The number of North Carolinians filing for state unemployment benefits soared as expected last week, another economic effect of the COVID-19 pandemic.

According to a U.S. Labor Department report released Thursday, North Carolina had 93,587 initial claims filed in the week that ended March 21.

There were just 3,533 initial claims in the week that ended March 14.

At the height of the Great Recession, the N.C. Division of Employment Security reviewed and processed as many as 100,000 claims in one month.

From March 16 to 5 p.m. Thursday, the division processed 210,475 claims, of which 88% of applicants said their permanent or temporary loss of job and/or reduction in wages was related to COVID-19’s impact on their employment.

The number of claims for Wednesday alone was 29,018, followed by 14,814 on Thursday.

“There could be more related to COVID-19 where the person filing did not indicate the virus as the reason for separation from employment,” ESC spokesman Larry Parker said.

Among those likely filing claims over the past 10 days are about 500 Lydall Inc. employees temporarily laid off in Yadkin County, more than 200 Gildan Activewear Inc. workers temporarily laid off in Mocksville, and thousands of local leisure, hospitality and retail workers whose employers have shut their doors or dramatically reduced operating hours and how they serve customers.

ESC has a link at for submitting a claim. Commerce said the fastest and most efficient way to apply for unemployment benefits is to visit its website at A customer call center can be reached at (888) 737-0259.

N.C. benefit amounts

Legislators are not scheduled to open the 2020 session until April 28, but there is talk of holding a special session to vote on unemployment-benefit changes.

House Speaker Tim Moore, R-Cleveland, said the state’s $3.9 billion Unemployment Trust Fund “is ready to activate with emergency measures that support families hurting from the economic impact of the COVID-19 response.”

The state House COVID-19 task forces were established to create a smooth pathway for approving legislation related to unemployment insurance and amending current law to gain the fullest possible benefit from North Carolina’s share of $280 billion in federal funding.

The $2 trillion federal stimulus package passed late Wednesday by the U.S. Senate would provide up to $600 in weekly federal benefits for up to four months. That’s on top of state unemployment benefit payments.

The next step is U.S. House approval. President Donald Trump has said he will sign the bill.

This benefit would extend to gig economy and contract and furloughed workers who are still getting health insurance from their employers but are not receiving a paycheck.

However, it does not appear to provide benefits for individuals in a full-time job who have lost income from a second or more jobs.

Since N.C. unemployment law was changed in May 2013 by a Republican supermajority in the legislature, $350 is the maximum amount unemployment beneficiaries can receive, and 12 weeks is the maximum number of weeks they can collect.

North Carolina and Florida have the lowest number of benefit weeks in the country.

However, because state unemployment benefits are on a sliding scale, the number of weeks can rise up to 20 weeks when the state unemployment rate is 9% or higher — which economists say it is highly likely to be exceeded by either the April or May reports.

According to the U.S. Bureau of Labor Statistics, for the fourth quarter of 2019, North Carolina workers received an average weekly unemployment benefit of $277, with an average duration of 8.7 weeks — last in the country.

Less than 10% of jobless workers in N.C. received benefits, also last in the country.

Without legislative changes to the weekly benefit amount, the average unemployment insurance recipient in North Carolina would get about $877 a week for up to four months once the federal benefits begin.

Taking down barriers

On March 17, Gov. Roy Cooper issued an executive order he said would “take down some barriers to unemployment benefits.”

The biggest concern is the financial blow to service-sector businesses, such as bars and restaurants, after being ordered by Cooper to close indoor dining for an indefinite period. Grocery and convenience stores can remain open, but can’t serve sit-down meals.

Many restaurants already had responded by closing or laying off staff as they try to transition to takeout and delivery meals that require fewer employees.

Among the key elements of the order:

  • Waiving the one-week waiting period to receive benefits.
  • Allowing applicants to file for benefits if they are subject to reduced hours.
  • Removing the requirement that recipients have to look for work during the benefits period.

