Upwards of 70,000 jobless North Carolinians are about to see their finances go from bad to worse as they lose their unemployment benefits. Those are the benefits that can help families rocked by the Great Recession muddle through, paying the mortgage or the rent, keeping a car in the driveway and food on the table until job searches succeed and regular paychecks resume.
It didn’t have to be this way – still doesn’t, if the General Assembly would agree to a compromise before the benefit cutoff takes effect July 1. But conservative legislators and Gov. Pat McCrory, heeding the wishes of the state’s big-business lobby, the N.C. Chamber, made an overhaul of the state’s unemployment insurance system one of their first priorities after taking office early this year. Tightening up on benefits was a key part of the overhaul, and proposals to soften the blow to jobless workers have been rejected.
No wonder the scary prospect of seeing those benefits evaporate, inflicting even more misery on people struggling to pay for life’s necessities, was a focus of the June 24 “Moral Monday” protests at the legislature. The unemployment insurance “fix” may save employers some money, but the consequences for ordinary people who remain caught in the recession’s undertow despite their efforts to escape are simply intolerable in their callousness.
The business interests and their legislative allies who favor new restrictions on jobless benefits seem to think that unemployed people need a good kick in the pants, so to speak, to make them get off their couches and go look for work that’s available to anyone who wants it.
They seem to think that many people might rationally prefer to sit at home drawing modest, temporary benefits than to hold down a regular job. How insulting to honest, self-respecting folks who value the dignity of work and also know full well the practical advantages of being employed!
Crucial safety net
As a speaker at Moral Monday reminded the crowd, when someone is laid off, there goes his or her employment-based health insurance. Someone can try to maintain coverage through COBRA, but at rates that will devour a family’s savings. This is an incentive not to look for work?
Cutting off jobless benefits will make the situation all the more dire. No money coming in to pay for COBRA so that trips to the doctor are feasible. No money coming in to pay for the car that many people must have to commute. No money coming in for day care and other child-rearing expenses. For many people about to lose their unemployment benefits, it shapes up as a calamity. Kids’ health and well-being are particularly at risk.
North Carolina got itself in this bind because, back when the economy was humming, it cut employers a break on their unemployment insurance taxes. Then when the recession hit, the state had to borrow $2 billion from the federal government to cover jobless benefits.
The N.C. Chamber successfully argued for the debt to be repaid on an accelerated schedule to save employers money. But that meant reducing state benefits to jobless workers. Under the legislation enacted in February, maximum benefits will be chopped from $535 to $300 per week, and the benefit period will be trimmed from 26 weeks to between 12 and 20 weeks, depending on the unemployment rate at the time.
No awards for compassion there. But scaling back the state’s benefits means that legislators also are forfeiting North Carolina’s eligibility for the federal unemployment benefits program, which offers emergency relief to the long-term unemployed.
Freezing in July
To be eligible, a state must provide at least 26 weeks of its own benefits. The federal cutoff is set for July 1. Some 70,000 North Carolinians – people for whom the recession already has been a nightmare of long-term unemployment – will be frozen out, and estimates are that another 70,000 or more could be affected by year’s end.
So to save employers a few dollars per worker per year – and to encourage the jobless to search even harder for jobs that just aren’t there, or for which the job-seekers might not be qualified or physically suited – the shortsighted legislature would forgo some $20 million a week flowing into the state’s economy as benefit recipients pay for food, clothing and shelter.
The reasonable suggestion was made that North Carolina at least postpone its changes until the end of the year, keeping the federal safety net for the long-term jobless in place until then as the economy continues, we hope, to improve. But Republican legislative leaders have held firm. Not that they still couldn’t change their minds – perhaps with a nudge from Gov. McCrory, who was too quick to go along with this mean-spirited and counterproductive “reform.”
With the state’s jobless rate still fifth highest in the country, it’s unrealistic and inhumane to pretend that many thousands of North Carolinians could rejoin the ranks of the employed if they’d only try harder, and that stripping them of their benefits amounts to strong medicine that they just need to swallow for their own good.
State policies aren’t necessarily set in accord with religious precepts – this is not a theocracy. But if policies toward the unemployed become more mindful of the Christian responsibility to help safeguard the interests of the vulnerable, the Moral Monday folks will have gotten one important point across.
— Steve Ford, Volunteer Program Associate