But as of this weekend, the situation is going to get a lot worse for about 70,000 out-of-work residents. Having bought into the cries for austerity, Republican Gov. Pat McCrory and the legislature made it a priority to slash unemployment compensation in February. As a result, North Carolina will be the first to lose a lifeline for the long-term unemployed—the Federal Emergency Unemployment Compensation Program.
That 100 percent federally funded program was enacted because of the Great Recession. It extended the period of time jobless Americans could collect compensation checks to as much as 99 weeks in the worst-hit states. Nationwide, 1.7 million Americans still receive compensation under the EUC. Unless Congress acts, which seems highly unlikely, the entire program expires Dec. 31 this year. But North Carolina is bailing six months early.
The reason North Carolinians will no longer be covered under the federal program is because the legislature cut maximum compensation of the state unemployment program to $350 a week. Under the provisions of the EUC, no such cuts are allowed without a federal waiver, which North Carolina did not obtain.
The stated rationale behind the cuts? North Carolina owes the federal government $2.1 billion it borrowed to cover payments when it ran out of money in the state compensation fund because of the severity of the recession. The goal is to pay off that debt by 2015. Nineteen other states also borrowed money from the feds to cover holes in their compensation funds.
Altogether, between now and 2017, the North Carolina legislature's fiscal research office says, the state will save $3.6 billion from compensation cuts and an additional charge to businesses of $42 a year for each employee. Of the total, 74 percent of the savings will come from cuts in worker compensation.
Not only did the legislature whack how much an eligible jobless person can collect each week—the average is $292.60—it also cut how long a person can collect payments to 20 weeks from the 26 weeks every state has provided compensation for the past half-century. If the unemployment rate falls far enough in North Carolina, the maximum compensation period will be reduced to just 12 weeks, the lowest in the nation.
The package of cuts was originally the work of the North Carolina Chamber of Commerce, the state's main business lobby.
Please continue reading about the situation in North Carolina below the fold.
So, in two days, those eligible for compensation in North Carolina can collect a maximum weekly payment of $350 for a maximum of 20 weeks.
For comparison, New Jersey, whose official jobless rate at 8.6 percent is just barely under North Carolina's—and also owes the feds money it borrowed because heavy, long-term unemployment had drained its compensation fund—the maximum weekly check is $624 for 26 weeks from the state fund and 47 weeks from the federal EUC.
In the Tar Heel State, it's going to be grim going for those 70,000:
Wayne Bostick, 58, of Raleigh, said he lost his job in April 2011 and will lose extended federal benefits immediately. He said he earned about $700 a week in take-home pay, often working double shifts at a ConAgra Foods plant until it shut down after a fatal explosion. Since then, he said, the only jobs he’s found matching his skills pay less than $10 an hour and are outside Raleigh. Now he’ll have to revisit those or start a handyman business.But to the state's lawmakers, the plight of Bostick and 70,000 other out-of-work citizens makes no never-mind.
“I’d rather do that than bring home $200” after commuting and taxes, he said. “They are really putting the gun to your head now.”