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Lawmakers propose radical changes to unemployment insurance

Jeremy Sprinkle
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Jobless workers will pay the price for Chamber's greedy scheme

This bad news. Very bad news for workers in North Carolina who have lost their jobs through no fault of their own

On Wednesday, Republican state lawmakers unveiled a proposal to pay off our state's $2.48 billion debt to the federal government incurred when North Carolina's unemployment trust fund ran out of money to pay jobless benefits, the need for which spiked during the economic crisis when hundreds of thousands of North Carolinians lost their jobs and income. Over 430,000 North Carolinians are still jobless.

A plan already exists to repay that debt - an extra $21 assessment on employers per employee per year - which equals about a penny per hour of full-time work. Too bad for workers who have lost their livelihood, that penny per hour is too rich for businesses represented by the North Carolina Chamber of Commerce.

Instead, according to the plan announced by the Revenue Laws Study Committee this week but actually developed weeks ago in secret by select lawmakers and lobbyists for the Chamber - without input from labor or other advocates for workers, North Carolina's vital unemployment insurance system will undergo radical changes.

"The proposal was everything we anticipated it would be - a clear dismantling of the state’s unemployment insurance system that will harm North Carolina’s workers who have lost jobs through no fault of their own," said Russell Baggett, campaign coordinator for the NC Justice Center, in an email to folks who signed a petition to protect the system. "This plan includes some of the most radical ideas on UI ever proposed in any state and as such will not fix the problems with the system nor put North Carolina on sounder footing for future downturns."

Under the Chamber's plan:

  • payments would be cut by $185 a week - now, most unemployed workers receive an average benefit of only $290 a week
  • the number of weeks would be cut from 26 to 20 at most and perhaps as few as five weeks, depending on the unemployment rate
  • after 10 weeks, workers would be required to take any job that pays 120% of their benefit - just $8.70/hr based on the average benefit
  • state unemployment taxes would rise by just 0.06% on a third of private employers

NC State AFL-CIO Secretary-Treasurer MaryBe McMillan talked about the Chamber's scheme in an interview with Chris Fitzsimon, director of NC Policy Watch, for the radio program News and Views set to air on Sunday. In this clip from the interview, McMillan correctly points out that the current shortfall in the unemployment trust fund dates back to tax cuts the Chamber lobbied for in the boom-times of the 1990's.

"Now they want to rebuild the fund on the backs of workers, and I don't think that's right," says McMillan.

"The majority of workers, they don't want checks. They want jobs. They want dignity. They want respect at work, and most of all, they want a legislature that promotes the interests of the people." -- MaryBe McMillan

In its editorial yesterday, the Raleigh News & Observer hit the nail on the head when it described the deal this way:

"This is about Republicans trying to take care of business, literally, and doing so on the backs of average people who are in trouble already."

Of course, this is what happens when the fox is put in charge of the hen-house, as happened when Republicans took over the state legislature in 2010 and the governor's mansion in 2012. The fox gets whatever it wants, and the hens will be lucky to survive.

Get involved in the campaign to protect North Carolina's unemployment insurance system at