‘Unemployment Cliff’ Starts July 1, 500 of 70,000 Long-term Jobless in NC Affected Reside in High Country

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By Jesse Wood

June 26, 2013. In less than a week, extended federal unemployment benefits will run out for more than 70,000 North Carolinians, including approximately 500 High Country residents.

According to Larry Parker, public information officer for the N.C. Department of Commerce, extended benefits for those on unemployment longer than six months will cease for approximately 175 residents of Watauga County; 85 residents of Avery County; and 240 residents of Ashe County.

Parker said those numbers were based on the week ending June 15 and have likely shifted because “people find work, exhaust the program or come into the program.”

North Carolina currently has the fifth highest unemployment rate in the nation, according to figures from the U.S. Department of Labor.

Due to the overhaul in the unemployment system in the state’s legislature, North Carolina will become the only state to lose the Federal Emergency Unemployment Compensation Program (EUC), which is 100-percent funded. The state becomes ineligible for those federal funds because it lowered the maximum weekly benefit, among other changes to the current system, to $350.

Earlier this year, Gov. Pat McCrory told the Tobacco Growers Association of North Carolina that he was going to make the end of extended unemployment benefits a priority.

“We can no longer afford to do that in North Carolina. We are changing our policy now, and that will be one of the first bills I sign,” McCrory said. “I refuse to let us continue to live off of a credit card. We’re going to pay off the credit card. We’re going to change the rules and policies.”

At the time of the passage of House Bill 4, lawmakers stated that these measures would allow the state to repay the federal government $2.5 billion borrowed during the peak of the Great Recession for unemployment benefits.

Bill Rowe of the NC Justice Center, an advocacy group which has not supported these changes, said that federal emergency extension of benefits is already drawing to an end for states at the end of the year. The four-tier EUC program was signed into law in the summer 2008 and ends in most states on Dec. 28, 2013. 

“By prematurely making these changes to the state system now, North Carolina is rejecting $600 million to $700 million dollars in federal money over the next six-months that would be pumped directly into local communities,” Rowe said in a release.

And just yesterday, more than 20 advocacy groups and nonprofits sent a letter to McCrory and other lawmakers urging for a provision that extends the July 1 deadline to January 1, 2014, to prevent those affected from “being pushed over the unemployment cliff on July 1.”

Parker with the N.C. Department of Commerce said that in addition to the approximately 500 folks in Avery, Ashe and Watauga counties currently receiving extended benefits, another 550 locals or so are receiving regular unemployment benefits.

Locally, approximately 190 Watauga County residents; 85 Avery County residents; and 285 Ashe County residents are receiving regular unemployment benefits. While the new provisions also require a lowering of weekly maximum benefit, the new law only affects unemployment benefit claims filed after June 30, 2013.

Also, while only approximately 550 people are receiving unemployment benefits in the three counties cited above, many more are unemployed but not receiving benefits. According to the most recent N.C. Civilian Labor Force Estimates released by the N.C. Department of Commerce’s Labor and Economic Analysis Division, more than 4,000 people in Ashe, Avery and Watauga counties are unemployed – as of April 2013 figures. 

Nearly 1,900 people in Watauga are out of work. In Ashe that figure is nearly 1,300, and in Avery, more than 800 are currently out of work. 

For more information on many of the changes to the unemployment system, click here

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