By John Quinterno and Dean Baker
Last year North Carolina undertook a radical overhaul of its
unemployment insurance system. Among the changes, legislators sharply
reduced the amount and length of regular unemployment insurance, cutting
the maximum weekly insurance amount by 35 percent and reducing the
maximum duration of compensation from 26 weeks to, currently, 17 weeks.
By implementing the cuts in weekly benefit amounts in July, North
Carolina forfeited its ability to participate in the federally-funded
Emergency Unemployment Compensation program, and consequently, an
estimated 70,000 individuals immediately lost long-term unemployment
insurance, while another 100,000 individuals who still would have been
eligible through the fall saw their insurance lapse sooner than would
have happened.
According to the legislation’s elected supporters, the overhaul was a
“difficult decision” needed to fix “a welfare-dependent program” and
push unemployed workers to get serious about finding a job--any job.
We’ve now had some time to test this view and the initial results do
not look promising for proponents of the cuts. The statewide
unemployment rate has in fact fallen sharply since the cuts were
implemented, dropping from 8.8 percent in June to 6.9 percent in
December.
This drop, however, did not come about because people rushed out and
found jobs. Employment as measured by the household survey used to
determine the unemployment rate rose by 41,364 persons (1 percent)
between June and December, far too little to explain the sharp drop in
the unemployment rate. According to the household survey, only 13,414
more persons (0.3 percent) were at work in December 2013 compared to a
year earlier.
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Legislatures and governance have been issuing policies that insist that workers take whatever jobs are offered. The norm that one should work at whatever jobs are available is being implemented through the elimination of welfare benefits: unemployment compensation, SNAP, TANF, etc
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