RALEIGH (March 18, 2021) – As North Carolina passes the one-year anniversary of the first cases of COVID-19 in the state and the subsequent historic spike in unemployed workers, state lawmakers introduced new legislation yesterday that would help correct the single greatest challenge to aligning our Unemployment Insurance (UI) program to the current moment: North Carolina provides too little in wage replacement to too few jobless people for too short a duration.
Senate Bill 320 / House Bill 331 aims to reform the state UI system by increasing the amount of weekly benefits and the duration of benefits for jobless workers. The bill would increase the maximum duration for receiving benefits from 12 to 26 weeks, like most states, as well as the maximum weekly benefit to 50 percent of the state’s average weekly insured wage to a maximum of $500, with an increase as wages go up.
“All economists agree that the one thing you can do to avoid a recession and help your economy when times are tough is to have good unemployment insurance benefits,” said Senator Wiley Nickel, who co-sponsored the NC Senate bill with Senators Paul Lowe and Mike Woodard, at yesterday’s press event. “Most states are in a deficit but we have the money to throw jobless workers a lifeline. The bottom line is that we have to fix our broken unemployment system.”
The NC House introduced a companion bill, co-sponsored by Representatives James D. Gailliard, Wesley Harris, and Vernetta Alston. Gailliard emphasized the importance of establishing short-term compensation through unemployment benefits, saying the new bill’s recommendations for work-sharing and short-time compensation would enable employers to reduce hours for their workers without making them ineligible for benefits.
“This is also a lifeline for small businesses,” Rep. Gailliard said. “We champion and we say we care about small businesses… but one of the biggest ways we can support [them] is not to make it difficult for them to retain their employees when they’re going through times of hardship.”
In 2013, North Carolina lawmakers passed House Bill 4 to support the state’s UI Trust Fund, which is funded by taxes on employers and pays unemployment benefits to laid-off workers. The bill achieved solvency by permanently cutting the amount, duration, and eligibility for benefits for all unemployed workers, the most severe cuts ever enacted by any state during UI’s 80-year history. At the time, legislators claimed that when the Trust Fund was solvent, these draconian cuts would be revisited.
“Our unemployment trust fund sits at $2.6 billion right now; for reference, in 2008 before the Great Recession, it was at $544 million,” said Rep. Harris. “We are so very close to getting through this pandemic and we have to make sure people have the resources to make it through.”
Liz Labunski lives in Charlotte and lost her job of more than a decade in February 2020, right before the pandemic reached the state. She has applied to over 500 jobs in 365 days. Labunski and her family have kept expenses at a minimum to survive, often deferring payments to keep up, but she now finds herself at 60 years old level set with college students just starting out.
“It’s not a system set up to support those in crisis and a stressful transition in normal times, but especially not as a pandemic,” Labunski said. “I’m a single mom with adult children, including one with an intellectual disability, so, for the first time in my life, I have leaned on the government for help over the past year. For me, this benefit has been a lifeline. But lawmakers are not supporting a functional system when our family has often been in crisis. How could such an important system fail us now when we’ve most needed it?”
Labunski is one of hundreds of thousands of North Carolinians still experiencing joblessness a year after the start of the COVID-19 pandemic. Even as of the latest weekly data, North Carolina is still experiencing elevated claims each week. Ultimately, according to a new report from the NC Justice Center, the policy choices that designed the system in this way are reducing the effectiveness of the program to support people, their spending, and the broader economy.
“Industries hard hit by the pandemic benefit from a strong UI system but in North Carolina many of the workers in industries hardest hit aren’t getting the full support of an adequate state unemployment system,” said Alexandra Sirota, Director of the Budget & Tax Center, a project of the NC Justice Center, and author of the report. “Quite simply, a strong recovery requires a strong state Unemployment Insurance system.”
Cheetie Kumar owns Garland, a restaurant in Downtown Raleigh. This week marked the one-year anniversary of Kumar being forced to furlough employees. Though they have been able to re-hire some staff they are still not at full capacity, and Kumar said it will take months to reintroduce things they want back in their industry and to reevaluate those they do not.
“This isn’t going to be like turning on a light switch,” Kumar said. “[People] want to come back to work but we need to do it in a way that’s smart, that’s thoughtful, that’s empathetic, that’s set up for success… There is no way that we can recover from this crisis without our workers and there’s no way for workers to get back to work without a strong unemployment benefits system in our state.”
“No one wants to be unemployed. No one wants to lie awake at night, wondering how they’re going to pay the rent. No one wants to go to a food bank to feed their families,” said MaryBe McMillan, President of the NC State AFL-CIO. “Jobless workers are not looking for a handout – they are looking for a hand up to get back on their feet.”
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