Requiring work searches isn’t the urgent fix that unemployment insurance needs

Last week, the Finance Committee of the North Carolina House approved a bill that would require jobless workers who claim unemployment insurance to conduct at least three work searches each week, if they are seeking benefits for a non-COVID-19-related reason.

This week, Gov. Cooper signed an executive order that will implement a work search requirement for all those claiming state unemployment insurance after March 14.

Neither of these actions will fix the real problem with unemployment insurance that threatens to derail our labor market: the fact that our state provides the lowest levels of support to jobless workers who have lost their job through no fault of their own.

The work search requirement is a punitive measure that adds obstacles to critical income supports that keep people connected to the labor market and looking for a new job. It is not a guaranteed bridge to employment for those who have lost their job through no fault of their own. Indeed, research shows that, while such a requirement may generate the intended effect of reducing the benefits paid out in the short term, the long-run outcomes are largely sub-optimal: People are less likely to move to good job matches and more likely to take on lower paying jobs.

A work search requirement also adds administrative costs as staff and technology must be employed to monitor implementation and the verification of claimant activity. These processes are even more complicated and costly during a pandemic when people can’t go back to work because of public health measures or because workplaces are not safe to return to.

The difficulty of separating COVID-19 and non-COVID-19 claims on top of shifting federal requirements is also likely to lead to further processing delays in a program that has struggled mightily ever since state funding was cut for the Division of Employment Security in 2013. Additional administrative rules could further disrupt the critical work of making sure eligible jobless workers receive wage replacement.

Several other factors in the current difficult environment make clear that a work search requirement isn’t the right focus of policymakers at this time, including:

1. Job losses have been uneven — as they were in the last recession, as well — meaning that some communities don’t have the same number of job openings as others and that a recovery of jobs lost is far from complete. Many people looking for work in some areas of the state could quickly exhaust application opportunities as there are too few job openings for those looking for work. Moreover, job losses continue at elevated levels as the pandemic continues to wreak economic havoc in several regions and job sectors.
2. Not all workplaces are safe; many workplaces are not providing the necessary protections for workers, so requiring people to search for and then be ready and able to work given the public health threat of the pandemic is bad policy.
3. Many North Carolina households lack access to the high-speed internet needed to conduct work searches right now, either because they can’t afford it or because the necessary infrastructure in their community doesn’t exist. In different times, a trip to the public library may provide a connection to the internet and job search, but many public connections points remain closed.

States that want to ensure that work search requirements actually get people connected to good jobs must do more than simply set an arbitrary number of required work searches each week. They must assure that unemployed people have access to high-speed internet and assistance in conducting job searches from trained professionals. They must also commit to connecting the unemployed to adequately-funded job training programs and provide exemptions from the search requirement while people are engaged in job training, working part-time or temporarily laid off.

In short, the evidence in support of work search requirements as a tool to achieve a just recovery is weak. There is, however, a significant body of research to show that unemployment insurance that provides adequate wage replacement for 26 weeks supports stronger employment outcomes, alleviates negative health outcomes, and supports improved well-being over time. Right now, North Carolina’s unemployment insurance provides too few jobless workers with too little in wage replacement for too short a time.

We don’t have to aim high; even aiming to get to the middle of the national pack would be much better for the people struggling in every community in the state. An unemployment insurance program that is adequate and equitable would be much better for us all by stabilizing the economy and starting us on the path toward a more just recovery.

Alexandra Sirota is the Director of the Budget & Tax Center, a project of the NC Justice Center.