North Carolina’s two Republican U.S. senators have waded into the debate on whether the state should withdraw from accepting the final three months of federal extended unemployment benefits.
Unsurprisingly, Sens. Richard Burr and Thom Tillis are urging Democratic Gov. Roy Cooper to immediately end the $300 weekly benefit, rather than allowing it to continue until the Sept. 6 expiration.
“The employment shortage caused by exorbitant federal unemployment benefits is a real and serious threat to North Carolina’s recovery,” the senators said in a joint statement.
“The governor should immediately end expanded federal unemployment insurance and focus on incentives to encourage more people to return to the workforce, as nearly half of states already have.”
In recent weeks, governors in 22 Republican-controlled states have taken or are considering that step, foremost in Georgia, Iowa, Ohio, South Carolina and Texas.
From the start of the $600 weekly federal benefit in April 2020, there were Republicans in the state legislature and Congress who believed the extra money would keep potential workers out of the job market. Congress allowed the $600 benefit to expire on June 26, 2020.
Sen. Joyce Krawiec, R-Forsyth, has said she believes that extended unemployment benefits “have been a deterrent for returning to work.”
On Friday, Cooper signed Executive Order No. 216, which restores the work-search requirement for all unemployment benefit claims, beginning June 6 .
Cooper also directed N.C. Commerce Department officials “to explore opportunities, consistent with federal law and through the use of certain federal funds, to establish a re-employment incentive program for jobless workers who find and maintain employment."
That appears to be Cooper’s response to Republican changes made to House Bill 128 last week.
The most noteworthy part of HB128 is offering a $1,500 bonus as an incentive to unemployed claimants going back to work before June 1. The bonus would drop to $800 for unemployed claimants returning to work before July 1.
It is likely those deadline dates could change. Half of the bonus would be paid after 30 days of continuous new employment, and the other half after 60 days.
One of the more delicate reopening challenges facing Cooper has been finding a balance between encouraging unemployed North Carolinians back to work while securing a financial lifeline until it happens.
Adding to the complexity in recent months have been calls for assistance from employers struggling to find workers — particularly for minimum- to low-wage jobs — as consumer demand for products and services resurfaces.
“Unemployment benefits have provided a critical lifeline for many North Carolinians living on the edge due to the pandemic,” Cooper said Friday. “As our state emerges from the pandemic, we want to help people safely return to work as soon as possible.
“Reinstating the work search guidelines will help connect claimants with employers, resources and tools to help them return to the workforce.”
Cooper’s executive order apparently didn’t go far enough for Burr and Tillis.
The senators, like Republican colleagues in the state legislatures, shared anecdotal stories of “countless small-, mid-, and large-sized business owners across North Carolina struggling to hire enough workers to reopen this summer.”
“Employers, particularly in hard-hit industries like tourism, service and hospitality, are finding they can’t compete with excessive federal benefits. Time is running out for industries that rely on the summer season for a large portion of their business,” their statement said.
'Ignorance of the math'
On the other side of the political spectrum are Democratic legislators and liberal advocates who say the best potential solution to the perceived worker shortage is to raise the state’s minimum wage from $7.25 an hour to a living wage of between $13 and $15 an hour.
Burr and Tillis say employers have offered higher wages without success. They also charge that even $15 an hour wouldn't be enough to lure back unwilling workers.
“Dismissing these concerns by telling employers to ‘pay more’ demonstrates an ignorance of the math at play,” the senators said.
The senators said an individual currently receiving the maximum $350 weekly regular state benefit and the $300 federal benefit is being paid "up to $650 for a zero-hour work week."
However, the average unemployed or furloughed North Carolinian has been receiving about $235 per week in state benefits for an average nine weeks. The maximum number of regular state benefit weeks currently is 16, which will drop to 13 on July 1.
Most North Carolinians who received regular state unemployment benefits exhausted them between June and October 2020. Those still unemployed or furloughed have to reapply for unemployment benefits for a new benefit year in 2021.
No data to support claims
Burr and Tillis said Cooper’s decision to restart the work-search requirement is welcome, but “that’s merely enforcing existing law. It’s not enough.”
“We won’t have truly recovered from this pandemic, however, until North Carolina’s economy and workers are back in full force,” they said.
North Carolina's unemployment rate dropped from 13.5% a year ago to 5% in April.
The labor force participation rate in North Carolina in March 2021 was 59.5%, down from 61.3% before the pandemic, said Gus Faucher, chief economist with PNC Financial Services Group.
Labor-force analyst John Quinterno said he views claims “that unemployment insurance is too generous and leads people to reject job offers as an ideological, not empirical, one that surfaces during every economic recovery.”
Quinterno is a principal with South by North Strategies Ltd., a Chapel Hill research company specializing in economic and social policy.
Quinterno said it’s clear that “some employers are reporting difficulty in finding workers due to enhanced unemployment insurance benefits.”
“But, there is little data supporting those claims at a widespread level.
“In many cases, an employer has no idea whether a candidate is even receiving unemployment insurance.
“Even with all the recent extensions, only about 37% of unemployed workers in North Carolina received unemployment insurance at the end of 2020.”