Six months after North Carolina’s much-debated decision to cut off federal long-term unemployment benefits for nearly 70,000 people, some of the jobless have taken on lower-paying part-time posts; others have given up looking.
One thing they all seem to agree on: The job market, despite declining unemployment rates, remains brutally competitive, with far more applicants than good job openings. It’s even more difficult, they say, for job seekers over 50.
The Observer checked in recently with four Charlotte residents who lost their unemployment benefits at the end of July, when the state legislature’s changes took effect.
Faced with the loss of that income, three took part-time jobs. One, frustrated, gave up.
All had lost full-time jobs.
While some researchers say it’s too early to know for sure what effect the state’s decision is having, the job seekers’ experience seems to reflect the findings of a Wells Fargo analysis. The study last month by economist Mark Vitner suggests the aid cutoff is helping push North Carolina’s unemployment rates lower.
Losing the benefits has prompted some to take lower-paying jobs they might have turned down before, the study found. Others have stopped looking – which means they aren’t counted as part of the jobless rate.
Greg Morris, 63, desperately wants a full-time job.
He worked for almost 30 years as a commercial construction manager before being laid off during the downturn in 2008.
Just before Christmas, he took a job working about 25 hours a week as an appliance sales associate at the Home Depot store on Wendover Road. He said he went from earning “almost six figures” to making little more than minimum wage.
He likely wouldn’t have taken the Home Depot job if he’d still been drawing the $535 per week he was getting in unemployment benefits, he said. He makes less than that at Home Depot.
“But it’s fun,” he said of his current work. “It gives me someplace to go, and I feel like I’m contributing.”
He and his wife had been surviving on their savings and her income until she got laid off from her job in the mortgage industry three months ago. Now he’s considering taking Social Security retirement income early, and wondering whether they’ll have to sell their south Charlotte home.
They don’t eat out, he said. They’re careful on grocery shopping trips, and have pared down credit accounts. After spending years planning for a comfortable retirement, he’s driving a 1999 truck with 191,000 miles on it and praying it doesn’t break down.
He’s still on the lookout for a full-time job in his field. But online job applications vanish into cyberspace, with little response from hiring managers.
“Very frustrating. Very discouraging,” he said. “You keep thinking that the next big opportunity is right around the corner, but it never happens. It’s tough to accept the fact that I’ve reached a point in my career and life where all of a sudden I’m being almost ignored.”
Not enough jobs for all
North Carolina lawmakers said they revamped the unemployment insurance system last year to help the state pay back about $2.8 billion borrowed from the federal government. The state borrowed the money when unemployment claims soared during the recession. The debt triggered higher federal unemployment taxes for businesses.
Estimates were that some 70,000 people, including about 7,000 in Mecklenburg County, would lose benefits as of the end of June.
Critics predicted many would give up looking for work and swamp social service agencies with requests for help. Supporters of the move said unemployed people would be less selective and take the jobs available.
Officials at Crisis Assistance Ministry and the Salvation Army’s Center of Hope shelter said they haven’t seen a spike in aid requests from unemployed people whose benefits have run out. Officials at Crisis did note that aid requests have held steady, even with the falling unemployment rates.
Charlotte Works, a public-private job training agency, said it saw nearly twice as many job seekers in July as it did the same month a year earlier. The number of requests receded to more normal levels in the fall, said Sara Collins, an agency spokeswoman.
Six months after the benefits ended in North Carolina, about 1.3 million other jobless residents around the country are facing a similar loss after their aid expired in December. Congress is considering legislation to extend them, and observers across the political spectrum have pointed to North Carolina as a bellwether for what could happen nationally.
Sen. Kay Hagan, a North Carolina Democrat facing a tough re-election fight this year, has attached a provision to the bill that would allow the state’s jobless to receive benefits again.
Wells Fargo’s Vitner believes that if Congress doesn’t extend the benefits, the dynamics of the nation’s jobs picture could follow North Carolina’s.
The state’s seasonally adjusted unemployment rate, now at 7.4 percent, has fallen 2 percentage points over the past year, the largest such drop in the country. Vitner noted in a Dec. 24 analysis that three-quarters of that decline happened in the past four months, coinciding with the state’s overhaul of its unemployment benefits.
He wrote that the change has prompted some job seekers to give up, but he said a stronger effect is coming from jobless people taking lower-paying jobs.
