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January 22, 2014

NC back on the NYT front page: Parsing the effects of cuts to unemployment benefits

North Carolina is back on the front page of The New York Times, this time for its cuts to unemployment benefits. Despite a drop in unemployment, nearly 350,000 North Carolinians are listed as officially unemployed.

And ... North Carolina is back on the front page of The New York Times, this time for its cuts to unemployment benefits.

Excerpts:

Last July, North Carolina sharply cut its unemployment program, reducing the maximum number of weeks of benefits to 20 from 73 and reducing the maximum weekly benefit as well.

The rest of the country is now following North Carolina’s lead. A federal program supplying extra weeks of benefits to the long-term unemployed expired at the end of 2013, and congressional Democrats failed in an effort to revive it. About 1.3 million jobless workers received their last payment on Dec. 28. Starting on Jan. 1, the maximum period of unemployment payments dropped to 26 weeks in most states, down from as much as 73 weeks.

With that move, the country’s safety net for jobless workers has undergone a sudden transformation, from one aimed at providing modest but sustained protection to workers weathering a tough labor market to one intended to give relatively short-term aid before spurring workers to accept a job, any job.

It is still early, but the results in North Carolina suggest that there are both gains and losses from cutting back on support for the jobless. The state’s unemployment rate has plummeted to 7.4 percent from 8.8 percent, the sharpest drop in the country. In part, that is because more jobless workers are connecting with work. But an even greater number of workers have simply given up on finding a job.

.....

But statistics don’t tell the full story. North Carolina still has nearly 350,000 listed as officially unemployed, and many more, including those living in depressed rural areas, have given up even looking for a job. For them, the safety net is gone, and largely out of sight, countless families have slipped deeper into poverty.

Read the rest here.

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