N.C. Becomes First State to Drop Federal Jobless Funds

A crowd of job seekers attends a health care job fair, Thursday, March 14, 2013, in New York.

A crowd of job seekers attends a health care job fair, Thursday, March 14, 2013, in New York.

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Labor groups, Democratic congressmen and the state NAACP want to delay the cuts until the federal program expires in January, but lawmakers and GOP Gov. Pat McCrory have refused.

Delaying would burden businesses and potentially increase the debt, said Rep. Julia Howard, R-Davie. The cuts also will push people to find work faster, then move to a better job as the economy improves, she said.

"It may not be the job that you want or your career for the rest of your life. But to take a job, get back into the job market," Howard said.

Opponents who have staged protests nearly every week against Republican policies say lawmakers are slashing a safety net for the poor while corporations and the wealthy benefit.

Overall, the changes will mean $3.6 billion in total benefit cuts and higher costs to employers through 2017, according to the General Assembly's fiscal research office. Benefit cuts on the jobless make up 74 percent of that figure. The accelerated target for repaying the federal debt, which fell to $2.1 billion in June, is sometime in 2015 rather than 2018.

North Carolina companies now pay an additional $42 per employee yearly to pay the debt. Without the changes, businesses' unemployment insurance taxes would rise by $21 per employee every year until the federal debt is paid.

The state's top business lobby, the North Carolina Chamber, primarily assembled the package of proposals that lawmakers adopted.

"You've got to pick a point in time where you solve the problem. They picked a point in time that allowed us the most time to pay the debt as quickly as we can and get a new program in place so that we can help people find work," said Gary Salamido, the group's top lobbyist. "It's a very unfortunate circumstance for everybody involved."

Wayne Bostick, 58, of Raleigh, said he lost his job in April 2011 and will lose extended federal benefits immediately. He said he earned about $700 a week in take-home pay, often working double shifts at a ConAgra Foods plant until it shut down after a fatal explosion. Since then, he said, the only jobs he's found matching his skills pay less than $10 an hour and are outside Raleigh. Now he'll have to revisit those or start a handyman business.

"I'd rather do that than bring home $200" after commuting and taxes, he said. "They are really putting the gun to your head now."

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