The unemployment rate in North Carolina is at record lows, 4 percent or less in recent months. Unfortunately, experience should tell us these good times won’t last forever.
Officials could be using this respite to prepare for the downturn that will come sooner or later. Instead, the Republicans who control the legislature have been taking drastic measures that could leave the state in a bad way when a recession eventually hits.
A report from the nonprofit National Employment Law Project says North Carolina is one of eight states that have severely weakened their unemployment insurance programs.
When another recession hits, North Carolina is going to be ill prepared to help those workers who lose jobs.
People who qualify for jobless benefits, in most cases, are out of work because of economic factors, not because they were bad employees. It makes sense to help them until they can find another job. It’s good not only for the workers and their families, but also for their communities and the state.
People who suddenly find themselves out of work can fall into a downward spiral of debt that, in the long run, might require more government intervention.
Reasonable jobless benefits can help them hold things together until they find another job. That’s in everybody’s interests.
The Great Recession of 2008-11 took many North Carolinians to the brink of disaster. Preparation for the next one would be wise.
Instead, legislative Republicans have moved to seriously weaken the state’s unemployment insurance program. In 2013, they cut the maximum benefit from $535 to $350. They cut the maximum number of weeks for benefits from 26 to 12. That was down from as long as 99 weeks, with extensions, for some North Carolinians.
Because of these drastic cuts, North Carolina was the only state to forfeit up to $650 million in federal unemployment benefits.
The severe cuts were part of Republicans’ strategy for paying off the state’s $2.8 billion debt to the federal government for help with jobless benefits during the recession. They chose to make benefit recipients rather than employers bear most of the burden, arguing that if employers had to help more, they would hire fewer people.
The report says that to cut the number of people eligible for benefits states can do four things: increase how much someone must have earned to qualify; redefine who qualifies; cut the number of weeks; and make it tougher to continue to get benefits.
North Carolina has done all four. The legislature has made people wait longer before benefits can start. It requires people on unemployment to make five job-search contacts a week rather than two. They must register for work online.
North Carolina’s unemployment insurance program now combines some of the lowest benefits with the tightest restrictions in the country.
Republicans often argue that more generous benefits amount to welfare and discourage people from looking for work. Instead, they’ve made it so hard to get jobless benefits that many people don’t even bother to apply.
Democrats have introduced a bill to restore benefits to what they were before 2013, but it’s going nowhere.
When the next recession hits, Republicans’ shortsighted approach may find the state scrambling to avoid serious hardship for people who are suddenly out of work, and serious disruption for the state as a whole.