DUE to national recession and the ongoing anemic recovery, Democrats have advocated for constant extension of unemployment benefits. At one point, beneficiaries could be on unemployment for up to 99 weeks. Many Republicans argue that extended benefits can discourage recipients from actually getting a job. The experience of North Carolina suggests those critics have a point.
In North Carolina, state lawmakers reduced unemployment benefits by more than 30 percent and implemented work requirements. Those changes meant North Carolina didn't qualify for extended federal unemployment benefits, so the state lost that federal funding in July, six months earlier than most states.
The Wall Street Journal's Damian Paletta recently reported on the results: “The Tar Heel State's unemployment rate since then has plunged, as people who were receiving benefits scrambled to find jobs or stopped looking for work. Employers report a flood of applicants.”
Unemployment in North Carolina has declined from 9.5 percent to 6.9 percent. It appears a significant number of people previously chose taxpayer benefits over a paycheck, but are now actively job hunting. Paletta notes, “Many of the long-term unemployed have taken jobs for which they appear to be overqualified, based on experience or education, and some are piecing together multiple part-time jobs to fill the benefits gap.”
Obviously, that's not ideal for those formerly unemployed workers. But is it ideal for those same individuals to depend upon other taxpayers for support, when many of those taxpayers face financial challenges of their own without resorting to government assistance? It's unlikely that many citizens are losing sleep simply because some former government beneficiaries are now forced to work lower-tier jobs.
Supporters of extended unemployment benefits may note that the labor force participation rate in North Carolina has fallen, and is below the national rate. That's a valid point, which suggests some on unemployment didn't seek jobs once benefits ended. Yet it's worth noting that many liberal groups that proclaim every minor decline in the national unemployment rate to be proof the Obama administration's economic policies are working ignore the fact that most of that movement is also tied to declining labor participation, not job creation.
North Carolina's situation is worth noting because some suggest Oklahoma's unemployment benefits program also needs improvement. In his recent Policy and Issues Report, Lt. Gov. Todd Lamb says a functional unemployment system provides an important safety net. But Lamb notes many business leaders warn of “a disquieting 'culture' penetrating our state” in which unemployment benefits are being abused or treated as an entitlement.
“Unemployment compensation should be for those workers, who through no fault of their own find themselves displaced,” Lamb writes. “It should not, how-ever, be a refuge for those terminated because of misconduct on the job. While that is already the law, business leaders have personal experience that this is not being enforced. It is vital that Oklahoma ensures that the new unemployment compensation laws allowing employers to discharge for misconduct and not pay unemployment compensation are properly enforced.”
In North Carolina, it appears many citizens previously chose taxpayer support over gainful employment. In Oklahoma, Lamb argues unemployment benefits are not only benefiting those who could otherwise obtain work, but also those who are flagrantly scamming the system. That's good reason to increase oversight of the system and keep benefits in check.