About Unemployment Insurance

• History
• FAQ
• Profiles of Unemployment
• Unemployment Benefits and North Carolina’s Economy
• Financing the Unemployment Insurance System

History

The Unemployment Compensation program was created through the Social Security Act of 1935 with two main objectives: to provide temporary, partial wage replacement to involuntarily unemployed workers and to help stabilize the economy during times of recession. A joint federal-state program, today’s Unemployment Insurance (UI) program allows workers who are looking for a new job to meet their basic needs and helps stabilize the economy by supporting consumer spending.

UI benefits are time limited, however, and extensions are necessary during periods of high employment. Both Republican and Democratic Congresses over the last 40 years have extended UI benefits to the long-term unemployed during every major recession. Not once over the last four decades has Congress allowed extended UI benefits to expire when the unemployment rate was over 7.2 percent. Read more…

Frequently Asked Questions about the Unemployment Insurance System

Click a question to see its answer.

1. What is unemployment insurance?
2. How many people are unemployed in North Carolina?
3. Who is eligible for unemployment benefits?
4. What counts as losing your job through no fault of your own?
5. How much assistance can an unemployed worker in NC receive in unemployment benefits?
6. How long can an unemployed worker receive unemployment benefits?
7. How is unemployment insurance program funded?
8. Is there any other purpose for unemployment insurance other than helping unemployed workers?
9. What is the federal extended unemployment insurance program?
10. What happens if the federal Extended Unemployment Compensation program expires on February 29th, 2012?

Profiles of Unemployment

Unemployment affects many North Carolinians. White-collar and blue-collar workers, women and men, veterans, older and younger workers and workers of color have all been impacted by the economic downturn and the continued lack of jobs in the economy. Below are Profiles of Unemployment in NC.

Veterans
Older Workers
Women and Men
Young Workers

Unemployment Benefits and North Carolina’s Economy

Unemployment insurance provides workers with a modest payment to maintain their spending on basic needs. In so doing, it ensures that businesses do not further see declines in demand for their goods and services. Unemployment insurance payments have represented a growing share of the state’s total personal income over the period of the Great Recession. By comparison, the total personal income of workers in furniture manufacturing, textile manufacturing, building construction and nursing and residential care facilities were each less than 1 percent of state personal income.

From June 2009 to July 2011, $14.2 billion in total unemployment insurance payments from state and federal sources were made in North Carolina. Research by Moody’s.com found that for every $1 in unemployment benefits, $1.64 is generated in economic activity. Thus, unemployment benefit payments have generated an estimated $23.3 billion in economic activity in North Carolina communities. This economic activity sustains private businesses and supports working families.

Still Unemployed After All These Years

Unemployment Insurance Benefits Remain Critical for Jobless Workers

Financing the Unemployment Insurance System

North Carolina’s unemployment insurance trust fund was below safe levels before the Great Recession hit and put many North Carolinians out of work. A series of tax changes in the 1990s reduced how much employers were required to contribute to the trust fund and took $1.5 billion out of the unemployment insurance system. North Carolina can make two key policy changes to make an unemployment insurance system that is sustainable, equitable and sets the Trust Fund on the path to solvency. These include expanding the taxable wage base and reforming the experience‐based rating system.

To learn more about steps to forward financing, click here.

And the path to insolvency, click here.