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North Carolina drops long-term unemployment benefits North Carolina drops long-term unemployment benefits
(35 minutes later)
As many as 70,000 long-term unemployed North Carolina workers will lose public benefits on Monday in a budget-saving move enacted in February.As many as 70,000 long-term unemployed North Carolina workers will lose public benefits on Monday in a budget-saving move enacted in February.
Cuts to state jobless aid rendered North Carolina ineligible for federal benefits to the long-term unemployed.Cuts to state jobless aid rendered North Carolina ineligible for federal benefits to the long-term unemployed.
The state said it needed to slash benefits to repay debt more quickly, but critics argue the move favours business interests over workers.The state said it needed to slash benefits to repay debt more quickly, but critics argue the move favours business interests over workers.
North Carolina has the nation's fifth-highest unemployment rate at 8.8%.North Carolina has the nation's fifth-highest unemployment rate at 8.8%.
The US economy has endured a painfully slow recovery with the national unemployment rate currently at 7.6%, down from 10% at the depths of the financial crisis in October 2009.The US economy has endured a painfully slow recovery with the national unemployment rate currently at 7.6%, down from 10% at the depths of the financial crisis in October 2009.
The looming end of long-term unemployment benefits has left those dependent on them reeling.
"I'm just not sure what I'm going to do," said Lee Creighton, 45, who lost a job as a manager of statisticians and writers in 2009 and last worked in October.
"What are we to do? Is the state prepared to have this many people with no source of income?"
Under a law passed in February by North Carolina's Republican legislature, the state forfeits federal funds that support the long-term unemployed by cutting the dollar amount of weekly benefits offered to shorter-term unemployed residents.Under a law passed in February by North Carolina's Republican legislature, the state forfeits federal funds that support the long-term unemployed by cutting the dollar amount of weekly benefits offered to shorter-term unemployed residents.
While other US states have reduced the length of time unemployment benefits are paid out, they have spared weekly benefit payments, thereby avoiding the loss of federal assistance to the long-term jobless.While other US states have reduced the length of time unemployment benefits are paid out, they have spared weekly benefit payments, thereby avoiding the loss of federal assistance to the long-term jobless.
'What are we to do?''What are we to do?'
At the heart of the matter is $2.5bn (£1.6bn) in debt North Carolina owes to the US government, which the state accrued to pay for a sharp rise in benefits during the 2009 economic meltdown.At the heart of the matter is $2.5bn (£1.6bn) in debt North Carolina owes to the US government, which the state accrued to pay for a sharp rise in benefits during the 2009 economic meltdown.
Under the February law, businesses pay a higher per-employee tax, with the proceeds paying down the debt. At the same time, the cuts in benefits will remove an estimated $20m from the state's economy per week.Under the February law, businesses pay a higher per-employee tax, with the proceeds paying down the debt. At the same time, the cuts in benefits will remove an estimated $20m from the state's economy per week.
North Carolina officials hope the debt will now be paid down by 2015 or 2016, not 2018 as before the February law was passed.North Carolina officials hope the debt will now be paid down by 2015 or 2016, not 2018 as before the February law was passed.
The law was signed by Republican Governor Pat McCrory in February.The law was signed by Republican Governor Pat McCrory in February.
Mr McCrory said it would protect the state's small businesses from "continued over-taxation" while securing the unemployment safety net and encouraging businesses to create jobs.Mr McCrory said it would protect the state's small businesses from "continued over-taxation" while securing the unemployment safety net and encouraging businesses to create jobs.
State Representative Julia Howard, the Republican who sponsored the bill, suggested the cuts would push out-of-work North Carolinians to find work faster.State Representative Julia Howard, the Republican who sponsored the bill, suggested the cuts would push out-of-work North Carolinians to find work faster.
"It may not be the job that you want or your career for the rest of your life," she said."It may not be the job that you want or your career for the rest of your life," she said.
Critics of the law say the state legislature has favoured businesses over the state's workers. The National Association for the Advancement of Colored People (NAACP) and other groups have staged protests at the state assembly on Mondays for seven weeks against the legislature's more conservative policies.Critics of the law say the state legislature has favoured businesses over the state's workers. The National Association for the Advancement of Colored People (NAACP) and other groups have staged protests at the state assembly on Mondays for seven weeks against the legislature's more conservative policies.
Democratic State Representative Paul Luebke told the Raleigh News and Observer he and others would continue to fight for the restoration of the programme.Democratic State Representative Paul Luebke told the Raleigh News and Observer he and others would continue to fight for the restoration of the programme.
"This is critical income," Mr Luebke said. "This is income that in some instances is the difference between losing a house, foreclosure, losing a car, repossession, or getting along a little bit.""This is critical income," Mr Luebke said. "This is income that in some instances is the difference between losing a house, foreclosure, losing a car, repossession, or getting along a little bit."