Economists forecast that as many as 2.5 million North Carolinians may be at high- or moderate-risk for a layoff, reduced wages, tips and work hours, or furloughs.

There are an increasing number of retailers closing for several weeks, some pledging to continue paying their employees, while others have not disclosed plans.

Cooper said the executive order also allows waivers of in-person interview requirements for unemployment benefits.

Employers also will not be charged additional state unemployment-benefit taxes for employees who lose their jobs related to COVID-19. Employers pay an employment-insurance payroll tax based on their number of workers, with the rate rising with the level of job cuts.

Analysts say that for North Carolinians seeking unemployment benefits in the near term, finding out how much they can receive and the limitations on number of weeks may come as a rude awakening.

“Many people in North Carolina are about to discover that the changes didn’t reform North Carolina’s unemployment insurance system, but rather, they effectively dismantled it,” said John Quinterno, a principal with South by North Strategies Ltd., a Chapel Hill research company specializing in economic and social policy.

“We are about to run a great social and economic experiment about what happens to our economy, people, and communities when workers lose jobs through no fault of their own on a massive scale for a prolonged period of time.”

The benefit cuts were the main element of a controversial strategy to eliminate a $2.8 billion debt to the U.S. Labor and Treasury departments that helped pay extended jobless benefits during the Great Recession.

N.C. Sen. Wiley Nickel, D-Wake, said, at current benefit rates, the average jobless worker in North Carolina will receive at least $3,000 less than the national average, while the state’s Unemployment Insurance Trust Fund ranks in the top five nationally at $3.9 billion.

“We can afford to increase benefits and need to move quickly,” Nickel said.

“That means changes to provide more money each week, changes to allow jobless workers to receive benefits for a longer period of time and changes to allow more than 12% of unemployed workers to receive benefits.”

During the height of the Great Recession, some individuals received up to 99 weeks of regular and extended state and federal unemployment benefits.

“Of course, people still have to meet the state’s strict eligibility criteria to access unemployment insurance in the first place,” Quinterno said.

Retention tax credits

A provision in the federal stimulus plan provides businesses, primarily large corporations, with a short-term tax credit in exchange for retaining employees on their normal payrolls.

Economists and political analysts are mixed on how attractive the tax credits could be compared with temporarily laying off workers at the risk that some employees may find work elsewhere during the layoff and not return.

“It’s too early to tell how these proposals will play out,” said Mitch Kokai, senior policy analyst for Libertarian think tank John Locke Foundation.

“One suspects that most businesses want to hang on to valued employees as long as they can. But at some point, the government-enforced economic shutdown will force layoffs.”

“Changes to unemployment benefits and retention credits could have some impact at the margins, but business owners’ decisions will be driven mostly by their expectations for the future,” Kokai said.

Kokai said that Democratic legislators’ appeals for a special session to raise the maximum amount of benefit weeks and weekly benefits “ignores the real goal of unemployment insurance — giving workers a temporary cushion in between jobs.”

“There’s nothing wrong with ranking low in the categories (Nickel) cites if it means North Carolinians fare better than most when it comes to moving back into jobs more quickly.

“If North Carolina needs to tweak its system to take advantage of federal changes, the tweaks will get a fair hearing.”

Zagros Madjd-Sadjadi, an economics professor at Winston-Salem State University, said “I think that the retention credit beats the unemployment expansion here.

“There will still be a surge in unemployment, just not as much as would occur if the retention credit were not to be put in place.”

Madjd-Sadjadi said the retention credit “will disproportionately assist skilled and professional workers because they are harder to recruit and train when the economy does eventually come back.”

“Hourly and seasonal workers have already seen layoffs and these will likely continue since businesses may very well see them as interchangeable with anyone else who comes in off the streets looking for work when hiring resumes.”

He advises individuals to place on hold debt-elimination plans.

“To the extent possible, the money that will be coming in the form of stimulus payments should go to your personal emergency fund, while enhanced (unemployment) benefits need to be used to pay only necessary expenses.

“Everything else can wait.”



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