#3

This week I plan to focus on the technicalities of the unemployment benefits legislation that was rejected by the North Carolina General Assembly.  North Carolina stands as the only state in the country to reject benefits for the long-term unemployed, which were offered by the federal government per the federal unemployment insurance program.  The cuts went into effect July 1 of this year, immediately pulling 71,000 North Carolinians off of unemployment welfare (http://www.wral.com/nc-alone-in-choice-to-end-extended-unemployment-checks/12574715/).  The General Assembly hopes to pay off the states debt by 2016 through the revised budget plan, three years earlier than would be expected if we had continued to fund the former unemployment beneficiaries.  This is where North Carolinians must find their moral/political standing.  Should we be removing a key component of our welfare system in order to make up for mismanaged funds by the political elite? It is imperative that the people of our state avoid making assumptions about the unemployed when considering legislation, and instead look to educate themselves about the multitudes of characters who receive unemployment benefits.  It is not acceptable to have one in five citizens of North Carolina impoverished, and to still be rejecting extended benefits from the federal government is antithetical.  It is estimated that nearly 20 million dollars in consumer spending will be lost each week as a result of the new cuts, and this could have a devastating result on the state economy.  Local economies will likely experience the full brunt of the cuts, just three months after their implementation, as consumer spending continues to plummet.  When a state is faced with so much expansive unemployment and poverty, there is going to be a very noticeable negative impact on the economy when welfare is slashed in such a deliberate and immediate manner.  One North Carolina citizen in possession of three different collegiate degrees, Mr. Creighton, put it best: “It does not have to be this way. The safety net has suddenly been pulled from us.”

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4 Responses to #3

  1. This is a very informative and surprising post to me. I was not aware the North Carolina is the only state that rejects benefits for the long-term unemployed. I am glad that your blog is addressing this issue because I feel that not enough people are aware of the wide range of negative impacts our state legislation forces onto the unemployed. I am interested to see the direction that your blog will take in the future regarding the unemployment regulations in North Carolina. I would like to see more personal experiences of how the unemployment legislation has directly affected people. The numbers you present are large, so I would be interested in seeing how exactly specific unemployed North Carolina residents are affected. I am also intrigued by the decision to cut back on Welfare in order to pay our debt. I would like to see more information on how this is supposed to pan out and how the government will justify this cut.

    • dogfunk says:

      I agree that it is astounding that for a state doing so poorly, we could be turning down welfare for our least privileged citizens. It is very interesting to research and understand how our state economy lays such a burden upon the people of the lower and middle class, especially the unemployed. I plan to add personal experience soon, as you have suggested as well. I also plan to look for more individualized data regarding the negative effects of the cuts as well as how the rejection of the cuts could assist in the repayment of the states debt in a more timely manner. It is dire to understand why the government would make such drastic cuts. Thanks for the response!!

  2. mad1hatter says:

    You clearly feel very strongly about the lack of implementation of long-term unemployed benefits, and reasonably so. It surprises me that 1 in 5 North Carolina citizens is impoverished. Is reducing the state’s debt three years earlier really more important than helping those who are unemployed? Three years does not seem that long in terms of the economy. If the North Carolina legislature realizes how many they have just pulled off of welfare for unemployment, should they be taking other measures to help these people like possibly creating more jobs? Obviously in today’s economy, that is not totally possible, but 71,000 people is an astonishing number for unemployed. However, I am a little uneasy about the claim of losing 20 million dollars in consumer spending. If this money in spending is coming from people with unemployment benefits, is it not the government’s own money being cycled back through? I could be wrong about this! I’d really like to understand what exactly the effects of these cuts are going to have on the state and how it affects the unemployed. Good post, it is really thought provoking.

    • dogfunk says:

      I agree, the data makes it evident that an acceleration of three years is not a dire enough need to justify making such drastic cuts to welfare. As for your second question, I believe this legislature thinks they are amending the states problems by forcing people to go get jobs, but the economic downturn that this will cause will eliminate more jobs and cause our already 8.7% unemployment to skyrocket. Lastly, the 20 million in consumer spending that will be lost is not solely government funds. This consumer spending loss is attributed to peoples general lack of spending when they have no income, but most significantly, there will be a massive decline in the number of people that are pulled out of poverty by unemployment insurance. 1.7 million rose above the poverty line in 2012 thanks to the welfare, so these projections at a loss of 20 million in consumer spending look feasible. These people use this welfare to bolster themselves out of poverty and it creates outside cash flow into the economy. In order to increase the flow of cash into the government, you have to invest in the people. Too many of our fellow North Carolinians live in poverty and this is something unemployment insurance has consistently worked towards changing. Thanks for the post!

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