Senator Thom Tillis was the architect behind deep cuts to North Carolina’s unemployment insurance when he was Speaker of the NC House, part of an “ideologically inspired effort to effectively eliminate unemployment insurance.” Now, with the unemployment rolls swelling because of the coronavirus, experts say Tillis’ deep benefits cuts have left workers worse off and left the state “in a more challenging position to recover from a recession.”
North Carolina’s “recipiency rate” – the share of unemployed workers receiving benefits from regular state programs – is the nation’s lowest and the state ranks “among lowest-paying states for unemployment benefits” thanks to Tillis’ deep cuts. A tenth of the North Carolina workforce “has filed for unemployment” largely because of coronavirus, yet those workers will receive less help and for fewer weeks than before Tillis took office. According to one expert:
- At the end of 2007, some 38 percent of unemployed Tar Heels received unemployment insurance payments, with the average benefit totaling $282/week; claimants also could have received payments for 26 weeks.
- At the end of 2019, in contrast, 10 percent of unemployed Tar Heels received unemployment insurance, with the average benefit totaling $277/week while the maximum benefit duration had been slashed by more than half, to 12 weeks.
Tillis’ role has prompted harsh coverage from in-state experts and editorial boards. The CBC editorial board blasted Senator Tillis, writing that the newly unemployed are “victims” of a legislature led by Tillis “that too often sought to comfort the wealthy at the expense of the state’s working families, children and the disadvantaged.” And a local expert said Tillis’ cuts “deliberately” stripped the state’s “capabilities to deliver meaningful aid to jobless persons and to stabilize the larger economy” and were nothing more than an “excuse to cut business taxes significantly by radically restricting benefit eligibility, amounts, and durations.”
IN CASE YOU MISSED IT
CBC: Editorial: North Carolina’s neglected unemployed need and deserve better, now
By the Editorial Board
April 10, 2020
- When it comes to demonstrating concern for working North Carolinians, here’s what Senate Leader Phil Berger, House Speaker Tim Moore and former state House Speaker and now U.S. Sen Thom Tillis have to show:
- The lowest in-the-nation unemployment insurance system – leaving the flood of newly unemployed with unreasonably small weekly benefits and for very few weeks. When the recently passed federal boost in benefits ends, which these workers receive for a shorter period than workers in most other states, they will find themselves in deep financial trouble. The state’s current unemployment system status, say economic experts, has left North Carolina in a more challenging position to recover from a recession.
- By being one of just 14 states that has not expanded Medicaid – that already has left half-a-million North Carolinians without access to health care and worsened the already shaky status of rural hospitals – has left those who just days ago had health coverage and now suddenly none with little ways to afford care they may need.
- That lack of concern and preparedness has left nearly half a million hard working North Carolinians, who never dreamt of being out of a job, applying for unemployment benefits as a result of policy orders relating to the COVID-19 outbreak. They may be victims of a legislature that too often sought to comfort the wealthy at the expense of the state’s working families, children and the disadvantaged. The 2013 reforms to the state’s system, in reality “was an ideologically inspired effort to effectively eliminate unemployment insurance.” It appears to have been working. At the end of 2007 about 38 percent of North Carolina’s unemployed received unemployment insurance payments for as many as 26 weeks. By the end of last year, that was down to 10 percent who received benefits for no more than 12 weeks.
- Addressing administrative processes, however, will not fix the fundamental issue – North Carolina’s unemployment insurance benefits are less than they were a decade ago and fail to provide the help that is needed today.
CBC: JOHN QUINTERNO: North Carolina’s unemployment benefits – How low can you go?
By John Quinterno
April 7, 2020
- 423,901. That is how many North Carolinians filed initial claims for unemployment insurance between March 16 and April 5, according to the state Department of Commerce. Sadly, many of those left unemployed by the COVID-19 crisis are about to discover the painful truth that North Carolina’s unemployment insurance system deliberately has been stripped of its capabilities to deliver meaningful aid to jobless persons and to stabilize the larger economy.
- In 2013, the General Assembly enacted arguably the most comprehensive restructuring of the unemployment insurance system since its creation. The stated rationale was that changes were needed to repay as much as $2.8 billion in advances taken from the federal government to keep paying benefits during the “Great Recession.” The state did exhaust its trust fund and needed federal help, but that exhaustion stemmed from the scale of job losses that accompanied the 2008 and 2001 recessions combined with a series of ill-advised tax cuts in the 1990s that undercut the fund’s long-term solvency.
