The NC proposal for signing bonuses comes with provisions making the unemployment system “even more miserly,” an analyst says

By: - June 1, 2021 7:45 pm
Sen. Chuck Edwards

A plan to lure unemployed people back to work with signing bonuses  passed the state Senate on Tuesday in a 35-10 vote.

Under the bill, unemployed people who accept jobs within 30 days after the bill becomes law would get $1,500 signing bonuses. Unemployed people starting new jobs between 30 and 60 days would get $800.

The bonuses would help employers find workers and help employees change the habits they developed during pandemic unemployment, said Sen. Chuck Edwards, a Henderson County Republican.

“Humans are a creature of habit, and we’ve created a habit now for 14 months that many folks can simply just get by, and it’s easier to not work than it is to work,” Edwards said at a news conference Tuesday afternoon.  “I know that a lot of folks are going to look at this bill and see it as something that is sought to just help employers. And while it is important to help our employers and get our economy back on track for all of our sake, I believe there’s a lot in here for someone who is unemployed and that is to change a habit.”

The state’s seasonally adjusted unemployment rate has been declining since May 2020, when it was 13.5%, according to the state Department of Commerce. The state’s April unemployment rate stood at 5%. In February 2020, before pandemic-related business shutdowns, the state’s unemployment rate was 3.6%.

Though the bill passed with bipartisan support, it faces more hurdles. The bonuses would be paid with money from the federal pandemic unemployment fund, which does not allow the money to be used for  bonuses. The bill would require the state to seek permission from the US Department of Labor to use the money for bonuses.

The Senate blocked one proposed amendment that would have raised the state minimum wage to $15 an hour, and another that would have increased state weekly benefits to a maximum of $500 from $350 when federal benefits end in September, and allow unemployed people to receive benefits for up to 26 weeks.  Under current law, state benefits last from 12 weeks to 20 weeks, depending on the unemployment rate.

“A false narrative is being pushed, that North Carolinians are lazy and don’t want to work,” said Sen. Wiley Nickel, the Cary Democrat who sponsored the amendment to increase benefits.

The state slashed unemployment benefits in 2013 to pay back money the state owed the federal government.

North Carolina now has $2.7 billion in its unemployment trust fund, Nickel said, plenty of money to help both workers and employers.

Nickel proposed giving employers a 12-month break from unemployment tax payments.

After tabling the two amendments, the Senate approve the bill with bipartisan support and sent it to the House.

The bill goes beyond bonuses to make permanent changes to the unemployment system that will make it harder for people to qualify for benefits, said John Quinterno of South by North Strategies, an economic and social policy research firm in Chapel Hill.

“You’re creating permanent changes to our state system, making it more punitive and even more miserly than it currently is,” he said.

Under the bill, unemployed people would have to respond to an interview request within 48 hours and schedule an interview within seven days if the employer asks. Job seekers must maintain records of interview requests and responses.

A reemployment activity sponsored by a job center would no longer count as one of the three weekly contacts a job seeker must make in order to qualify for benefits.

A state would have to conduct an audit, using an outside firm if necessary.

The new provisions could disqualify more people from receiving unemployment benefits and would force people into low-wage work, Quinterno said.

“In a way, this is the government intervening to stop market forces from working,” he said. “It’s just that we love markets except when it’s a labor market that might generate higher wages for people. It’s part and parcel in the war on unemployment insurance we’ve been waging in North Carolina for closing in on 10 years now.”

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Lynn Bonner
Lynn Bonner

Investigative Reporter Lynn Bonner covers the state legislature and politics, as well as elections, the state budget, public and mental health, safety net programs and issues of racial equality.