Coronavirus: Expanding unemployment benefits is good. Now NC must do more.
The COVID-19 pandemic has exposed weaknesses in the state’s health care systems, but it has also revealed how the state’s meager unemployment compensation program is both callous and bad for the economy.
Thousands of workers who face sudden layoffs as a result of business shutdowns and slowdowns related to COVID-19 are about to discover that North Carolina has the nation’s stingiest unemployment benefits. That won’t matter to most of them because North Carolina also has some of the tightest restrictions on who qualifies.
Meanwhile, as a result of its frugal output, the program’s reserve fund is now overflowing with $4 billion, more than double the payments-to-reserves ratio recommended by the U.S. Department of Labor.
On Tuesday, Gov. Roy Cooper removed several restrictions to make it easier for people to qualify for unemployment compensation, and he directed that businesses that lay off employees because of the coronavirus won’t have to help pay for their former employees’ compensation. Cooper also removed the one-week waiting period before payments start and the requirement that recipients show they are actively searching for work. Employees who have not lost their jobs, but have lost hours also may qualify for payments, he said.
State Sen. Wiley Nickel, a Wake County Democrat, said now is the time to do even more to correct the program’s inadequacy with a big dose of generosity and common sense. He is proposing that the Republican-led General Assembly — which made the Draconian changes in 2013 — come back early to increase unemployment compensation payments and further expand eligibility. He said tapping just one-fourth of the reserve fund would help more people and would give a boost to the state economy. He called it “a painless, easy way to pump a billion dollars into the economy for folks who are going to be out of work for a while.”
Republicans say they also are ready to help North Carolinians. Pat Ryan, a spokesman for Senate leader Phil Berger, said: “Senator Berger supports the governor’s announcement today. Several of the items in his order were contemplated in a law passed in 2017, so I think you’d be hard-pressed to find any partisan disagreement with those policies.”
Nickel, a first-term senator and the only Democrat on the eight-member joint legislative Committee on Unemployment Benefits, told the editorial board he quickly learned how Republican lawmakers have regarded unemployment payments not as insurance against an interruption in pay, but an incentive to loaf. When he proposed increasing benefits before the COVID-19 crisis, he said, the Republican committee members “just looked at me like I was a space alien.”
Far from being alien, Nickel’s proposals are the definition of humane. But loosening the rigid limits on dispersing an overflowing unemployment reserve fund isn’t just a matter of compassion; it’s sound economic policy. Unemployment payments — when adequate and broadly available — cushion the economy against a hard landing in a recession. The money goes immediately back into the economy and helps keep small businesses open and bigger businesses from laying off more employees.
Just as important as increasing the amount of money provided is the timing of its release.
“We don’t have two months to sit around and wait,” Nickel said. “The whole point is getting it out there quickly.”
This story was originally published March 17, 2020 at 11:12 AM.