Report: Unemployment insurance changes threaten North Carolina’s jobless workers, NC economy

Changes made a year ago will harm unemployed, threaten state’s workers and communities, says an analysis prepared by the Budget & Tax Center

RALEIGH (July 14, 2014) – North Carolina’s changes to the unemployment insurance system last year threaten the state’s economy and harm workers who are unemployed through no fault of their own, says a new report released today.

The changes made to the state’s unemployment insurance system a year ago have caused pain for North Carolina workers and communities, and those consequences will only expand in the future, said Alexandra Forter Sirota, author of the report and director of the Budget & Tax Center.

“The cumulative effect of these changes is a double whammy for people out of work through no fault of their own,” said Sirota. “Our families and communities will continue to suffer from the economic consequences of these choices.”

People out of work through no fault of their own rely on the unemployment insurance system. But with the changes, the amount of money they can collect has gone down and so has the number of weeks they can collect it.

As of July 1, North Carolinians who have lost their job through no fault of their own will be able to receive a maximum of only 14 weeks of unemployment insurance compared to the previous maximum of 26. No other state offers fewer weeks. Meanwhile, jobless workers qualifying for unemployment insurance will get nearly $300 less on average each month.

“The combined result will be a significant reduction in the capacity of jobless workers to afford the basics for their families, let alone put gas in their cars to get to job interviews,” the report says. “And the ripple effect of these policy changes suggests the potential to slow the state’s economy. As jobless workers continue to struggle to find work in a labor market with too few jobs, there will be fewer consumers for goods and services, meaning local businesses have less demand and might lay off their own workers or be unable to sustain new positions.”

Additionally, two changes—lowering the maximum duration of weeks and a new formula that significantly reduces average weekly insurance amounts—fall most heavily on jobless workers in areas of the state’s highest unemployment, and primarily in rural counties.

The report is available online at http://www.ncjustice.org/?q=budget-and-tax/btc-report-whats-harm-plenty.  

FOR MORE INFORMATION, CONTACT:  Alexandra Forter Sirota, BTC director, 919.861.1468; Jeff Shaw, director of communications, 503.551.3615, jeff@ncjustice.org.

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