N.C. experiencing a vast increase in unemployment insurance claims due to COVID-19

A report released last week shows North Carolina has the second-largest percent increase in unemployment insurance claims due to COVID-19.

WalletHub, a consumer-oriented website that largely deals with finances, released this report because they’ve received a lot of questions pertaining to unemployment and they wanted to shed light on it on a national level, WalletHub analyst Jill Gonzalez said in an email.

The findings revealed that North Carolina saw an increase of over 6,000 percent in the number of unemployment insurance claims the week of March 23, 2020 when compared with that of the same week last year.

Furthermore, North Carolina has additionally experienced an approximate 4,770 percent increase in the number of those claims between the first week of 2020 to the week of March 23.

Only Louisiana was ranked higher overall.

Gonzalez said one of the primary factors causing the rise of unemployment claims is the strong presence of industries most impacted by the pandemic.

“North Carolina has had the second-biggest increase in unemployment so far due to the coronavirus because a large share of its employees works in the accommodation and food services industry,” Gonzalez said. “In addition, more than 44 percent of employment throughout the state comes from small business.”

She also said states with more confirmed cases and deaths tended to have larger unemployment numbers, but as other states are testing more, the numbers could level out.

Over 6.6 million people have filed for unemployment across the country, and many states are grappling with the huge increase in claims. Gonzalez said in the press release that states should focus on helping the businesses in the most need.

“The federal response will include sending checks to most citizens, even those whose income has not been affected by the coronavirus,” Gonzalez said. “States can use a more targeted approach to divert resources to the companies affected the most, thus having maximum impact for the money spent.”

Under the current state unemployment insurance system, the percentage of people who were unemployed and were actually receiving unemployment insurance benefits was under 10 percent in 2019.

Last month, Gov. Roy Cooper issued an executive order that made changes to the unemployment insurance system by removing both the one-week waiting period to receive unemployment benefits and the requirement that people be searching for a new job, allowing people with reduced hours due to COVID-19 to apply for benefits, and allowing people to apply by phone or online.

Patrick Conway, a UNC economics professor, said the state historically has made it very hard to apply to this program and has turned down a great number of applicants. 

“They can be rejected because they are not considered an employee, they are considered self-employed or independent contractors,” Conway said. “When they go in for unemployment insurance, under our law, they do not qualify for it.”

However, he said the governor's executive actions changes that because recently passed federal legislation will help supplement unemployment insurance in the state.

This implementations of three federal unemployment programs consists of the provision of an additional $600 in weekly benefits, an additional 13 weeks of benefits, and further assistance to people who are not normally eligible for the state unemployment benefits.

In a press release from the N.C. Department of Commerce's Division of Employment Security, the agency said it was moving aggressively to more quickly assist everyone during this time.

“The Division of Employment Security understands that for people who have lost their jobs, the assistance can’t get there soon enough,” DES Assistant Secretary Lockhart Taylor said in the press release. “We are taking immediate action to increase our capacity in the face of this historic challenge and be there for the North Carolinians who need our help.”

DES said it is hiring more staff, doubling its print and mail capacity, and contracting with an additional 200-person call center among other measures to better assist individuals and employers.

As of April 3, DES said it has sent out over $10 million in unemployment benefit for claims related to COVID-19, but that number will continue to grow as more claims are filed and more payments are sent out.

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