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Unemployment benefits weeks will decline in July

Jobs unemployment

WINSTON-SALEM, N.C. — It’s not a matter of if, or even when, North Carolinians will face another reduction in benefit weeks for unemployment insurance.

With the jobless rate dropping 0.3 percentage points to 6.4 percent in February, those benefits will go down – per state law – on July 1.

The only question is by how much the benefit weeks will drop – four or five weeks – from the current maximum of 19 and minimum of 12. At a jobless rate between 6.1 percent and 6.5 percent, the weeks would fall to a maximum of 14 and minimum of seven.

The lowest current maximum benefit limit is 18 weeks in Georgia, while Florida also is at 19.

When Gov. Pat McCrory signed into law House Bill 4 in February 2013, he provided the first measuring stick for whether his conservative approach to running the state economy will create jobs. Before the bill was passed, the maximum benefit amount was 26 weeks – the same level that 44 states still maintain.

McCrory touted that the benefit reductions would “protect our small businesses from continued over-taxation and help provide an economic climate that allows job creators to start hiring again.”

However, the sliding scale doesn’t take into account factors contributing to the rate decline, such as discouraged workers exiting the labor force. Because those individuals aren’t counted as unemployed by federal and state labor officials, it serves to lower the rate.

There are 112,126 fewer North Carolinians listed as unemployed from February 2013 to February 2014, the N.C. Commerce Department said Friday.

Yet, the state only had a net gain of 48,459 jobs during that time period. The data do not distinguish how many of the new private-sectors jobs are full time, temporary or part time.

In that time, the state rate has declined from 8.6 percent to 6.4 percent.

Several research groups, such as the Economic Policy Institute, say there are at least three applicants for every job opening in North Carolina.

“This demonstrates the design flaw in a policy that uses one metric, the unemployment rate, to assess the health of the labor market for workers who want to work, but for whom there are not enough jobs,” said Alexandra Forter Sirota, director of the left-leaning N.C. Budget and Tax Center.

“The results of fewer weeks will only create greater hardship in communities.”

The N.C. law allows for the number of benefit weeks to be adjusted every Jan. 1 and July 1, based on the average jobless rate of the first three months of the previous six-month period, i.e., July, August and September for the first six months of the year and January, February and March for the second half.

Every 0.5 percentage point drop in the rate lower the maximum and minimum week levels by one. The scale stops at five and 12 weeks when the rate is at or below 5.5 percent.

McCrory and Republican legislative leaders say the tough-love approach have made individuals more willing to take available jobs, including at lower wages and potentially below their skill level, as their benefits run out.

Sen. Robert Rucho, R-Mecklenburg, serves as co-chair with Rep. Julia Howard, R-Davie, on a legislative oversight committee on unemployment benefits.

Rucho said Friday he is convinced that House Bill 4 is working as designed. Howard did not return phone calls seeking comment, although she has referred to extended UI benefits “as a welfare-dependent program in a lot of cases.”

Rucho said it is not fair to single out North Carolina’s declining labor force as a key factor for its lower jobless rate “since a similar thing is happening in every state.” Rucho said one key factor is an increasing number of baby boomers opting to retire.

The traditional jobless rate does not include several categories of people, including those who have stopped looking for work, including for job training or other educational efforts, are retired, are underemployed for their work skills, are able to work full time but can only get part-time work, or are receiving a severance package after the elimination of their job.

A rate compiled by the U.S. Bureau of Labor Statistics, the U6 index, includes those categories. As of Dec. 31, the U6 index rate for North Carolina was 14.7 percent compared with 12.6 percent nationally on Feb. 28.

Rucho said the sliding benefits scale is “necessary” as a means of limiting the benefits “to their original purpose, temporary assistance for people during a time of economic downturn as they look for another job.”

John Hood, president of the right-leaning John Locke Foundation, said “it might be reasonable to adjust the standard for benefit changes to take into consideration the reasons for long-term drops in jobless rates.”

However, John Quinterno, a principal with research firm South by North Strategies Ltd., said he does not believe the legislature will revisit the sliding scale in the short term since “they succeeded in enacting a major reform consistent with conservative priorities.”

The reasons why the jobless rate is declining, and the reforms initiated by the legislature, “have effectively decoupled the unemployment insurance system from actual conditions in the labor market,” he said.

12 comments

  • Duh huh.

    How about that… NC cuts unemployment benefits & so the unemployment rate goes down. Everyone know the majority of people collecting are using the system. Now they are really looking for work & finding it. Now, let’s cut benefits for all the illegals collecting WIC for, what should be, their illegal children as well. enough is enough. Stop the handouts. Lastly we are tired of the liberals using the “poor little old lady” to keep giving handouts to their voter base of scammers. Little old ladies aren’t the problem.

  • articulate and clean

    All accurate and well established facts. only an idiot lib.t.a.r.d will disagree with you.

