Employers Only
News Column
Story Tools
Delicious Delicious

Relief for Unemployment Recipients?

Jan. 1, 2013

Richard Craver


More than 15,300 local (Winston Salem, N.C.) residents entered the new year with a sigh of relief after President Obama and Congress reached a deal to avoid the fiscal cliff late Monday night.

The federal benefits expired Saturday. Congress typically has made extensions retroactive to when they ended.

"There are currently no payable weeks left," said Larry Parker, the division's acting public information director. "We will await guidance from U.S. Labor Department should something pass."

The deal agreed to would extend federal jobless benefits through 2013, although it's not clear yet whether the compromise requires yet another shaving of weeks within the current four-tier system.

For example, the deal reached in February 2012 to extend federal benefits for the long-term unemployed cut the maximum weeks of state and federal benefits from 99 to 73 for the states with the worst job markets, such as North Carolina. Recipients in other states exhaust their benefits at 63 weeks.

Currently, the first two federal tiers provide 14 weeks of benefits each, the third tier nine weeks, and the fourth tier 10 weeks.

"So far, every extension has been accompanied by a tightening of benefit amounts," said John Quinterno, a principal with South by North Strategies Ltd., a Chapel Hill research firm specializing in economic and social policy.

According to the N.C. Division of Employment Security, there were 15,346 residents in the Triad and Northwest North Carolina -- including 3,005 in Forsyth County -- and 87,004 statewide in the federal tier categories as of Dec. 18.

The extension of federal benefits also is pivotal to nearly 18,000 Triad and Northwest N.C. residents, and 107,296 statewide, who currently are receiving up to 26 weeks of state unemployment benefits. The average state benefits are $290 a week.

Extending the federal jobless benefits is crucial since more than half of unemployed North Carolinians have been out of work for more than 26 weeks, said Alexandra Sirota, director of the Budget and Tax Center, a project of the N.C. Justice Center.

Since the financial and housing crisis began in late 2007, extended federal benefits have become a major political issue, including for some Republicans who proposed drug testing and high-school equivalency diplomas to qualify.

Each time, the program was saved from expiration by last-minute compromises in Congress.

A recent study by the left-learning Economic Policy Institute said nationally there are 3.4 unemployed workers for every job opening. "In other words, in a given month in today's labor market, the vast majority of the unemployed are not going to find a job no matter what they do," the institute said.

However, some Republicans in Congress and the N.C. General Assembly say that cutting off or reducing unemployment benefits may be the motivation required to get those dropouts back in the job market.

On Dec. 5, a group of Republican state legislators unveiled a plan to pay off a nearly $2.51 billion unemployment benefit debt by slightly raising business taxes, cutting the maximum payment to future jobless workers by a third and reducing the benefit period.

The maximum weekly benefit for workers would fall from the current $525 to $350, while the maximum number of weeks a jobless claimant could receive state benefits would drop from 26 weeks to 20 in periods of the highest unemployment. If the bill is passed, benefit changes would apply starting July 1 to the future unemployed.

"We need to bring our benefits in line with those of competing states and end the current disincentive for recipients to take jobs they might not prefer but that would get them working again," said John Hood, president of the John Locke Foundation, a libertarian policy research group.

Quinterno said it is possible the extension of federal benefits might delay the timing of any reductions in state-funded benefits.

"At one time, there was a provision that states that accepted emergency benefits could not make changes to basic benefit structures as a condition of participation," Quinterno said.

Although Parker confirmed Quinterno's facts about a "non-reduction role" with previous federal extensions, he said the state agency "cannot speculate on whether or not a possible extension would delay the timing of any reductions in state-funded benefits."

"We have been in contact with U.S. Labor Department officials today and understand they will issue guidance to states if any action is taken to extend" federal unemployment benefits.


Distributed by MCT Information Services

Source: (c) 2013 Winston-Salem Journal (Winston Salem, N.C.)

Top Stories