NELP Applauds North Carolina Campaign to Restore Unemployment Insurance

Raleigh, NC—Three years after the McCrory administration and the legislature pushed through legislation that decimated North Carolina’s unemployment insurance program, today the North Carolina Justice Center launched a campaign to restore some of those crucial benefits to North Carolinians facing job loss. 

The following is a statement from George Wentworth, senior counsel with the National Employment Law Project:

“We applaud the North Carolina Justice Center for its work to shed light on some of the worst excesses of HB4, the 2013 legislation that effectively gutted North Carolina’s unemployment insurance system and turned it into one of the most dysfunctional unemployment programs in the entire nation.

“Unemployment insurance is supposed to provide workers who lose their jobs with partial wage replacement that will help them afford the basic necessities of living, such as food, housing, and transportation; and allow them a reasonable period of time to find a new job that’s comparable to the one they lost. And more broadly, unemployment insurance is meant to help minimize disruption in local economies. But HB4 so severely damaged the state’s unemployment program that it can no longer meet these goals.

“For starters, HB4 instituted the deepest cut in maximum benefit amount in the nation’s history, reducing the maximum benefit amount from $535 to $350 per week. It also substantially reduced the average benefit amount workers received: in 2012, prior to HB4, the average weekly benefit amount was $298; today, the average benefit is $235.

“Indeed, by nearly every measure of program effectiveness, North Carolina’s unemployment insurance program today ranks at or near the bottom nationally.

“North Carolina offers the second-fewest weeks of unemployment benefits in the entire nation. Before HB4, eligible unemployed workers could receive up to 26 weeks of benefits; today, the state provides a maximum of 13 weeks—second-lowest in the nation (Florida’s maximum is 12 weeks). By contrast, the overwhelming majority of states (42) provide a maximum of 26 weeks.

“North Carolina has the second-lowest recipiency rate in the nation: only 1 in 8 unemployed North Carolinians are receiving unemployment insurance. In 2012, 24 percent of unemployed North Carolina workers were receiving state UI benefits; since HB4, that rate has plummeted to 12 percent—again, second-lowest, behind Florida (11 percent).

“North Carolina ranks last in the nation in terms of paying out unemployment benefits in a timely manner. To be effective and actually help mitigate the economic impact of job loss, these benefits must be paid timely. But even as the state’s unemployment program shrinks, its delivery of benefits slows.

“Business interests were served by HB4, but at the expense of a program intended to benefit workers and help the economy weather the storms of recession. Especially troubling is the fact that the state’s unemployment program will be ineffective in the next downturn. A shrunken state program with fewer weeks will mean less federal help when the next inevitable recession occurs, and more suffering for the long-term unemployed.

“The North Carolina Justice Center’s effort to restore balance to the state’s unemployment insurance program is vitally important. Before even more tax cuts go into effect, North Carolina’s legislature and governor need to consider the damage wrought by HB4 and commit to repairing and strengthening the program—for the sake of the future economic security of the state and its working families.”

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