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Many unemployment benefits have ended, but debate over N.C. benefits hasn’t stopped
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Many unemployment benefits have ended, but debate over N.C. benefits hasn’t stopped

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Only two days out of prison and looking to make a fresh start, Jonathan Burrows went to a recent job fair in downtown Durham that was focused on restaurants, hotels and other parts of the service industry.

He boarded a bus home several hours later with paperwork and business cards tucked inside his backpack, from multiple places that wanted to hire him — despite him being open about his felony record and having no prior experience in the industry.

He was overwhelmed, he said, by how well it had gone.

“I got so many job offers, I’ve got to go home and look through them to choose,” the 33-year-old Burrows said. “One told me I could work front-of-house and not have to deal with the kitchen. And another told me I could make $16 an hour, even with no experience.”

Restaurants have had well-documented struggles finding workers as businesses get back to semi-normal. Most shut down for months due to the COVID-19 pandemic. Many of their workers moved on to new jobs, and those openings have proven tough to fill.

Conservative politicians have blamed extra unemployment benefits from the federal government for contributing to the lack of interested workers. Those came to an end Sept. 4 in North Carolina and the rest of the country. Liberal politicians, meanwhile, have blamed low wages and the high cost of child care.

Regardless, if it appears that the simple act of showing up and expressing a desire to work is enough to get a job in the service industry these days, that’s because sometimes it is.

Francois Dormevil, the executive chef at Durham’s Beyu Caffe, has been scrambling to find staff ever since it fully reopened in March.

“It’s not a question of keeping people,” he said. “It’s getting them in the door. We have people who schedule interviews but then never show up. And we’re blessed to be growing — we’re getting customers in the door. Just not people who want to work.”

But with the extra unemployment benefits now gone, and with some restaurants now offering to pay well above the minimum wage, restaurant owners are hoping to soon get back to where they were before the pandemic.

Marco’s 530 owner Layne Fontes said that earlier this summer he scheduled 15 people for interviews yet only two actually showed up. But he met two good candidates at the job fair that he planned to hire, he said, and is hoping that that’s just the start of filling out his staff.

“Unemployment is running out now for a lot of people, so hopefully people will be more enticed to come back to work,” he said.

Does unemployment help or hurt?

State governments still have their regular unemployment programs. But the federal benefits, before they ended, had paid an extra $300 per week. They also applied to some types of workers who wouldn’t have qualified for state benefits.

The federal benefits were the same everywhere but seemed particularly generous in North Carolina, which has among the lowest benefits in the country.

But while some business owners and politicians are celebrating the end of the federal benefits, some are dreading what it means for future layoffs. People who are self-employed, or who work as freelancers or independent contractors — a common designation in many industries, like construction and tech — are not allowed to receive unemployment benefits under state law.

So any of those types of workers who lost their jobs during the pandemic were only able to get unemployment because of the expanded federal benefits. With those now gone, they have no safety net in case of future unemployment.

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One of them was Mark Barroso of Pittsboro, who works on TV show sound crews. Many shows started canceling early on in the pandemic, so he had no work. And he wasn’t eligible for state unemployment benefits due to the way the shows had previously hired him as a contractor. But he did get federal benefits, which kept his bills paid through the end of 2020.

“I got off unemployment in January,” he said. “Work started picking up. And I got a PPP loan. But unemployment saved my life. Even with it, I had to start dipping into my retirement savings.”

In North Carolina, the Republican-led legislature tried ending the federal benefits early, saying they were stopping people from going back to work. Many other Republican-led states did the same.

Legislative leaders pointed to a national poll of unemployed people who had turned down a job offer during the pandemic, in which 13% said they were making enough on unemployment to not need a job. That was the third-most-common reason people gave, after high child care costs and health concerns about COVID-19.

“The data validates the obvious conclusion that most honest observers reached: When government pays people not to work, lots of people don’t work,” Republican Sen. Chuck Edwards wrote in a news release highlighting that poll, conducted by Morning Consult in June.

The owner of several McDonald’s restaurants in Western North Carolina, Edwards is the top official in the Senate on unemployment issues and was a main proponent of cutting off the federal benefits early.

Democratic Gov. Roy Cooper vetoed that bill, saying it would take money out of the economy and hurt people struggling to make ends meet.

A fight over the future of unemployment

Some Democrats say there’s now proof that Cooper was right to keep the benefits coming: Many of the GOP-led states that cut benefits did so in June. But in July, all five of the top states for job growth — including North Carolina at No. 3 — were states that had kept all or some of their benefits.

North Carolina saw faster job growth in July than every state in the country except for Vermont and Hawaii, according to the Bureau of Labor Statistics. The August data is not yet out.

Now that the federal benefits are done, Democrats here want to discuss raising the state benefits — and quickly.

“We have the second-worst unemployment system in the country ... less than half the national average,” Sen. Wiley Nickel, a Cary Democrat, told his fellow lawmakers during a debate over the bill to end the federal benefits.

Republicans, however, do not share that sense of urgency. There is a committee in charge of overseeing unemployment issues, but it hasn’t met in months. Edwards is the co-chair of that committee and told The News & Observer recently that there are no plans for it to meet again anytime soon, either.

In June, when the legislature was advancing the bill to cut the federal benefits off, Nickel tried amending the bill to both increase the state’s benefits and also give businesses a yearlong break from paying unemployment taxes.

The state has a large surplus in its unemployment fund, due to sweeping cuts Republicans made in 2013. The program had previously faced a large deficit, coming out of the Great Recession. Nickel and other Democrats say the state made such large cuts that it can now afford to increase benefits, but Republicans have resisted dipping into those savings.

Another strategy Democrats have proposed for addressing labor shortages is raising the minimum wage. During the same debate in June over the bill to cut off the federal benefits, Durham Sen. Natalie Murdock suggested a different amendment, raising North Carolina’s minimum wage from $7.25 to $15 an hour.

“I think that most people want to go back to work,” she said. “However, some barriers need to be moved, and one barrier is our inability to pay living wages to people every day.”

Both her and Nickel’s amendments were shot down on party line votes.

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