Under McCrory, Life More Difficult for Unemployed in NC

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The North Carolina General Assembly radically cut unemployment insurance benefits in 2013 in hopes that little assistance would get workers to return to work faster. Not only did this plan backfire completely, but now NC ranks among the lowest in the country for unemployment benefits. 

Read the full editorial from The News & Observer here:

Before the changes went into effect, North Carolina was about average when it came to most measures of unemployment. The state had 39 percent of unemployed workers receiving unemployment insurance in the second quarter of 2013 (which ranked us 24th nationally), the average weekly benefit was $301.06 (25th nationally) and average benefit duration was 15.9 weeks (31st nationally).

Now three years on, we don’t have to guess at the results of this great experiment. If it had worked, we would have seen the share of people with jobs increase after cuts went into effect. Instead, we saw exactly the opposite. The share of employed North Carolinians actually fell well below the national average when we started out above the average. In fact, North Carolina’s prime-age employment-to-population ratio fell nearly 3 percentage points below the national average after the cuts.

This leaves vulnerable North Carolina workers in a very precarious position. In the latest data available from the third quarter of 2015, just 11 percent of the state’s unemployed receive unemployment insurance, dead last in the country. Our average duration for collecting benefits, 11.5 weeks, is also the lowest in the country. The state’s average weekly benefit was $233.69 (now 46th nationally) and the average weekly benefit as a percent of average weekly wage was 27 percent (now 44th nationally).

This is all to say that the drastic and draconian unemployment insurance cuts North Carolina made in 2013 were a complete failure. The share of people with jobs in North Carolina did not grow nearly as quickly as it did in states that did not make these cuts, and there was no discernible increase in the share of the population with a job. Instead, tens of thousands of job seekers were forced into part-time jobs, forced into underemployment or fell out of the job market completely. In all cases, these people would not show up in the official unemployment numbers but are certainly still unemployed by any sensible measure.

 

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