In 2012, North Carolina had an unemployment rate of 9.2 percent – the fifth highest state unemployment rate last year. Yet, just yesterday, North Carolina Governor Pat McCrory signed into law a bill that will dramatically cut unemployment insurance (UI) in the state starting July 1st.

The cuts in the new law are harmful for everyone, but especially for women. In 2012, the unemployment rate was 9.6 percent for women in North Carolina, substantially higher than the rate for men (8.8 percent). Unemployment rates among black men (17.7 percent), black women (13.8 percent), and Hispanic women (11.4 percent) were also much higher than the North Carolina state average. In addition, the law restricts eligibility by, for example, disqualifying workers from benefits if they have to leave a job for health reasons or because of undue family hardship – a change that will particularly impact women.

Starting July 1st:

  • Unemployed workers in North Carolina will no longer have access to federal UI benefits. Currently, long-term unemployed workers in the state can receive up to 47 weeks of federally funded benefits (73 weeks of benefits total), because North Carolina’s unemployment rate is so high – but federal law requires that states maintain their existing UI programs to qualify for the federal benefits.
  • State UI benefits will be cut from 26 weeks to 20 weeks (or as low as 12 weeks of benefits in times of low unemployment).
  • As if cuts to the weeks of benefits weren’t enough, the new law also reduces the dollar amount workers can receive under the program. The maximum weekly benefit will drop by one-third, from $535 to $350 per week.

Once all of these cuts are enacted, it is estimated that 170,000 unemployed North Carolina workers will be denied federal unemployment insurance benefits (PDF). Not only will it be harder for thousands of North Carolina residents to pay rent, feed their families, and meet other basic needs, but North Carolina’s economy could lose hundreds of millions of dollars of economic activity that spending from UI benefits currently provides.

These cuts are a response to the unemployment trust fund debt that piled up because North Carolina repeatedly cut unemployment taxes for businesses between 1992 and 2000. While the new law raises taxes on businesses slightly, workers and their families will bear the brunt of the pain from the cuts. In an attempt to fix their trust fund debt, North Carolina placed the wishes of businesses above the needs of jobless workers. If any states are considering the same – we hope they’ll take note of the injustice in North Carolina and choose a better path forward.

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