    • Vanessa

      Well, I am that unemployed “refuse to use that term to lower myself to your complete lack of standards.” Because of this state’s inability to draw new business, I am unable to find work. I have applied for upwards of 65 jobs since December, many beneath me, and received only one reply and one interview. So, the lies parading as facts are just that, lies. Because I cannot find a paying job, I am volunteering my time to make difference. I can’t just sit still and do nothing. I can barely live on the paltry amount given to me in unemployment, but I still have no problem volunteering to help others. Your lies are wrong. This liberal is busting her butt to find a job long before the unemployment runs out. I hope you never have to find yourself in the same position. And, if you do, you better be greatful for the less than minimum wage amount you receive for all of the work you did prior to earning it!

  • nurse one

    I agree. It is the abusers of the system who make a mess of things. It is a shame we cannot bring more jobs back to our own country. I also agree I do not want my tax dollars supporting the 15 children of illegals. We have enough good, educated American people who cannot find work as it is, let alone 10+ million more. I know there are many who will not look for jobs, but there are many more who do and the jobs are not there. Cutbacks, layoffs, closures…all around with no replacements. It is not good.

  • JACK

    Why are me made to feel like we’re asking for something that we don’t deserve, when we paid into the system all of our working years? YOU’RE NOT GIVING US A HAND OUT OR CHARITY. This is why taxes had been taken out of our paychecks every week. This money doesn’t belong to you, to do with it as you will. Such as using our money to bailout the corrupt banking industry. I don’t recall much senate debate when approving the bailouts. This I will remind you again, is what was the direct reason for the poor economy both here and around the entire world. This was done by greedy bankers, and was paid for by the working men and women of this country. By the way, what did we get in return from the banks? We’re paying even more banking fees and they’re making huge profits because of it. Crime really seemed to work out for them. They actually gave themselves huge bonuses after the bailout. Our tax payer dollars also bailed out the Airline industry too. How were we thanked in return? Poor service, and added fees for everything but using the toilet. Now Americans are unemployed and need to pay their bills and provide for the families, and we’re being told that the senate can’t pass the extension bill “because it’s too late to vote for it now” according to John Boehner. This is one of the Republicans that have rejected and tried killing the bill since last December. Now he’s claiming that too much time has gone by, and it can’t be approved. How did we ever have the misfortune to have such uncompassionate, self-centered, self-indulged, self-promoting, career politicians, claiming to represent our best interests? Two million unemployed families are still having to struggle day to day, not knowing if they will even have a roof over their head, and these clowns continue to play “party politics’

    • em11965

      I agree 100. Only dumb a** people assume that people on UI don’t want to work. One. UI is a fraction of your salary that is barely enough. Two. UI makes up such a small percentage of the budget. But bank bailouts and aid to foreign contries make up a much larger percentage.

      John Bone-head Boehner is by far the dumbest person ever to become Speaker of the House in US History. UI allows people to find critical jobs to the economy, instead of grabbing minimum wage jobs that can go to our younger children while they finish college.

      • Duh huh.

        Your statement is babble & all over the place. Typical libtard that thinks we can continue to borrow & spend for ever. People have opportunity and make choices for where they are in their lives. Like my grandpa always said, the world needs broom pushers as well as managers. Our system in the USA works, look at our community organizer & chief, Hillary Clinton, judge Thomas, Abe Lincoln, dr king and so many more stories of people putting forth effort & obtaining a desirable outcome. I don’t care what color or origin you are, nobody is going to give you anything without you working for it.

  • Tammy

    The only reason the jobless rate is down is that some of us, after applying all day for jobs for years, have simply stopped searching.

  • Vanessa

    I am currently on unemployment, and have applied for no less than 65 jobs since December. In that time, I have had one interview. Don’t tell me I’m “using” the system. I have worked my butt off for 23 years (I’m 38) and if just one of the jobs I have applied for responded, I would take it in a heartbeat! Don’t judge what you could not possibly hope to understand. I hope you never have to find yourself on unemployment, but if you do, I hope you realize how impossible it is to live on so little money per week.

  • somepeoplejustdontknowthewholetruth

    Wow, people on here are amazing. Such ignorance, I am unemployed and have ut out well over 400 resumes, maybe gotten calls on 40 of them, gone on maybe 20 interviews to be told I am over qualified, or because the cannot match my pay I made at my last job that they do not feel it is fait I would be getting paid less. I have told them, I do not care about the pay, i just want off of unemployment, So, to all that are saying the unemployed are lazy and not looking, go screw yourselves. We are looking, the employers are denying us, BTW, I also have a college degree and owe $100,000 in student loans. So, no I am not lazy by any means. As someone stated, I paid into unemployment, I am 41 years old, been working since I was 15 and a half, never been unemployed until this last year,.

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