WINSTON-SALEM, N.C. — North Carolina no longer offers the nation’s lowest number of weekly unemployment insurance benefits, according to the Winston-Salem Journal.
Florida gained that distinction this month by reducing its maximum amount from 16 to 14.
Florida and North Carolina are among only eight states that provide fewer than 26 weeks of state UI benefits. The others are Georgia (an increase of two weeks to 17 for 2015), Kansas (a decrease of four to 16), Michigan, Missouri and South Carolina (20 weeks.) and Arkansas (25 weeks).
The N.C. sliding scale reduces or raises the maximum and minimum number of weeks by every 0.5 percentage point change in the unemployment rate until the rate drops to 5 percent, at which time there would be a maximum of 12.
The benefit weeks are adjusted, if required, in January and July. The law also reduced the maximum weekly benefit amount from $530 to $350.
The new N.C. maximum remains below the average UI claimant duration of 17.5 weeks, according to the N.C. Division of Employment Security.
Gov. Pat McCrory, legislative leaders and some right-leaning analysts say the approach has made individuals more willing to take available jobs — including at lower wages and potentially below their skill level — as their benefits run out.
“Restructuring North Carolina’s unemployment insurance system and aligning it with those of our neighboring states has set our unemployment program on a path to sustainability,” McCrory said when he signed the law.
Allen Freyer, public policy analyst with the left-leaning N.C. Budget & Tax Center, has said “there’s nothing aligned about a system at the bottom of the nation.”
Legislative supporters of clarifying eligibility requirements — including potentially setting a minimum of 12 weeks — are expected to introduce a bill during the long session.
A draft bill unveiled Dec. 3 would remove the required minimum number of days involved in pursuing a job, but raise the number of weekly job contacts to five. Currently, claimants are required to have sought work on at least two different days per benefit week, and make at least two job contacts.
Claimants would be required to provide a photo identification to verify their claims. They would continue to record their work-search efforts, describe the method of contact and make them available to division officials upon request.
The bill would go into effect July 1 if passed.
A byproduct of the benefit reductions has been North Carolina’s progress in paying off $2.8 billion borrowed from the U.S. Labor and Treasury departments to help finance extended state UI benefits during the economic downturn that began in late 2007.
The debt has been reduced to $425.7 million as of Thursday. It is on track to be paid off completely by August.
The debt was created in part when a Democratic-controlled General Assembly approved a series of UI tax cuts in the 1990s when the state’s jobless rate was well below 5 percent, which economists consider full employment.
The tax rate was not increased for years even as the state and nation experienced two recessions because it was feared that doing so could deter employers from hiring.
Since 2011, employers have been required to pay an annual increase of $21 for each employee in the companies’ federal UI tax until the debt is retired. The employers’ UI tax rose to $125 this year.
Once the state’s debt is repaid, the UI tax reverts to $42 for each employee. The initiative would be complete when a $1 billion balance is established in the UI account as a rainy-day fund for future economic downturns.
However, unless there is a legislative change, the weekly benefit amounts would remain on the sliding scale and total benefit weeks would remain at the reduced levels.
North Carolina also became the first state to base UI payments on claimants’ last two completed quarters of earnings rather than the traditional average of their two highest payment quarters. That means claimants affected by illness, reduced hours or seasonal layoffs would receive lower UI benefits.