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Business & Economy
Tue January 7, 2014
North Carolina And The Extended Unemployment Debate
North Carolina lawmakers, business leaders and economists are touting a positive economic outlook for 2014.
Governor Pat McCrory gives a lot of credit for the state’s economic comeback to his administration’s overhaul of unemployment policy.
In Washington, lawmakers continue to debate whether to approve a federal unemployment extension for more than one million jobless workers. It’s an extension many in North Carolina had to do without several months ago.
During a speech in Research Triangle Park, McCrory said he likes what he sees.
"There’s no better state than North Carolina. Right now we are ahead of the trend in economic recovery, when during the last two years we were behind. We were in the lowest of the low," said McCrory.
McCrory addressed a packed Economic Forecast Forum at the Sheraton Imperial yesterday, full of leaders in business, government and non-profits. The program was sponsored by the North Carolina Bankers Association and the Chamber of Commerce. McCrory said he stands behind the very difficult and controversial decisions he had to make in his first year in office, like slashing the number of weeks allowed for unemployment along with the payment amount.
That move made North Carolina ineligible for federal extended unemployment benefits on July 1, 2013.
"We felt like our unemployment benefits were putting NC in continued debt and we needed to tear up the credit card and pay off that debt as quick as possible, so you in business could free up money and start hiring people again," said McCrory.
Even though states don’t have to pay back federal extended benefits, they do have to repay the money they borrow for regular benefits. And North Carolina owes the third highest in the nation, behind New York and California.
Today, North Carolina’s unemployment rate sits at 7.4 percent, the lowest it’s been in five years. And the state is ahead on its debt repayment plan to the feds. In 2012, North Carolina owed the federal government $2.8 billion dollars for money it borrowed to pay regular state unemployment benefits. One-billion dollars of that had been paid by the end of 2013.
But about 70,000 people fell off North Carolina’s unemployment cliff when McCrory's changes triggered the end of the federal extension here.
Bill Rowe is the Director of Advocacy at the North Carolina Justice Center.
“What we’ve heard is people are struggling. They are getting behind in their mortgage payments. Some folks are having to move back in with other relatives," said Rowe.
Rowe says he hopes Washington lawmakers take into consideration the pain that comes with zero benefits.
"Hopefully there’s some compassion that the idea of having people without some resources, without having that safety net to help cushion the people who are out of work right now while we’re trying to build back the economy that people will act on that and Congress will take the steps necessary," said Rowe.
It’s dinnertime at Urban Ministries of Durham. And there are lot of people here who likely need compassion.
Dozens of people go down the line for beef or vegetarian casserole, mixed vegetables, fruit and carrot cake for desert. Ortez and Tammie Morris make it down the line.
Tammie Morris says they’ve eaten and lived at Urban Ministries for several months, ever since they were kicked out of a relative’s home.
"It kind of made me, kind of upset or whatever," said Tammie Morris. "She left a note on the bed and told us we needed to find a place."
Ortez Morris says it was a major blow when his wife was not able to receive extended benefits.
"Very traumatic. Everybody else has been getting unemployment benefits for 99 weeks and stuff. But as soon as we needed unemployment, it got cut off. It didn’t seem proper fair," said Ortez Morris.
Tammie said her hours dwindled away to nothing at Chick-fil-A. Her regular unemployment ended in June. The federal extension disappeared in July. They were knocking on an aunt’s door by August.
Now, Ortez is in a program that allows him to work and get training at the same time. While living at Urban Ministries, he and his wife are in another program that requires they save 65 percent of that money to help get on their feet. Tammie says she’s hopeful 2014 will be better than 2013.
"He ain’t going to let nobody mistreat me you know, wrong or whatever. He got my back and I got his back," said Tammie Ortez.
North Carolina’s jobless rate has consistently dropped over the months, but so has the labor force, which is down by close to 80,000 people over the year.