"Governor: We Cut Unemployment Benefits To Stop People From Moving To North Carolina"
Gov. Pat McCrory (R-NC) claimed this weekend that gutting the state’s unemployment benefits has sent people back to where “they came from,” presumably because they moved to the state only to collect “very generous benefits” for unemployment.
Asked by NC Spin why North Carolina’s employment numbers have dropped dramatically since signing the unemployment bill, McCrory pointed to the state disqualifying itself from long-term federal benefits for the unemployed last year:
We had the ninth most generous unemployment compensation in the country and we were having a lot of people move here, frankly, especially in urban areas to get unemployment and then work other sectors and survive. So, people were moving here because of our very generous benefits, and then of course, we had more debt. So I think, personally, more people got off unemployment and either got jobs or moved back to where they were going or came from and quit the migration as much because of unemployment. We’ve seen this in other states where the benefits are very high, it could draw people from outside the state.
According to spokesperson Kim Genardo, McCrory based his logic on “personal stories he’s heard.” But WRAL points out that it is doubtful unemployed workers were relocating to North Carolina for the generous unemployment benefits. Residents must have worked in the state for at least six months of the last 15 to prove eligibility for the program.
In fact, the very sources the governor’s office cite for evidence all make a case in favor of continuing benefits: Unemployment insurance is a strong incentive to find work, since recipients must actively search for a job in order to collect. But the opposite scenario is now happening in North Carolina: The unemployment rate has fallen a percentage point, but that likely has a lot to do with people dropping out of the labor force. As the length of benefits shortened from 99 weeks to 19, 170,000 people lost federal benefits and others saw their weekly checks fall by nearly $200. In the wake of that change, the state has seen its labor participation shrink to a 37-year low:
After Congress failed to extend long-term unemployment insurance, the rest of the country’s unemployed have joined North Carolina. More than 1 million people who have been out of work longer than six months have lost compensation, and Florida, South Carolina, Missouri, Georgia, Michigan, and North Carolina now provide fewer than 26 weeks of benefits. There has been an immediate impact on the economy, with state economies losing $400 million in a single week.
North Carolina’s failed experiment hasn’t prevented Republicans from highlighting the policy as a success. A Republican memo instructed lawmakers to spin it as a proof that ending the program can help the unemployed. But the memo merely asks Republicans to look compassionate while promoting policies that add more obstacles to finding work.