- Even without state action, the federal advances would have been repaid through gradual increases in the federal unemployment insurance tax. The repayment issue was simply an excuse to cut business taxes significantly by radically restricting benefit eligibility, amounts, and durations. By restricting payouts, the state was able to slash taxes and amass a trust fund balance of $4 billion.
- Consider this: At the end of 2007, some 38 percent of unemployed Tar Heels received unemployment insurance payments, with the average benefit totaling $282/week; claimants also could have received payments for 26 weeks.
- At the end of 2019, in contrast, 10 percent of unemployed Tar Heels received unemployment insurance, with the average benefit totaling $277/week while the maximum benefit duration had fallen to 12 weeks.
- What does this mean for the North Carolinians who have lost or will lose jobs during the COVID-19 crisis?
- First, many individuals will discover that they simply do not qualify for regular state unemployment insurance benefits. Self-employed persons, independent contractors, and “gig economy” workers generally are ineligible, while other workers will not satisfy the existing non-monetary and monetary criteria. That is especially likely for low-wage workers with erratic schedules and uneven earnings histories.
- Second, those who do qualify will receive modest benefits—the maximum benefit is $350/week—for no more than 12 weeks. Finally, successful claimants will benefit less from the expansions authorized by the federal CARES Act.
- In short, unemployed North Carolinians lucky enough to qualify for insurance will receive far less for far shorter periods than their counterparts in much of the country.
- The COVID-19 crisis has confronted North Carolina’s unemployment insurance system with a moment of truth. It is time to admit that the 2013 “reform” was an ideologically inspired effort to effectively eliminate unemployment insurance. Absent change, the system will prove incapable of providing meaningful assistance on a scale commensurate with the wave of joblessness sweeping across the state alongside the coronavirus.
Winston Salem Journal: NC’s status among lowest-paying states for unemployment benefits is by GOP design
By Richard Craver Winston-Salem Journal
April 5, 2020
- How did North Carolina get here with such low unemployment insurance benefits available?
- The primary answer is that these are levels that Republican legislative leaders have been comfortable with for nearly seven years as the state slowly emerged from the depths of the Great Recession of 2008-11.
- The UI reductions were the key elements in the passage of House Bill 4, which was ratified by the GOP super-majority legislature on Feb. 14, 2013, and signed into law by then-Republican Gov. Pat McCrory on Feb. 19, 2013.
- Now, like in 2013, Republican legislative leaders favor limited UI benefits, in part because they didn’t want recipients — who lost their job through no fault of their own — to rely on the benefits over working.
- Senate president pro tem Phil Berger, R-Rockingham, and then-House speaker Thom Tillis, R-Mecklenburg, jointly touted the benefit reductions in HB4.
- Tillis used his final two years as speaker as a springboard toward being elected as North Carolina’s junior U.S. senator in November 2014. He is engaged in a toss-up 2020 re-election fight with Democrat Cal Cunningham in which the balance of the chamber could be decided.
- It didn’t take long for unemployed North Carolinians to get their first taste of reality from the UI benefit cuts.
- States that made changes to their UI benefits laws without congressional approval in the 2012-13 time period were disqualified from receiving extended federal benefits. North Carolina was the only state to plow ahead.
- According to the U.S. Labor Department, that decision cost North Carolina an estimated $780 million in UI benefits for the second half of 2013 even though the state’s jobless rate was at 8% during that time. Those funds could have helped 85,000 unemployed North Carolinians, including 15,000 in the Triad.
- According to a National Employment Law Project report released in June, legislatures looking to reduce the number of people eligible for UI have cut benefits through four primary methods:
- Increasing the amount of earned wages needed to qualify;
- Redefining who qualifies;
- Reducing duration of benefits; and
- Imposing stricter ongoing eligibility requirements.
- The nonprofit group’s report found that 25% of UI benefit claims nationwide were denied for reasons unrelated to the cause of their unemployment, in particular the job-search requirements and online claim procedures.
- The N.C. legislature has imposed all four restrictions, including requiring recipients to wait multiple weeks to receive benefits, as well as raising the number of required weekly job search contacts from two to five for people who receive UI benefits.