GOP lawmakers slashed NC’s unemployment compensation. Are they proud now?

Gene Nichol
·3 min read

Are Republicans Still Bragging About Making the NC Unemployment Compensation Program Worst in U.S.?

The U.S. Labor Department just released data indicating the number of Americans filing for unemployment benefits climbed to a record-breaking 6.648 million for the week ending March 28. “The deterioration of the labor market in the last two weeks defies belief,” one expert wrote. The pace of job loss far exceeds the Great Recession. The market “is in historic free fall.”

In North Carolina, more than half a million people have filed for unemployment benefits since mid-March. Last week a national study concluded “NC has the second biggest increase in unemployment due to coronavirus.” Only Louisiana’s been hit harder. Still, our lawmakers have chosen not to convene early to address the crisis. I wonder if they’re still boasting about crushing our compensation scheme?

Gov. Pat McCrory and legislative leaders participate in a ceremonial cutting-up of a federal government credit card May 5, 2015, to announce the state had repaid its debt for unemployment insurance acquired during the 2008 financial crisis. A sharp reduction in jobless benefits accelerated the repayment.
Gov. Pat McCrory and legislative leaders participate in a ceremonial cutting-up of a federal government credit card May 5, 2015, to announce the state had repaid its debt for unemployment insurance acquired during the 2008 financial crisis. A sharp reduction in jobless benefits accelerated the repayment.

One of the first bills passed by the General Assembly in 2013, marking the Republican ascendancy, was H.B 4. It launched the steepest cut to a state unemployment compensation program in American history. Rep. Julia Howard, architect of the reductions, said our old approach had grown too rich, “becoming a welfare” scheme. Labor scholars called the changes “a radical reduction in benefits for people unemployed through no fault of their own.” Still, Sen. Phil Berger and then-Speaker of the House Thom Tillis pronounced themselves well satisfied. Moving from the middle of the pack to stingiest on record – that’s a message you can take on the road.

As a result of H.B.4, by 2019, only 8.6% of NC jobless workers were receiving unemployment compensation – placing us 51st in the nation (when DC and Puerto Rico are included). Our average duration of benefits, 8.6 weeks, had sunk to the country’s lowest. We now provide (on average) just $264 a week, again near the bottom, replacing just 32 cents of every dollar of lost income.

Our cuts were so extreme we forfeited hundreds of millions in federal dollars. We were the only state to give Washington back its money rather than allow it to go to poor residents. And to make sure everyone got the point, Republican lawmakers also dramatically cut the state’s corporate income tax rate. They proclaimed, with gusto, that they knew where their bread was buttered. Then they cut the corporate rate again.

In 2018, Wayne Vroman of the Urban Institute, who had conducted a study of our unemployment system, testified before the General Assembly’s Joint Legislative Oversight Committee. Vroman explained that our worst to be found program – smallest payments, shortest times, fewest people – fiercely underserves the state’s workers. Legislators beamed. Rep. Dana Bumgardner, a Gaston County Republican, replied,in full snark: “I think where we are is a good thing. What is the point of your presentation?”

Republican leaders now suggest they’re perhaps willing to mend their ways. Governor Cooper has taken emergency steps to make it easier to qualify for benefits. Sen. Berger’s spokesman says there’s “no partisan disagreement” with Cooper’s moves. Julia Howard indicates “the quicker we can (make changes) the better.” No word on whether Bumgardner still thinks “where we are” (last place) is “a good thing.”

But our Republicans also seem to enjoy the cellar. We’re the only state ever to abolish its earned income tax credit – raising the tax bill of impoverished families. We’re apparently willing to be the last state standing against Medicaid expansion. “Send our money to other states, we don’t care. It’s better than letting poor people have free health care.” Stepping on the necks of low income folks may be all our Republican lawmakers know how to do.

Contributing columnist Gene Nichol is a law professor at the University of North Carolina at Chapel Hill. He is the author of the newly released book “Indecent Assembly: The North Carolina Legislature’s Blueprint for the War on Democracy and Equality” (Blair, 2020)