Worker advocates call on lawmakers to restore jobless benefits

Published April 8, 2016

by Laura Leslie, WRAL, April 7, 2016.

Advocates for workers on Thursday called on state lawmakers to reverse the cuts to unemployment benefits they approved three years ago.

In 2013, when state businesses owed the federal government $2.5 billion for jobless benefits paid during the recession, lawmakers overhauled the unemployment insurance system to pay back the debt more quickly. The burden fell mostly on people who had lost jobs, leaving North Carolina among the worst states nationwide for helping laid-off workers.

When Anna Jensen was laid off in Durham in 2014, she said she thought unemployment would cover her basic needs until she found a new job. She was shocked by how little she actually got, noting that, if it weren't for her parents' help, she wouldn't even have been able to pay her rent.

"What about people who don't have parents they can call for help?" Jensen said Thursday. "What about people whose jobs help them support their parents, or what about people that have kids themselves? What happens to them in the system?"

Before the overhaul, North Carolina's unemployment benefits were close to the national average. Now, they're near the bottom of the list.

A laid-off worker could get up to 26 weeks of help in 2012, for example. Now, it's just 13 weeks – only Florida provides fewer weeks of benefits.

The checks are smaller now, too. The average weekly benefit has dropped from $298 in 2012 to $235, which is about a quarter of the average state salary.

It's also harder to qualify for unemployment. Before the reforms, four out of 10 laid-off workers got assistance; now, only about one in 10 qualifies.

George Wentworth, a national unemployment expert, said 13 weeks of assistance isn't enough for those in rural areas with high jobless rates or for workers who need to be retrained.

"Of the people that are in the unemployment insurance system right now, 50 percent of them are coming out the back end after week 13 without having found a comparable job," Wentworth said.

He also criticized a requirement that workers accept any job that pays 120 percent of their weekly benefit amount after 10 weeks on unemployment.

"That’s a wrong policy choice, flat and simple," he said. "The state’s economy is going to benefit when workers can get back on the ladder somewhere close to the rung they fell off. When workers with master's degrees have to take part-time jobs at Starbucks, this is not what you want to grow your economy and your revenue."

Bill Rowe, general counsel and director of advocacy for the North Carolina Justice Center, said unemployment insurance is supposed to ensure that people don't slide into poverty or homelessness when they're laid off through no fault of their own. Jobless checks also stabilize local economies when big employers shut down, but Rowe said North Carolina's current system is capable of neither helping workers nor their communities.

"We've got people getting laid off these days – Freightliner, 1,000 workers, Miller Breweries is laying off hundreds of workers – and they're going into a system that may not be able to support them or their communities," he said.

The debt to the federal government was repaid last August, and the state unemployment insurance reserve fund now is about $1.2 billion.

Rowe and others say lawmakers should now consider reversing some of the cuts, but the McCrory administration wants to build the reserve to about $2.4 billion to weather future downturns in the state economy.

Ted Brinn, who heads the Division of Employment Security in the state Department of Commerce, said his agency's main focus is helping people find new jobs more quickly. He declined to comment on whether existing benefits are adequate.

"The best possible outcome for everybody, of course, is that, if you want a job in North Carolina, you can get a job in North Carolina. Then the unemployment system doesn't have to be the system that it is," Brinn said.