After falling by 45,100 during the first eight months of 2013, civilian employment rose 39,400 during the past three months, he noted in his analysis. But the labor force has continued a broader pattern of decline during 2013, dropping by 26,200 people over the past three months.
The same trend is evident nationally, where the labor force participation rate of 63 percent is the lowest in nearly 36 years.
The economy is improving, Vitner said in an interview, but the steep drop in the unemployment rate is exaggerating the extent of improvement everyday citizens might feel.
“We still have a lot of work to do before we get back to where we were before the recession,” he said.
John Quinterno of South by North Strategies, a Chapel Hill-based economic and social policy research firm, cautioned that it is too early to have enough definitive data. But he said the state still isn’t producing enough jobs.
State Commerce Department data show that, as of November, there were 1.5 unemployed people for every job opening. That wouldn’t include employed people who are also applying for new jobs.
“Those who are looking face a tough environment. It’s almost like a game of musical chairs,” Quinterno said. “No matter how hard they might look, at the end of the day, there’s not enough chairs for everybody that wants one.”
Bypassed by the recovery
That’s what Larry Dagenhart has found.
After more than 15 years in public relations and communications, working for prominent employers such as the United Way and the Clariant chemicals company, he’s shocked at how hard it has been to get back into his field.
He received about $475 per week in uemployment benefits before they ended. “It doesn’t make ends meet,” he said, “but it closed the ends a little bit.”
Dagenhart, 45, has since been working about 10 hours a week writing for a local newspaper and handling contract public relations work for the YMCA of Greater Charlotte.
He applied for one job with the city of Charlotte and later learned from a city official that there had been 900 applications.
“It’s a flooded (job) market,” said Dagenhart, who helps other job seekers as a volunteer with Charlotte Works. “I was very close on some very good jobs but just didn’t get the nod.”
He and his wife, who is also looking for work, have had to raid their savings to pay bills. “We don’t throw away a lot of food. You have to think about the dollars a whole lot more when you’re in our situation.”
Connie Kilcoyne, 55, a former assistant underwriter for an insurance company, has had no luck despite countless job applications and fruitless phone calls.
She has stopped looking.
“I’ll go back (to looking) in a while, but ... I’m fed up,” she said. “You get to that point when you have looked this hard and at this many jobs and you’re not hearing anything. Or you’ll have somebody tell you to call them back the next day and you do and they don’t even return your calls.”
She criticized Gov. Pat McCrory and other state leaders, calling them indifferent to the plight of the unemployed.
She has survived on her 401(k) savings. She is selling her Charlotte home and moving into a paid-for house she owns in Asheville.
She says she has applied for jobs paying far less than she previously made but has been turned down for those as well. Like several others interviewed, she fears hiring managers are biased against people her age.
“I even had one guy come out and say he wanted somebody younger – and he was older than me,” she said.
Praying for a turnaround
Betty Oates lost her job as a patient services coordinator at Novant Health in 2011. She has taken job skills classes through organizations such as Charlotte Works, and has gone back to school to try to sharpen her skills.
Oates, 60, said all she has been able to land is an 18-hour-per-week post with Charlotte-Mecklenburg Schools as a substitute teacher in an after-school program, making $10.71 per hour.
“But I had to take that (job). At least it’ll give me a little bit of money to get gas, and tires for my car. If you don’t have any income, how can you go out to do what you need to do to apply for these jobs?”
Her frustration led her to join the “Moral Monday” mass demonstrations in Raleigh last year, in which protesters marched on the state Capitol to protest the loss of unemployment benefits and other changes endorsed by McCrory and Republican leaders in the General Assembly.
“They keep saying the economy is improving, but it’s not in all areas,” she said. “I’ve had to rely on my faith in God to get me through the stress and the disappointment of where my career ended up.”
Dale Folwell, an assistant secretary in the N.C. Department of Commerce, said state officials are working hard to help the unemployed find good jobs.
He said about 65,000 people actually wound up losing benefits, and about 18,000 of them would have lost them anyway because of automatic federal triggers that drop some long-term unemployed people as the jobless rate falls.
He said the revamp in the state’s unemployment insurance system ultimately helps everyone by paying off the state’s debt to the federal government – the third-highest such debt in the country, trailing New York and California.
State officials hope to finish paying the debt by the end of 2015. That reduces penalties the federal government tacks onto companies’ unemployment insurance bills, Folwell added, hopefully leaving them greater freedom to hire more workers.
Frazier: 704-358-5145; @ericfraz on Twitter
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