As lawmakers make no changes to state UI system in first COVID-19 package, unemployment claims continue to climb

RALEIGH (May 7, 2020) – The release of national weekly unemployment insurance (UI) claims data shows that initial claims have continued to climb even as researchers have pointed to the fact that UI claims data may not be capturing the full extent of job loss in the country.

Researchers at the Economic Policy Institute found that for every 10 workers who successfully applied for UI benefits, three to four workers couldn’t get through, and two others found it too difficult to try.

This past weekend, the North Carolina General Assembly passed its first COVID-19 package which included some funding for the Division of Employment Security but missed the opportunity to make much-needed improvements to the state’s Unemployment Insurance (UI) system.

“Not even the worst economic crisis in generations, with 1 million North Carolinians out of work, could move NC House negotiators to agree to a small, positive step to fix North Carolina’s broken UI program,” said Bill Rowe, General Counsel and Deputy Director of Advocacy at the NC Justice Center. “This past weekend House Conferees refused to accept the NC Senate’s provision in SB 704 (COVID-19 Recovery Act) that would have increased the maximum weekly UI benefit from $350 to $400 and changed temporarily the way the state calculates UI weekly benefits. This formula was adopted in 2013 for the sole purpose of reducing the assistance available to those out of work through no fault of their own. North Carolina is the ONLY state to use such a harsh formula in calculating UI benefits.”

North Carolina’s data on initial claims, released by the US Department of Labor today, is reported for the week of May 2nd, indicates that nearly 85,000 North Carolinians filed for claims. While somewhat lower than the previous week, this tally is still roughly 27 times higher than the average for the weeks preceding the COVID-19 outbreak.

Data from the Division of Employment Security released daily and available here show that North Carolina’s jobless claims have topped 1 million from March 16th-May 5th.

In these unprecedented times, the changes to UI that were rejected in the first package set up further challenges for the state’s long-term recovery which will depend on a strong state unemployment insurance system.

“We are deeply disappointed that, despite bipartisan support in the state senate, Republicans in the state house refused to accept even small changes in our Unemployment Insurance system that would help the record number of North Carolinians who are out of work during this pandemic,” said MaryBeMcMillan, President of the NC State AFL-CIO. “Our current eligibility formula is the harshest in the country and reduces the amount of assistance available to the jobless. Shame on House Republicans for turning their backs on workers at a time when they need help the most.”

For more information about the federal Unemployment Insurance changes in the CARES Act click here. For more background on Unemployment Insurance policy in North Carolina click here.