NC passes a grim anniversary for the state’s workers

Eight years ago this week, then Governor Pat McCrory signed a bill that overhauled our state’s unemployment insurance system. And so began our state’s fall to the bottom of the national pack when it comes to helping jobless workers and protecting our economy from the spiraling effects that downturns can have on the well-being of families and, in turn, businesses and local economies.

Click here to read a letter from an array of advocates that McCrory ignored at the time.

Today in the face of the economic shock wrought by a global pandemic, North Carolina’s jobless claims remain elevated and people are losing state unemployment insurance benefits at alarming rates and only scraping by for the time being with the help of federal programs.

Tragically, our state system is woefully inadequate to handle the challenge of this moment.

North Carolina is:

  • 45th for the lowest duration in unemployment insurance benefits at 9.6 weeks
  • 47th for the lowest average weekly benefit amount at $215 per week, or less than 23 cents per $1 in prior wages earned
  • 2nd for the share of jobless workers exhausting unemployment insurance benefits

Despite, however, our incredibly stingy benefits, the state’s UI tax rate is the fourth lowest in the country. Employers in North Carolina pay only $143 on average in UI taxes per worker.

The result: North Carolina is falling behind in the work to secure the fastest and most equitable recovery. Make no mistake, these rankings and these policy choices aren’t putting us in a more competitive position or reducing our long-term costs or helping business.

The system put in place in 2013 was designed and continues to be one that does not provide the support that unemployed workers and communities across the state need.

Our legislative leaders can choose to act now to fix the deficiencies in this system that both threaten the health and well-being of us all and continue to delay a full and just recovery.

They can move immediately to raise the duration of time that unemployed workers may collect benefits in the state program to 26 weeks and make sure that both average and maximum weekly benefit amounts are connected to prior wages earned, not arbitrary figures or tied to formulas that no other state uses.

They can recognize that the changing nature of work requires a short-time compensation program and recognize that our system needs updating in order to address the needs of a workforce that is rapidly evolving and in which part-time work plays a bigger and bigger role.

What better time than an anniversary—even a traumatic one—to recommit to the values (like broadly shared economic opportunity and  prosperity and community well-being) that we all share?

With such a commitment we can construct just and lasting recovery. Without it, North Carolina will remain mired near the bottom of he pack.

Alexandra Sirota is the director of the NC Budget & Tax Center.

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