Republicans have claimed that ending emergency unemployment compensation will improve the job prospects of unemployed Americans. Republicans point to North Carolina as a “real world" example, but the facts do not support that claim. (NC’s federal UI program stopped at the end of June because the state intentionally violated one of the program’s rules that prevent immediate cuts in weekly UI benefit amounts.)
False Claim:
North Carolina provides a “real world" example that ending federal unemployment benefits is good for the economy.
Fact Check:
In the last four months on record since North Carolina effectively shut down the Emergency Unemployment Compensation program, over 42,000 people have dropped out of the state’s labor force. In short, that means that over 95 percent of the recent improvement in North Carolina’s unemployment rate is due to people giving up their search for work and therefore no longer counting as unemployed. Pushing people out of the workforce is clearly not good for these individuals, their families, or our economy.
The impact in North Carolina is consistent with recent research that finds the primary effect of extended unemployment benefits is to help people continue to look for work, rather than exit the work force. Even a recent paper by a scholar at the conservative American Enterprise Institute concludes that we should extend federal unemployment benefits because “long-term unemployment is much more severe today than it has been in previous recessions when we we’ve pulled the plug on emergency benefits, and ending emergency UI will likely result in many of today’s long-term unemployed exiting the labor force."
As Evan Soltas described in his Bloomberg column the situation in North Carolina after it slashed unemployment benefits is far from the “real world" ideal that Republicans portray.
