MEDIA RELEASE: North Carolina’s unemployment insurance system offers too little for too few workers for too short a period

Changes made in 2013 resulted in an ineffective system for workers and communities, experts say

RALEIGH (April 7, 2016) — Changes made to North Carolina’s unemployment system in 2013 resulted in benefits that are ineffective in serving jobless workers and their communities, said advocates and affected workers at a press event this morning.

“House Bill 4 has left North Carolina’s workers with far less financial protection from the consequences of joblessness than workers in most of the rest of the country,” said George Wentworth of the National Employment Law Center. “The data shows that for the year, only one in eight jobless workers in North Carolina receives unemployment insurance and it’s worse in the most recent quarter where only one in 10 received benefits. If they do qualify, they receive some of the lowest benefits in the nation and for only half as many weeks as workers who lose their jobs in most other states.”

Nearly one in three jobless workers in North Carolina today have been out of work for 26 weeks or more, yet the maximum duration of unemployment insurance is just 13 weeks. And on average, jobless workers receive $250 less per month in unemployment insurance than they did in 2013, forcing them to make difficult choices between everyday essentials during the job search.

“Simply put, too few jobless workers in North Carolina receive too little in unemployment insurance to sustain their families and support the economy for too short a period, particularly given the lack of jobs,” said Bill Rowe, Director of Advocacy at the NC Justice Center. “It is critical that policymakers engage with the data on how North Carolina’s unemployment insurance system has underperformed since 2013.”

At the same time unemployment insurance is doing less to stabilize the temporarily unemployed and the communities where they live, it also has failed to establish prudent solvency thresholds for the UI trust fund that would help avoid having to borrow money from the federal government in the next economic downturn.

“The biggest factor in the restoration of the state’s trust fund, particularly since 2013, has been the benefit reductions caused by House Bill 4,” said Wayne Vroman, a senior fellow in the Center on Labor, Human Services, and Population at the Urban Institute. “These reductions will continue to operate in all future years and will cripple the program’s performance as a stabilizer of the state’s economy. The scale of the damage will be especially apparent during the next economic downturn when the need for UI benefits is greatest.”

House Bill 4 also put North Carolina among limited company when it comes to adequately providing unemployed workers with assistance.

“No state has ever inflicted such extensive damage to its unemployment insurance program in such a short time as North Carolina did with House Bill 4,” Wentworth said. “In less than three years, North Carolina’s program has gone from the middle of the pack to at or near the bottom of national rankings for most recognized measure of program effectiveness.”

Anna Jensen was laid off from her job during the summer of 2014, and shared her experience dealing with the state’s unemployment system. She still hasn’t found a permanent full-time job after two years.

“The lack of adequate support available from the state’s unemployment system hampered my search for permanent, full-time employment,” Jensen said. “Because the benefits were so low and the duration of benefits was so short, I felt pressured to take the first jobs offered to me instead of pursuing a serious search for a job comparable to the one I had before.”

“My story is just one of thousands from across the state, and my experience was just the tip of the iceberg in terms of how these changes are harming people,” Jensen said.

FOR MORE INFORMATION, CONTACT: George Wentworth, gwentworth@nelp.org, 860.882.4599; Wayne Vroman, wvroman@urban.org; Bill Rowe, bill@ncjustice.org, 919.856.2177; Julia Hawes, julia@ncjustice.org, 919.863.2406.