With more than 70,000 jobless North Carolinians set to lose their federal extended unemployment benefits at the end of June, groups that help the poor and unemployed are bracing for the impact not only now, but in the coming months.
Carol Hardison, chief executive of Crisis Assistance Ministry, sees it coming. We probably are the first bellwether, she said.
Within the next two to three months, many of those who are losing benefits could begin receiving utility cutoff notices and eviction warnings. Hardison expects her agency will see an influx of people looking for help with rent and utilities.
And then: What youre going to see 60 to 90 days after that is an increase in homelessness.
In Mecklenburg County alone, more than 7,000 people will forfeit their federal unemployment benefits when the states unemployment overhaul kicks in.
The state legislatures unemployment overhaul, passed earlier this year, voids North Carolinas federal long-term unemployment benefits intended for those unemployed longer than 26 weeks. Federal law cuts off aid to states that dont maintain their current benefit system.
North Carolina is the only state to allow those benefits to terminate, said Mike Evangelist, a policy analyst for the National Employment Law Project.
Besides the 70,000 who will immediately be affected, the U.S. Department of Labor estimates that an additional 100,000 unemployed workers who would have become eligible for the benefits later this year wont be getting them.
Business organizations and conservative lawmakers say the changes to the unemployment system are necessary to pay back approximately $2.5 billion the state owes the federal government. The state borrowed the money to pay unemployment benefits during the economic downturn.
But advocates for the working poor and some economists warn that the loss of federal unemployment benefits will hurt thousands of families, and could damage the states economy. The U.S. Department of Labor estimates the lost federal unemployment benefits would have pumped $780 million into the state over the rest of the year.
Charlotte-area job seekers told the Observer in interviews this month that they dont know what theyll do when the benefits run out. Theyve been applying for work they must, to receive unemployment benefits but havent had success.
Many of them believe age discrimination has worked against them. They tell of how difficult it can be to even get a job interview.
Betty Oates said she lost her job as a patient services coordinator at Novant Health in 2011. Since then, shes applied for dozens of jobs, taken new job skills classes and gone back to college. But she said the market for work is sparse.
They tell you about the hundreds and hundreds of applicants that they have, Oates, 60, said of interviews with prospective employers. Being an older adult, you know there are a lot of younger people out there with more technology skills.
Oates has taking part in this years General Assembly protests to draw attention to the plight of the long-term unemployed and plans to continue, along with her husband.
She worries shell lose her car when unemployment runs out and she cant make the payments.
I havent found (a job) since 2011, she said. What makes them think Im going to find one by the end of this month?
The states May unemployment rate of 8.8 percent is the fifth highest in the nation.
In Mecklenburg County, the April unemployment rate was 8.5 percent. Some 42,575 people were counted as unemployed in Mecklenburg, according to the states Division of Employment Security.
Thats only 3 percent fewer than the figure from April 2009, during the worst of the downturn.
At Goodwills job-training center on Freedom Drive, officials had thought they would see a drop-off in demand by now, with the economy slowly improving.
But last week, the unemployment resource center was filled with people newly out of work, searching for a lead on employment.
Michael Elder, CEO of Goodwill Industries of the Southern Piedmont, said his group has helped about 6,000 people through April of this year, about the same as a year ago.
Quite frankly, we had expected to see that begin to come down a bit, Elder said.
Goodwill offers job-training programs in hospitality, construction and banking, among other programs. Elder said they are coordinating with other organizations, such as a program that teaches people to budget, in preparation for more people seeking help.
Were kind of trying to assess and get a game plan in place to see what are the things we can do, he said.
At Loaves and Fishes, workers anticipate a potential uptick in referrals a few months down the road.
When the bills start coming, our clients will have to make decisions, Sue Bruce, director of marketing at Loaves and Fishes, said.
The food pantry provides a weeks worth of groceries to individuals and families and has seen a tremendous increase in clientele since the economic downturn. Loaves and Fishes served more than 126,000 people last year, about 40,000 more than in 2008.
Shoon Ledyard, the food pantrys accountant, foresees an increase but not necessarily a dramatic one. She said most of the people on extended unemployment benefits are often already receiving groceries from the service because its difficult to live on the meager weekly stipend for very long.
Being out of the workforce for a long time also makes it harder to find a job, say those who counsel job seekers.
The sooner we get people in here, the better, said Steve Partridge, CEO of the public-private organization job skills group Charlotte Works. Skills do atrophy over time.
Once someone has been out of the workforce for six months or more, not only are some employers less likely to consider them, but many will find it harder and harder to do such things as interview well, Partridge said.
Some people fall into a state of depression, he said. That comes through sometimes in the interviews. Theres also a sense of desperation that sometimes kicks in.
While proponents of the unemployment overhaul say its better for the state to take its medicine now and repay nearly $2.5 billion in debt, opponents say such measures disproportionately affect individuals and families already struggling to make ends meet.
Were about to run a massive social policy experiment on unemployed people across the state, said John Quinterno. Hes with South by North Strategies, a Chapel Hill company that researches economic and social policy. It really is sort of uncharted territory.
Advocates of the changes point out that under the plan, business unemployment taxes will go up to accelerate paying off the debt. Thousands of businesses that were exempt from paying unemployment taxes will also now have to start paying.
Each time the rate businesses pay goes up, employers are less likely to create jobs, Mitch Kokai, a political analyst for the John Locke Foundation, a libertarian think tank, said. Scaling back the benefits provides that this debt wont accumulate again.
Quinterno said, however, that changing the unemployment system and reducing benefits wont alter the fundamental fact that jobs are scarce.
To think someone is living high on the hog with only a few hundred dollars a week is a little ridiculous, he said. Cutting off benefits, he said, doesnt change the fact that there just isnt enough (work) for everybody.
William Phillip, who lost his job at Bank of America last August and has been unable to find work since, has seen the concern in the faces of his fellow job seekers at the unemployment office.
These people want to work, he said. You look into their eyes and you see nothing but despair.
Burley: 704-358-5085 Portillo: 704-358-5041
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