Upcoming federal unemployment insurance cliff will be a blow to NC (video)

On September 6th, federal programs that have provided access to unemployment insurance (UI) to workers affected by COVID-19 who would not otherwise qualify for this wage replacement will end. Those who will lose assistance include independent contractors and the self-employed. To make matters worse, the additional federal supplement that helped to stabilize incomes during a time when people can’t get back to work due to the public health threat will also expire on September 6th 

Federal Unemployment Insurance provided an important stabilizing force to the state’s revenue picture and economic stability in the past year.  

As the Delta variant drives up case numbers and low vaccination rates threaten the trajectory of the economic recovery, the additional blow of losing federal UI income will be particularly costly to the health and well-being of the people of North Carolina.    

A new report from The Century Foundation estimates that more than 130,000 workers in North Carolina are likely to be receiving wage replacement through these federal programs on September 6th. And they will be harmed by this cliff.  

These jobless workers continue to face barriers in returning to work including too few jobs for those looking for work and too little support to remove child care, transportation, and job training barriers to secure new jobs.  

In North Carolina, the loss of the federal boost to UI would reduce the system’s wage replacement power of by 56%.  

What’s more, the state’s UI system is woefully inadequate to take on the work that federal programs are currently doing to support workers, businesses. and communities. The ongoing failure of state lawmakers to address the state’s current low levels of wage replacement and short duration of benefits, as well as the necessary modernization to ensure part-time workers and others currently excluded can access UI, makes federal action to extend these programs all the more critical.  

The following video explains the details of our state’s inadequate UI system.

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

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