August 28, 2015
NC lawmakers continue to bully jobless workers
New changes could be coming to our state’s unemployment insurance system if legislation adopted by the NC House become law as expected.
Instead of reversing any of their cruel cuts to jobless benefits made back in 2013 – cuts that now provide workers laid off through no fault of their own with just 12 weeks of coverage, down from 26, and pay at best just $350/week – the folks running our state plan to make it harder for workers to get any assistance while giving employer another tax cut.
Rob Christensen wrote about the changes for a must-read column in the News & Observer.
North Carolina has the stingiest unemployment insurance benefits in the country.
How stingy? If your plant closes or your company gets downsized, you are now eligible for a maximum of 12 weeks of unemployment insurance. Most states offer 26 weeks. Alabama offers 26 weeks. So does Mississippi, Texas, Tennessee and so forth.
But the legislature last week was worried that the state’s unemployment insurance program was too soft on laid off workers.
The House passed a bill that would require a person collecting unemployment benefits to make five weekly contacts per week with employers in order to receive benefits, instead of the current two contacts. It also adopted stricter identification requirements.
During the Great Recession, claims for unemployment insurance soared, but, owing to tax cuts during flush times, there wasn’t enough money to cover it, causing the state to borrow money from the federal government and creating a debt employers would have had to repay with a temporary surcharge on the U.I. taxes they pay.
But the Chamber of Commerce had a different idea to repay employers’ debt – cut benefits instead.
The way the legislature fixed the program was to put two-thirds of the costs of the changes on the backs of laid-off workers. The maximum weekly benefit was reduced by 35 percent from $535 per week to $350 per week – making it one of the lowest in the nation.
The new law also reduced the maximum number of weeks that will be paid, from 26 weeks to between 12 and 20 weeks, based on various economic conditions.
In the 1949 legislative session, the legislature, at the urging of Gov. Kerr Scott, increased unemployment benefits from 16 weeks to 20 weeks. So we have slipped back 66 years.
The only people alive today who can remember when North Carolina’s unemployment benefits were so paltry are senior citizens.
The other third of the $2.8 billion debt was paid for by employers through a 20 percent surtax and an increase in the taxable rate increase from 5.7 percent to 5.76 percent.
The legislature made the benefit cuts to workers permanent and the tax increases to business owners temporary.
With the $2.8 billion debt paid off in May, the legislature had a choice. It could repeal the business surcharge taxes or restore some of the benefit cuts. Of course it decided to repeal the business taxes. The legislature last week moved to suspend the 20 percent surcharge on businesses for the year 2016.
So why are our political leaders behaving this way when most of their constituents punch a clock or fill out a time card?