NC unemployment benefits have plummeted 71%; immediate action is needed

More than 500,000 unemployed North Carolina workers and their families have lost badly-needed emergency income because President Trump and the U.S. Senate majority refused to extend the extra $600 in weekly unemployment payments that ended the week of July 25.

In March, Congress enacted the $600 supplement, known as Pandemic Unemployment Compensation (PUC), to help people who lost their jobs through no fault of their own. With COVID-19 still not under control in many parts of the country, this is no time to pull the rug out from under the millions of jobless workers who still cannot safely go back to work or who have no job to go back to.

The bottom-line is that the public health crisis must be contained for a robust recovery to begin. In the meantime, supporting those who have lost jobs is the first step to building a pathway for us all to rebuild and recover from the economic downturn. While workers across industries have been impacted by the pandemic and its economic ripple effects, it has been part-time workers, workers in service and caring sectors, and workers of color and women who have borne the brunt of losses.

It should be clear to policymakers that it is no longer an option to allow any worker – and especially those already excluded in good times from good pay, paid sick days, health care, and stable work – to be excluded from a system meant to sustain workers during the worst of times.

Unemployment insurance can keep families and the economy afloat but its federal-state connection has left too many workers—mostly those working in southern states—with too little wage replacement when jobs go away through no fault of their own. When Senate Republicans left Washington without reauthorizing the PUC relief package – already approved by the House of Representatives early in July – and allowed the program to expire, they doomed North Carolina workers to a system wholly inadequate to the task of sustaining the labor market and our collective recovery. What’s more, the partial, temporary and all-around convoluted replacement plan hastily concocted by the Trump administration is not a viable substitute.

Restarting our economy requires restarting federal and state level efforts on both sides of the aisle to fix our unemployment insurance system so that it aids jobless workers in these unprecedented times. Simply put, a policymaker can’t be “pro-economy” if they’re not “pro-worker” during a moment like the present. After all, workers are the economy—the people who produce goods and deliver services, who pay bills and buy at businesses, and who innovate and design new ways of doing jobs. When they are struggling so too will their employers, local businesses and the broader prospects for sustained growth.

For too long policymakers have tried to advance a vision that the economy can work well without a focus on the well-being of workers.  The result has been laid bare with COVID-19—workers living paycheck to paycheck, in hazardous working conditions without protections and unable to stay connected to the labor market after a job loss.

The undervaluing of work and workers led North Carolina policymakers to rashly re-design our state unemployment program to be one of the worst in the country in providing support to jobless workers and their families. In turn, North Carolina has been hit particularly hard by the loss of the federal boost—workers here have seen their weekly income fall by 71 percent. North Carolina workers, on average, receive the equivalent of only $6.76 an hour in income through the state system, making it impossible to keep up with bills, inevitably pushing more people into deeper hardship.

Slashing federal unemployment insurance has struck a major blow to our state’s economy. Now more than ever, the economy is dependent on the continued spending by the state’s workers, families, and communities. As economists have cautioned, many workers will be increasingly unable to pay their bills and make other purchases without the $600 federal PUC boost, the loss of which is resulting in an estimated $290 million in lost income each week in North Carolina. Economists project that the loss of one month of Unemployment Insurance could reduce growth by the same levels experienced during the Great Recession.

President Trump and Senators Burr and Tillis should listen to their constituents and acknowledge that there is strong public support for the nation’s unemployed families, with 75 percent of registered voters—including 67 percent of Republicans—supporting either maintaining or increasing unemployment aid. Our state legislature, which returns next week, should prioritize state level fixes that would ensure our own system is designed to reach all workers for the duration of this downturn by focusing particularly on the need to include part-time workers, recognize the wage losses that often happen before a job loss and ensure we provide adequate wage replacement based on work histories and adopt work-sharing as employers seek to work with their employees.

Our policymakers must do what is right for the economy and start with fixing our Unemployment Insurance for workers across our state and country.

Alexandra Sirota is the Director of the N.C. Budget & Tax Center.

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