Like everywhere else, North Carolina saw a sharp spike in unemployment claims following the Great Recession. By 2013, when Governor McCrory took office, it had long since depleted its unemployment trust fund and was borrowing from the feds to pay benefits. The easy fix would have been to raise unemployment taxes on employers—an additional $21 a year per employee would have filled the hole. But such business tax hikes were anathema to the GOP. Instead, Republicans simply gutted jobless benefits.
The maximum weekly amount went from $535 a week to $350—and most people don’t even get that much—and the maximum number of weeks of eligibility went from 26 to as low as 12. Just like that, North Carolina went from a middle-of-the-road state for the unemployed to one of the harshest. The trust fund got back in the black by 2015—and today has more than $4 billion and counting—but the benefit cuts remained. With the economy growing and unemployment low, however, the issue slipped off the radar.
That’s about to change. The coronavirus pandemic that’s wreaked havoc on Wall Street is about to do the same to Main Street—a downturn is certain; a recession is possible. Businesses will close. People will be laid off. And as they file for unemployment, they might begin to wonder why the state expects them to get by on $300 a week while it’s hoarding $4 billion.
To give you a sense of how stingy North Carolina is, we compared our state to others across a range of statistics: the average time a person is eligible for benefits; the average weekly benefit they receive; the total average benefit a person receives after the first week; the amount of money in the state’s trust fund; the state’s exhaustion rate, or the percentage of claimants who receive benefits for the maximum period allowed; and the unemployment insurance tax rate, or how much the state has employers pay into the trust fund.
The short version: We’re cheap as hell, we don’t pay out for long, we don’t charge employers hardly anything, and almost half of our jobless go max out their eligibility without finding a job. We might want to think about fixing that before the next crash comes—which is, like, now.
Contact editor in chief Jeffrey C. Billman at jbillman@indyweek.com.
Support independent local journalism. Join the INDY Press Club to help us keep fearless watchdog reporting and essential arts and culture coverage viable in the Triangle.
