End extra federal benefits for NC’s unemployed workers, Burr and Tillis tell Cooper
North Carolina’s Republican U.S. senators want their state to stop receiving expanded federal unemployment benefits.
Sens. Richard Burr and Thom Tillis, in a statement aimed at Democratic Gov. Roy Cooper, said the federal unemployment insurance on top of state benefits is hurting business owners across the state who are “struggling to hire enough workers to reopen this summer.”
“The employment shortage caused by exorbitant federal unemployment benefits is a real and serious threat to North Carolina’s recovery,” Tillis and Burr wrote. “... The governor should immediately end expanded federal unemployment insurance.”
In an email, a Cooper spokesman expressed skepticism and said he’s already working with business and government leaders to get people back to work, without cutting people’s unemployment benefits.
“North Carolina has among the stingiest and shortest unemployment benefits in the country and many families are dealing with issues such as lack of affordable child care and finding jobs with livable wages,” Cooper spokesman Ford Porter wrote.
Some businesses have reported difficulty hiring employees as they begin to reopen, and Republicans have often cited the enhanced unemployment benefits as part of the reason.
The calls to end state participation in the unemployment program comes amid a similar push in other Republican-led states and with polling showing such a move is extremely popular with Republicans, but less so among Democrats.
Many states, including South Carolina, have said they will stop participating in the $300-per-week federal unemployment insurance program before it is scheduled to expire in September.
National polling from Quinnipiac University shows that across the country, just over half of Americans think that states are right to cut jobless people off from the federal government’s extra $300 in unemployment benefits before September. The 54% who support ending those benefits early includes 89% of Republicans and 32% of Democrats.
But not everyone agrees with the premise that people aren’t working due to unemployment benefits. North Carolina currently has more people looking for work than before the pandemic, wrote Alexandra Sirota, budget and tax director of the left-leaning N.C. Justice Center think tank. So if businesses can’t find workers, she said, it’s not due to a shortage of labor but rather a shortage of jobs offering decent wages.
“North Carolina’s current job openings are predominantly in low-wage work” she wrote last week. “The chorus of employers claiming they can’t find workers are in the industries notorious for low pay and no benefits.”
North Carolina’s unemployment rate dropped to 5% in April, the seventh consecutive month in which the rate fell. The rate was 3.9% in March of 2020 before the coronavirus pandemic led to an economic shutdown — and pushed the rate to 13.5% in April and May 2020.
“We are still far away from reaching our pre-pandemic unemployment level, and it’s not because of a lack of jobs,” Burr and Tillis wrote. “Dismissing these concerns by telling employers to ‘pay more’ demonstrates an ignorance of the math at play.”
North Carolina has some of the country’s lowest state unemployment benefits, after cuts put in place when Tillis was speaker of the North Carolina House. The unemployment system was facing a multi-billion-dollar deficit after the job losses of the Great Recession. Republican lawmakers were able to turn that deficit into a surplus by cutting benefits instead of raising rates on businesses.
Work requirements, signing bonuses
Rejecting unemployment funds in North Carolina would complicate a plan from Republican lawmakers in the state legislature to take that federal unemployment money and turn it into a one-time, $1,500 signing bonus for unemployed people who find a job.
“I believe that, by and large, there’s a strong opinion from the business community that this is a good idea, a good first step,” said state Sen. Chuck Edwards, a Republican from Hendersonville who is behind that plan for the $1,500 signing bonuses.
Burr and Tillis, too, called on Cooper to focus “on incentives to encourage more people to return to the workforce,” though they did not spell out specific proposals. Cooper has ordered the state unemployment office to look into doing just that, The News & Observer reported last week.
On Wednesday, the same day Burr and Tillis called on Cooper to send back the federal funding, their fellow Republicans in the state legislature said they were calling on Congress to back up their signing bonus plan.
Edwards said he had spoken to some of North Carolina’s members of Congress about it. It’s unclear if Burr and Tillis were among them.
Republicans said Wednesday that they are expecting pushback from the Biden administration on that plan and want Congress to step in and help make it happen.
“It’s either paying somebody to not work, or paying them to work,” said Sen. Ted Alexander, a Shelby Republican. “And we need to get our economy going again.”
A Cooper spokeswoman also told The News & Observer last week that he’s open to the signing bonus plan Republicans have put forth in the General Assembly.
In an executive order issued Friday, Cooper reinstated pre-pandemic requirements for people seeking unemployment benefits, to prove they’re looking for work, and instructed the state’s commerce department to look into options like an “incentive program for jobless workers who find and maintain employment.”
Employers worried
Summer is fast approaching, leaving many businesses in the tourism and service industries worried about their ability to ramp up hiring.
Sen. Bob Steinburg of Chowan County, a Republican who represents the Outer Banks, said there was a big jobs fair in his district last weekend but only 10 people showed up. And in the far-western tip of state, said Republican Sen. Kevin Corbin of Macon County, Harrah’s Cherokee Casino Resort is facing hundreds of job openings, despite ramping up what it’s willing to pay people.
Many service industry jobs pay the minimum wage of $7.25 an hour, or $2.13 an hour for tipped jobs like waiters. But Harrah’s is advertising $8.50 an hour for tipped workers and $15 an hour for everyone else — plus signing bonuses of an extra $3,000 for high-need positions like janitors, cooks and cashiers.
Lynn Minges, CEO of the N.C. Restaurant and Lodging Association, said her group supports the taxpayer-funded $1,500 signing bonuses to deal with the worker shortage — which was caused in part, she said, by people losing their jobs early in the pandemic and then finding new jobs instead of waiting around for their old jobs to reopen.
But whatever the cause, it’s having real world effects, she said.
“We have hotels that are turning away reservations because they can’t turn down rooms,” Minges said.
Burr and Tillis wrote that paying more is not feasible for many businesses and not working for others.
“Even if a small business could afford to pay the progressives’ ideal of $15 per hour — and most can’t — it still wouldn’t be enough,” the senators wrote. “A person making $15 an hour earns $600 for a 40-hour work week; expanded federal UI (unemployment insurance) pays up to $650 for a zero-hour work week. It’s no wonder so many have delayed returning to work as long as possible.”
Burr and Tillis voted against the American Rescue Plan — President Joe Biden’s COVID-19 relief package — in March, which extended the $300 federal unemployment insurance program through Sept. 6. The figure was $400 in the House-passed version of the bill, but the Senate lowered it to $300.
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This story was originally published May 26, 2021 at 1:52 PM with the headline "End extra federal benefits for NC’s unemployed workers, Burr and Tillis tell Cooper."
