Editorial

Wrong target

An unemployment system overhaul would seriously hurt those getting benefits.

December 6, 2012 

If you are among those who have lost jobs in the Great Recession, from which North Carolina has yet to recover, and you see Republican reformers on the sidewalk: Duck. You are in the bull's-eye.

GOP legislators, in a draft bill, are dutifully on the leash of the N.C. Chamber, a pro-business, anti-labor lobbying group that wields considerable influence with Republicans now in charge on Jones Street. Doubtless the group has the attention as well of Pat McCrory, Republican governor-elect.

The Chamber has a plan to pay off North Carolina’s $2.48 billion debt to the federal government for money borrowed to pay unemployment benefits when the state came up short on its obligations. There are 18 other states paddling the same boat, but North Carolina’s debt is the third largest. Until the debt is paid, the federal government is requiring employers here to pay $21 more per worker, each year.

Businesses, and speaking for them, the N.C. Chamber, don’t want that payment. So toward the goal of paying the debt off quickly, the Chamber, and now some Republican lawmakers, propose to cut unemployment benefits to those out of work: The maximum benefit would go from $506 weekly to $350.

Another cut

And just to add to the burden of joblessness a little more, the maximum number of weeks for benefits, 26, would be cut on a sliding scale to between 12 and 20 weeks. If the state’s unemployment rate remained high, the larger figure would apply. If the rate dropped, the number of weeks would be reduced.

The Chamber’s idea also has nonprofits and local governments contributing to the state unemployment trust fund (now they don’t, although they must reimburse the full cost of benefits to workers who are laid off). And employers who currently aren’t required to pay state unemployment taxes would have to pay a relatively tiny sum on wages up to about $21,000.

Republicans call this sharing the pain of handling the debt to the federal government. Sorry, but there’s not much sharing going on. People on unemployment, most of whom would desperately like to find work, struggle to barely get by on an average weekly sum of $291 ($506 being the maximum, not the average). Even those getting $506, which represents a fraction of what people were earning, have a hard time. And now Republicans want to cut that drastically?

Who will be hurt

If the state just went along with the annual boost in the federal requirement, the debt would get paid. Yes, employers would pay more and retiring the debt would take longer. But it’s not as if the federal government is going to foreclose on North Carolina.

And let’s not forget that one reason the state ran short of money was because employers enjoyed several cuts in their unemployment taxes during the fat times of the 1990s. As it turns out, cutting those taxes (when Democrats were in charge, by the way) without an automatic increase if joblessness went up wasn’t a good idea, and now the federal piper must be paid.

This is about Republicans trying to take care of business, literally, and doing so on the backs of average people who are in trouble already. And contrary to what some in the GOP ranks may think, most of those receiving unemployment are not deadbeats goofing off until the benefits run out. That’s a harsh and unfair stereotype of people receiving a benefit that is hardly big money.

This idea is aimed at the wrong target, at the wrong time, and certainly in the wrong place.

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