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How to Disappear the Unemployed (See North Carolina)

07/10/2013 11:28 am 11:28:35 | Updated Sep 09, 2013

Today, four years after the end of the Great Recession, 11.8 million Americans are unemployed, four million more than before the financial meltdown of 2008. With the jobs deficit still topping eight million, it will take several years before employment returns to pre-recession levels, say most economists. And on top of that, recent empirical research solidly documents hiring discrimination against those unemployed more than six months.

Unfortunately, some state lawmakers are not much interested in understanding or solving the continuing unemployment problem; they just want it to go away. So in an increasing number of states, the perceived "problem" is no longer "unemployment" -- it's the "unemployed." And the most convenient and politically facile way to attack the unemployed is to attack unemployment insurance, the New Deal insurance program that provides modest income support to qualifying workers who lose their jobs through no fault of their own.

Historically, state unemployment insurance programs provided up to 26 weeks of benefits and aimed to replace roughly half a worker's pre-layoff earnings. The average weekly unemployment insurance payment nationally is about $300. When recessions hit and unemployment climbs, Congress typically responds with additional weeks of federally-funded unemployment insurance, including most recently the Emergency Unemployment Compensation program President Bush signed into law in 2008. As long-term unemployment (officially defined as joblessness exceeding 26 weeks) increased to record levels in 2009 and 2010, the duration of federal benefits also increased. And in 2012, Congress began scaling the program back.

State unemployment insurance programs have been under siege since 2010. Seven states have slashed available benefits to 20 weeks or less, even though finding a job takes the average unemployed worker close to nine months. With so many Americans feeling squeezed, some state lawmakers and governors have found it politically expedient to question the worthiness of unemployed workers receiving a government payment, even though that payment reflects their work histories. The implicit -- and sometimes, explicit -- message is that jobless workers are just not looking hard enough for work, they are lazy, and they may be using drugs.

In February, the North Carolina General Assembly passed the harshest unemployment insurance program cuts in our nation's history. North Carolina's unemployment rate more than doubled during the downturn, eventually topping 11 percent. Like many states, North Carolina had to borrow heavily from the federal government to meet the demand for benefits, with the borrowing largely necessary because the state's unemployment fund was depleted by employer tax cuts dating back to the early 1990s. To limit federal unemployment tax increases that would recoup that debt, business pushed the legislature to cut benefits instead. Lawmakers responded with House Bill 4, which reduces available weeks of insurance to as little as 12 weeks, cuts the maximum weekly benefit by 35 percent (down to $350) and imposes a new benefit formula dramatically reducing average weekly payments to the unemployed. The legislature's fiscal office estimated that in one year, these cuts would slice the state's program in half. House Bill 4, which included a host of other harsh benefit restrictions proposed in a business-commissioned study, flew through the North Carolina legislature within two weeks of the session's opening without a single public hearing.

What makes the North Carolina story more than simply another chapter in the attacks on unemployment insurance is that by rushing to make these cuts effective in July, the state broke an agreement with the federal government not to reduce average weekly unemployment checks while receiving federal unemployment insurance funds. Electing to proceed with this change, as new Governor Pat McCrory vowed to do, will cost the state roughly $700 million that would otherwise go to long-term unemployed workers and their families -- and directly back into North Carolina's economy.

The governor knew that North Carolina would become the only state in the country providing no income protection for unemployed workers who do not find a job by the time their state benefits run out -- a change hurting more than 50 percent of unemployed North Carolinians. Although he could have avoided this result by delaying just two of the law's provisions until next January, the governor chose not to, instead telling a meeting of the state's Tobacco Growers Association: "I will not support the extension of unemployment beyond July of this year. I think we need to now draw the line."

That line drawn by Governor McCrory and the Republican majorities in the North Carolina General Assembly has taken the war on the unemployed to the next level. This week, more than 70,000 unemployed North Carolinians lost their federal unemployment insurance -- benefits that help pay for food, rents and mortgages; benefits that are not funded by the state or its employers; dollars that would help boost consumer demand by more than $1 billion in a state that still boasts the fifth-highest unemployment rate in the country.

As we slowly turn the corner in today's economy and unemployment fatigue settles in, we risk losing sight of those Americans still fighting to get back in the game -- families that are patching together temporary assignments, multiple part-time jobs, low-paying work with less job security, and those still looking for an employer to take a chance on them. They are not just the rubble of the economic crisis to be cleared away and pushed out of public view. As a nation, it is time to stand up against attacks on the unemployed. We are better than this.

George Wentworth is a senior staff attorney at the National Employment Law Project.