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Cut to Unemployment Benefits Looms

March 4, 2013

Kim Gilliland, News-Topic, Lenoir, N.C.

If you are unemployed, your weekly unemployment insurance benefits
could be cut by up to one-third beginning July 1, thanks to a bill signed into
law last week.

The bill, designed in part to help pay back $2.5 billion owed by the
state of North Carolina to the federal government for jobless benefits paid
since the Great Recession, was signed into law Feb. 19 by Gov. Pat McCrory.
The law also reduces the maximum number of weeks anyone can receive benefits
from 26 to as few as 12, based on factors such as the state unemployment rate.

James Rackley, who has been unemployed since October 2012, bristles at
the new legislation. He feels the law hurts displaced workers already
suffering from a sour local economy.

"I would ask Gov. McCrory to go outside Raleigh and quit looking at the
numbers he's being fed," Rackley said. "If he opened his eyes and saw how
drastic the problem is here in Western North Carolina, he wouldn't have passed
the bill. He should have been more informed."

Rackley's job woes began way back in 2003, when he was laid off from
Broyhill Furniture. He worked odd jobs for the next three years and says he
was finally able to go back to school and graduate from Caldwell Community
College and Technical Institute with an associate's degree in 2008. He also
earned career-readiness certification from the college. He started his own
company, Computechs of Caldwell County, but, in his words, "business bottomed
out." Through a temporary staffing service he found work at Lowe's Home
Improvement, where he worked in IT until last April. He worked for a short
while at the Biz Center, a sweepstakes parlor on Morganton Boulevard, but
decided to try and restart his IT company, with no success. Now divorced and
on his own, he again signed up for unemployment insurance benefits.

Rackley is nearing the 26-week window on benefits before filing for an
extension. He subsists on $250 per week; he pays $300 a monthfor his car
payment, along with another $100 for insurance. And there's still the cost of
gas and food. If not for his custodianship of his grandfather's estate, his
bills would surely outstrip his ability to pay.

"I have already had to get help from my parents," Rackley said.

The N.C. Justice Center says about 80,000 unemployed workers in North
Carolina will lose the federally-funded extension of unemployment benefits on
July 1. Only one state currently has a sliding scale for benefits that begins
as a low as 12 weeks, the Justice Center says. George Wentworth of the
National Employment Law Project says the changes would take North Carolina's
unemployment compensation program from one that's roughly average compared to
other states to a program that would be near the bottom in how workers are

Chris Fitzsimon, the executive director of N.C. Policy Watch, wrote on
his organization's website: "That's not shared sacrifice, that's Robin Hood in
reverse, the well-connected corporate interests using the lingering effects of
the Great Recession as an excuse to overhaul the unemployment system they
never liked much in the first place, a program that was designed to help both
families and the state's economy weather a crisis."

According to Mitch Kokai, political analyst for the John Locke
Foundation, a conservative think tank, the new law is a needed step for North
Carolina's fiscal health.

"The unemployment insurance system in this state has fallen way behind in
terms of the amount of money owed to the federal government to pay for
unemployment benefits generated during the Great Recession," Kokai said. "If
lawmakers had done nothing, the ($2.5 billion) debt would have been paid
through tax increases on businesses, which already pay unemployment insurance
taxes. The state would be adding a surcharge per worker, per business, until
it reaches a cap. This would take five to six years to accomplish."

The law still leads to tax increases for businesses, just not as much as
it would without the benefit cuts, Kokai added.

Kokai has mixed feelings about the state of economic recovery.

"Signs point to at least slow growth. Some say we are dipping back into a
recession," he said.

Rackley's own economy is just as uncertain.

"I want a career, not a state check," he said. "I hate being on
unemployment, but until something is done to even the playing field, I have no

Source: (c)2013 News-Topic (Lenoir, N.C.) Distributed by MCT Information Services

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