July 2, 2020/Press

How Did NC Become “The Worst State to Be Unemployed”? Thom Tillis

This week, more than 28,000 North Carolinians joined the more than one million workers across the state who have already filed for unemployment insurance. Yet those newly unemployed workers are running into a system that has “long been designed to exclude applicants” thanks to a “long campaign by North Carolina legislators to restrict and reduce benefits” led by then-Speaker of the House Thom Tillis that resulted in “the deepest cuts to any unemployment insurance system in the country.”

A ProPublica deep dive this week showed how Speaker Tillis turned North Carolina into “the worst state to be unemployed.” North Carolina workers are still paying for Tillis’ deep cuts:

  • At the end of 2019, fewer than 1 in 10 North Carolinians out of work received unemployment benefits, “the lowest rate in the country and well below the average of 26%.”
  • “The maximum number of weeks someone in the state can draw benefits is currently 12, compared with the national standard of 26 weeks.”
  • Those who receive benefits “get less money than they used to: Between 2008 and 2019, the percentage of a worker’s wages replaced has fallen from 53% to 38%.”

Tillis’ cuts were part of his broader “war on poor people,” according to a UNC professor, noting how Tillis also eliminated anti-poverty programs and blocked Medicaid expansion. Those Tillis policies have “left the state unprepared for the next recession” — and left people out of work “in the worst place to be.”

“North Carolina is the worst state to be unemployed and it’s thanks to Senator Thom Tillis,” NCDP spokesperson Robert Howard said. “Senator Tillis’ cuts were cruel then. Now, during a pandemic and unemployment crisis, they’re even more heartless. Senator Tillis has left people out of work and who are simply trying to stay healthy with little to fall back on, and made it harder for our state to recover from the current crisis.”


ProPublica: How North Carolina Transformed Itself Into the Worst State to Be Unemployed
By Ava Kofman 
June 30, 2020

Key Point:

  • But as real as those problems are, they ignore a more fundamental issue: Some state unemployment systems have long been designed to exclude applicants. “People are frustrated and complaining everywhere. But there are degrees of how well states are handling this based on their approach to the program,” said Andrew Stettner, a senior fellow at The Century Foundation, a progressive think tank. “The states that are doing the worst at this have historically done a bad job of it.”
  • Among the worst, historically and at present, is North Carolina. At the end of 2019 — when the economy was humming and pandemics were the stuff of horror fiction — fewer than 1 in 10 jobless people in North Carolina received unemployment benefits. That’s the lowest rate in the country and well below the average of 26%.
  • The maximum number of weeks someone in the state can draw benefits is currently 12, compared with the national standard of 26 weeks. And those who receive benefits get less money than they used to: Between 2008 and 2019, the percentage of a worker’s wages replaced has fallen from 53% to 38%. North Carolina also ranks as the worst state for getting benefits to workers in a timely manner.
  • These outcomes are the result of a long campaign by North Carolina legislators to restrict and reduce benefits. In 2013, only a few years after the last economic cataclysm, the state’s Republicans made the deepest cuts to any unemployment insurance system in the country. “It’s fair to say that we don’t want people on unemployment in North Carolina and that we want them to have jobs,” state Rep. David Lewis, a Republican who helped draft the 2013 legislation, told ProPublica.
  • The overwhelming need for benefits today, and the delays that millions of Americans like Hill-Watkins have in getting them, has set off a national awakening about the sorry state of unemployment insurance systems. That reckoning is acute in North Carolina, where jobless people will be particularly vulnerable when the $600 weekly unemployment payments from the federal CARES Act expire at the end of July.
  • Hill-Watkins is certain that she would not have been as eager to remain in North Carolina had she known what was to come. If she’d been working in, say, Massachusetts when her hours were reduced to zero, she might have quickly received her benefits, which average $557 a week, for up to 30 weeks, the longest duration in the country. In Massachusetts, 66% of new applicants got their unemployment insurance payments in March, compared with 29% nationally and fewer than 10% in North Carolina, according to a Pew study. “I could have been anywhere else in the country,” Hill-Watkins said. “And here I am in the worst place to be.”
  • For decades, North Carolina’s program was in the middle of the pack. Then came the rise of the Tea Party and James Arthur Pope, a retail heir who’s been a major funder for the state’s libertarian movement. In 2010, Republicans took control of both houses in the legislature and in 2012, secured the governorship, putting the GOP in full command of the state for the first time since Reconstruction.
  • Among the first items on the new administration’s agenda was an overhaul of the state’s unemployment program. In less than two weeks, the GOP supermajority passed HB 4, a bill that made the deepest cut to any state’s unemployment compensation in American history. “In terms of governing, this was the Republicans’ coming out party,” said Mac McCorkle, a former Democratic political consultant who now teaches at Duke University.
  • The bill slashed the duration of benefits and lowered maximum weekly payment amount from $535 to $350. It also changed how benefits were calculated — from the highest quarter of a claimant’s earnings in the last year to an average of the most recent two quarters. Since many workers have their hours and pay reduced in the quarter prior to layoffs, this resulted in smaller payouts. At the end of 2019, the national average for weekly payments was $378; in North Carolina, it was $277.
  • When the law went into effect on July 1, 2013, the effect on people collecting benefits was immediate and made national headlines. Before HB 4, residents had received extended benefits through the federal government’s 2009 stimulus package. But this federal aid, which lasted through 2013, required that states maintain their benefits structure. By rushing to implement their changes, rather than waiting until the end of the year, North Carolina’s Republicans forfeited their constituents’ eligibility for this program, stripping an estimated 170,000 people of benefits. It was the only legislature to do so.
  • That decision was “deeply unpopular” in the state, according to The American Conservative, in a 2013 article titled “How Raleigh’s Republicans Forgot the Working Class.” That analysis noted that North Carolinians were collecting extended unemployment not because it was comfortable but because “there are simply no jobs to be found.” At the time, the state had the fifth highest unemployment rate in the nation.
  • The cuts to the state’s unemployment program were part of a broader makeover by free-market ideologues, according to Gene Nichol, a law professor at the University of North Carolina. “Between 2013 and 2017, there was a real shift in the theory of the role of government, some might generously call it,” he said, noting the general assembly’s elimination of the state’s earned income tax credit, an anti-poverty program popular with conservatives, and its decision not to expand Medicaid through the Affordable Care Act. “I call it waging a war on poor people.”