Under the Dome

Organizations push back against jobless benefits overhaul

Organizations opposed to a bill that would significantly cut unemployment checks for the jobless urged legislators to reconfigure the legislation in light of the harmful effects it would have on people's lives.

The press conference hosted Monday afternoon by several organizations -- the N.C. Justice Center, AFL-CIO, NC MomsRising and AARP -- was held just hours before the state House is slated to consider a Republican-backed measure to overhaul the state's unemployment system. The bill, which was approved last week by the House Finance Committee, hasn't yet been taken up by the Senate.

Robert Riggins, a benefits administrator at the Freightliner plant in Mount Holly, urged legislators to try living on the lower weekly unemployment checks called for in the bill. The legislature is considering cutting the maximum benefits paid to unemployed workers by roughly one third, from $535 a week to $350.

"That bill is devastating to North Carolina families and North Carolina workers," Riggins said. Last week Freightliner's corporate parent, Daimler Trucks North America, announced that it could lay off up to 1,200 workers at its North Carolina plants in Gastonia, Mount Holly and the Rowan County town of Cleveland.

A centerpiece of the conference was a 10-minute video that featured interviews with six North Carolina workers who had to rely on unemployment benefits for an extended period of time when they were laid off from their jobs. They stressed that they barely scraped by on the unemployment checks they had received and that cutting benefit amounts was unfathomable.

"Everything was used for bills," Stacey Hinson, 50, of Denver, N.C., who received $500-a-week unemployment checks for nine months, said in the video. "There was no fun money. Everything was used to survive."

"There are tens of thousands of stories like that all across North Carolina," said Jeff Shaw, spokesman for the N.C. Justice Center.

In addition to cutting maximum benefit amounts, the bill would reduce the maximum weeks of benefits from a 26 to a sliding scale of between 12 and 20 weeks, depending on the unemployment rate. It also would cut off federal emergency benefits for the unemployed that kick in after state benefits expire -- providing a total of up to 73 weeks of unemployment checks -- because a recent federal relief package cuts off the extra benefits to states that don’t maintain their weekly benefit amounts.

The impetus for the bill is the $2.58 billion the state owes the federal government, money it was forced to borrow to cover the first 26 weeks of jobless benefits in recent years because of the state’s high unemployment rate. The state continues to borrow about $25 million a week to cover unemployment benefits.

The debt has triggered higher unemployment taxes for businesses, which have been howling for relief. Their taxes are rising $21 per employee each year until the debt is erased. Individuals don’t pay unemployment taxes; businesses pay both federal and state unemployment taxes.

Bob Friedman, owner of the East Coast Wings and Grill franchise in Cary, said that when he recently received his higher federal unemployment tax notice "it was just a kick in the chops."

"In this economy, every penny is important," Friedman said. "I don't begrudge that we pay unemployment insurance (but) the way it hit us was so surprising."

Cutting benefits would accelerate repayment of the debt by reducing the amount of future payouts. At the same time, it would slightly increase employers’ state unemployment taxes and require state and local government employers -- which currently don’t pay state unemployment taxes but reimburse the state for benefits collected by their laid-off workers -- to contribute to the state unemployment trust fund.

Some Republicans and business leaders have argued that the state's unemployment benefits -- which are more generous than surrounding states but in line with the nation as a whole -- deter people from seeking work.

But Beth Messersmith, the state campaign director for N.C. MomsRising, an advocacy group for children and families, said there just aren't enough jobs to go around.
"There are three unemployed workers for every job opening" in North Carolina, she said.

Staff writer David Ranii

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