Falling unemployment hurts some

Apr. 17, 2014 @ 01:15 AM

This editorial appeared in the News & Record, Greensboro

A falling unemployment rate might produce bad news for North Carolina residents who still can't find work.

Changes in state law link benefits to the jobless rate. As it drops, payments run out sooner.

It has fallen fast. North Carolina's unemployment rate dropped to 6.4 percent in February, down from 8.6 percent a year earlier.

Legislation that takes effect in July allows benefits for 14 weeks when the average jobless rate over three months is between 6 percent and 6.5 percent. The scale tops out at 20 weeks when the rate exceeds 9 percent.

This policy assumes that jobs are more plentiful when the unemployment rate drops. But even the 6.4 percent rate left nearly 300,000 North Carolina residents on the unemployment rolls in February, according to the N.C. Department of Commerce. And, the number of people employed increased only by 48,000 over a year earlier. At that rate of employment growth, it would take six years — not 14 weeks — for everyone to find a job.

The lower unemployment rate is caused not so much by greater employment but by so many people leaving the workforce who are no longer counted as unemployed. A Bureau of Labor Statistics survey indicates there are three job-seekers for every job opening in the Southeastern U.S.

Furthermore, unemployment rates of 10 percent or greater lingered in eight North Carolina counties in February.

People whose benefits have run out might see some hope in Washington, where the U.S. Senate last week passed a bill to restore extended federal benefits. These were terminated last July in North Carolina and in January in other states. North Carolina was penalized for cutting its own benefits, but Gov. Pat McCrory and the legislature think losing them forced unemployed workers to take jobs that apparently had been waiting for them to fill.

Sen. Kay Hagan added an amendment to the federal bill to remove the North Carolina penalty, but the U.S. House also has to approve the measure and McCrory would have to agree to accept the assistance. The House should act soon, and the governor should reverse his own ill-considered position.

No one who can work deserves an unemployment check forever, but a paycheck requires a job. Government doesn't slip off the hook by cutting off jobless benefits, anyway. That just means more people qualify for food stamps, Medicaid and other assistance. Children receive free lunches at school. And so on.

North Carolina cut benefits so it could more quickly repay federal funds it borrowed to provide unemployment benefits during the worst of the recession. Unfortunately, the worst isn't over for everyone. Now that the unemployment rolls have decreased, however, the state can better afford to extend benefits a few more weeks for those who really need them. The legislature should adjust its restrictive new formula so that a falling unemployment rate helps everyone rather than hurting some.