Wayne County, and Wilson County. Individuals affected by the disaster and are unable to continue working can apply for disaster unemployment insurance.  Be sure to apply by November 14, 2016.  You can call 1-866-795-8877  and visit: https://desncc.com/DES/ to apply online.
  3. General disaster assistance for housing, home repairs and other damage is available. Individuals—homeowners and renters— and business owners who sustained losses in the designated area can begin applying for assistance tomorrow by registering online at DisasterAssistance.gov or by calling 1-800-621-FEMA (3362).  It is recommended that you should apply even if you have insurance. Disaster assistance applicants, who have a speech disability or hearing loss and use TTY, should call 1-800-462-7585 directly; for those who use 711 or Video Relay Service (VRS), call 1-800-621-3362. The toll-free telephone numbers will operate from 7 a.m. to 10 p.m. (local time) seven days a week until further notice.

For more information regarding local services and resources, you can also dial 211 or visit www.nc211.org.

 

NC Budget and Tax Center

Jobless workers and their communities still hurting under unemployment insurance changes

The Unemployment Insurance Oversight Committee is set to meet on Wednesday to discuss the state’s unemployment insurance system.  It is unclear what will be discussed as of today but let’s hope North Carolina’s leaders spend time considering just how poorly the system is working for jobless workers and their communities.

The latest available data from the US Department of Labor provides benchmarks on key standards that the system should meet in providing a temporary, partial wage replacement to those who lose their job through no fault of their own.  The goal of the program is to stabilize these jobless workers spending in the broader economy while they look for new work and ensure that busiensses aren’t hit by the impacts of low demand for their goods and services.

Here are the lowlights for North Carolina’s system:

  • Just one in 10 jobless workers received unemployment insurance in the Second Quarter of 2016, ranking North Carolina last in the country. Prior to changes North Carolina ranked 24th.
  • The average duration of unemployment insurance is just 10 weeks, ranking North Carolina last in the country. Prior to changes North Carolina ranked 31st.
  • The average weekly benefit amount of $241 leaves jobless workers with too little wage replacement to keep up with the basic costs of living and ranks North Carolina 46th in the country. Prior to changes North Carolina ranked 25th.

North Carolina’s unemployment insurance now reaches too few jobless workers for too short a time period and provides too little in payments to stabilize their spending in the economy. In communities facing persistently high joblessness and too few job openings as well as though facing mass layoffs. The failings of today’s unemployment insurance are all too real and the reach of its harm extend beyond those immediately affected to all of us.

Let’s hope these issues get discussed by leaders on Wednesday. Policymakers should choose to fix the state’s unemployment insurance so that it works for jobless workers and communities.

NC Budget and Tax Center

New research points to critical role of unemployment insurance in lessening hardship from job loss

JP Morgan Chase has a study out that shows the powerful role of unemployment insurance based on a review of a unique dataset:  their customers’ financial behavior.  The findings are particularly telling for North Carolina where policymakers have moved in the opposite direction of modernizing the system, dismantling many of the best practices the state had in place when they overhauled unemployment insurance in 2013 (and many that the JP Morgan Chase study highlight as important).

As we have written about in many other spaces, the result of such changes in North Carolina has been an unemployment insurance system that is providing too little support for too few weeks to too few of the state’s jobless workers.

The JP Morgan Chase study is important to providing further evidence that job loss without unemployment insurance takes a greater toll on consumer spending—the key to America’s economic engine.  Here are key findings:

  • Unemployment insurance softens the drop in family income from job loss to just a 16 percent drop compared to a 46 percent drop in monthly income without unemployment insurance.
  • The higher wage replacement that a state provides through unemployment insurance the lower the drop in spending. Unemployment insurance payments reduce the spending drop associated with job loss by 74 percent.

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