State cuts max unemployment benefit

by Daniel Bowden
Wednesday, February 13, 2013

Staff photo by Dan Bowden 

Members of ActionNC challenge state lawmakers to live on $350 a week during a press conference in downtown Wilmington on Thursday, Feb. 7.

On July 1, maximum weekly state unemployment benefits will drop from $535 to $350. House Bill 4 passed on Feb. 12, enacting the $185 transition.

Last week, members of the political action group ActionNC held a press conference on the Cape Fear Riverwalk in downtown Wilmington to challenge state lawmakers, specifically Gov. Pat McRory, Rep. Julia Howard and Sen. Phil Berger, to live off of $350 for one week.

Kevin Rogers, policy director for ActionNC, pointed out that North Carolina’s newly elected governor gave his cabinet members raises “so they could afford to live.”

“Governor, if your cabinet can’t live on $120,000 a year, how the heck are the rest of us going to live on $15,000 a year?” Rogers said during the Feb. 7 rally. “Show us that you are a governor of the people.”

The maximum weekly state unemployment benefit amount, $535, was awarded to people who were earning between $50,000 and $60,000 per year before losing their jobs. 

“In my years of public life, I’ve never seen a law that is this harsh and draconic to working people,” said Harry Payne, senior counsel for law with the North Carolina Justice Center, who was also in attendance on Feb. 7. “No other state in the country has cut their benefits by that much.”

In a telephone interview on Feb. 11, Rep. Julia Howard, one of the primary sponsors of House Bill 4, said current maximum unemployment benefits were “more than a starting teacher makes in North Carolina.”

“The current rates hurt businesses,” Howard said. “They can’t afford it.” 

House Bill 4 was proposed by the North Carolina General Assembly to pay off $2.5 billion in debt to the federal government for emergency unemployment benefits the state has received in the past. With current unemployment benefits, that debt will not be paid off until 2019. House Bill 4 aims to have it paid off by 2014. 

Howard went on to say that North Carolina has the highest unemployment benefits in the South, and businesses pay for unemployment benefits through the state unemployment insurance tax. Howard said she believes the bill will save businesses money by paying off the debt faster. 

“There’s no securing interest rates with the federal government,” Howard said. “If we don’t do something, we stay in a rut.”

Howard represents the counties of Davie and Forsyth. Other than Howard, primary sponsors of the bill include Rep. Harry Warren, Rowan County; Rep. Edgar Starnes, Caldwell County; and Rep. Mitchell Setzer, Catawba County.

In regard to ActionNC’s challenge to live off of $350 per week, Howard said that “most legislators, if they don’t have another job, probably aren’t living off of much more than that.”

The new maximum weekly state unemployment benefit of $350 was chosen by averaging the maximum benefits of other southern states. In addition to cutting the maximum benefits, House Bill 4 reduced the amount of time they could be received and amended criteria regarding who can receive unemployment.

“If you look at the bill as a whole, it’s a good thing,” Howard said, “During the process of drafting this bill, we found that 131 people at Central Prison were drawing unemployment benefits. Unfortunately, people just want to zero in on those cuts.”

In the end, the Senate decided to rule in favor of the bill, passing it on Feb. 12. The changes will go into effect on July 1 this year.


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