Extending unemployment benefits is an important support for families and a boost for North Carolina's economy – and a new study by the NC Budget & Tax Center shows how much the federal program helps each of North Carolina's 100 counties.
Since the start of the Great Recession in December 2007, $10.1 billion in total unemployment insurance payments were made in North Carolina. Research released by the Department of Labor last week found that in this recession for every $1 in unemployment benefits, $2 is generated in economic activity. Regular unemployment benefit payments have generated $20.2 billion in economic activity.
“Absent these payments, the state’s economic challenges would be far greater,” said Alexandra Forter Sirota, director of the NC Budget & Tax Center and author of the report. “Every county in North Carolina sees economic benefits from this vital program.”
These emergency unemployment benefits are an essential boost to local economies, as unemployed workers are likely to spend these dollars immediately and close to home. The modest benefits they provide also help struggling families during a time of great economic hardship.
Sirota's report breaks down the economic impact of unemployment benefits in every North Carolina county. The dollar magnitude of the economic activity impact remains greatest in urban areas like those found in Mecklenburg, Wake and Guilford counties.
However, as a percent of the total wage base of a county, unemployment insurance payments represent higher percentages in more rural counties such as Caswell, McDowell and Stokes counties.
“This shows us that all parts of North Carolina – urban and rural, east and west – need an unemployment benefits extension to provide fuel for economic recovery,” said Sirota.
Nearly 300,000 jobs were lost in North Carolina since December 2007. Job creation over the past six months has averaged just 4,500 new employment opportunities per month. Such lackluster job creation if continued could prolong the return to pre-recession employment levels for another 10 years. Meanwhile, in the face of such significant challenges, more than 60,000 North Carolina workers have dropped out of the labor force.
A failure to extend these benefits will result in 2 million Americans losing benefits in December 2010.