Life gets tougher as of Sunday for over 400,000 out of work Tarheels as a set of unprecedented cuts to jobless benefits passed by North Carolina Republicans in February take effect. The bill didn’t just shorten the length of state-funded unemployment insurance, as several states have done. It also cut the level of weekly benefit payments, violating a provision of the federal unemployment insurance program and leaving the state ineligible for federal jobless funds.
North Carolina is the first state to be dropped from the national Emergency Unemployment Compensation program, which provides funds for eligible job seekers when they exhaust state-level benefit programs. Seven other states have enacted jobless insurance cuts that will mean their unemployed citizens receive fewer weeks of federal benefits, but North Carolina is the only state to have made itself outright ineligible for the money.
North Carolina’s Republicans said their slashing of jobless benefits will “put North Carolinians back to work.” But that’s not what the evidence says. Multiple research findings indicate that unemployment insurance doesn’t cause a substantial increase in how long someone remains without work. Recipients actually work harder to find a job than non-recipients who are unemployed, as active job seeking is a condition of the benefit.
And economist Larry Katz, whose 1980s research on the subject is frequently cited by the right, says his previous findings about unemployment insurance extending the duration of unemployment don’t apply in the Great Recession. “I strongly favor extensions of UI benefits when the labor market is weak,” Katz told PolitiFact in 2009. Booting job-seekers from the support system does nothing to change the ugly reality that there are still three unemployed people for every job opening. That ratio of job hunters to available jobs is down from nearly 7:1 in mid-2009.
The combined safety net of federal and state unemployment insurance programs kept 2.3 million Americans out of poverty in 2011.
Benefits are already very low without cuts. The maximum weekly benefit in the state had been $535, before taxes, but the average benefit was far lower: $299 per week, pre-tax, according to the Department of Labor. The national average hovers around $300 per week as well.