Fact Check: Are other states following NC's lead on unemployment?
Posted January 12, 2015
Durham, N.C. — Gov. Pat McCrory was doing what governors do when they speak to groups such as the North Carolina Chamber and the North Carolina Bankers Association on Jan. 5. Namely, he was extolling his administration's work on business issues and asking for corporate leaders to back his agenda.
Toward the end of a section of his speech that dealt with unemployment insurance, McCrory said something curious that got overlooked in the press of stories that came out of that meeting. Nonetheless, a big, circled "huh?" in our notebook beside these quotes prompted us to revisit.
"What we did, working with the legislature … we made some very, very difficult decisions which did not survey well. We decided not to extend unemployment. We were the only state in the United States that decided not to extend unemployment," McCrory said, fairly summarizing some of the controversy from 2013.
Early in that year, North Carolina changed the structure of its benefits program for unemployed workers and, as a result, became the only state in the nation to trigger cuts to long-term federal unemployment benefits.
Those federally funded long-term benefits would help workers when state-funded benefits ran out. But federal rules requiring maintenance of effort cut off the long-term program for states that reduced their benefit amounts. North Carolina curtailed benefits in a couple of ways, including decreasing their duration from 26 weeks to a sliding scale that varies with economic conditions. Currently, the state offers 15 weeks of benefits.
"If we were to continue to extend unemployment and have the ninth-highest compensation in the country, this state would owe well over $3 billion to the federal government," McCrory went on. "We drew the line and made the tough decision. As a result of that decision, you now only owe the federal government less than $400 million, and we’re going to pay off that debt in the next six months, three years ahead of schedule."
All of that is fair enough.
No matter what side of the unemployment insurance debate you stand on – critics of McCrory and the Republican-led legislature said the state unnecessarily penalized workers hurt by the recession, while McCrory points to the dropping unemployment rate as evidence his policies are working – it's fair to say that North Carolina has dramatically changed its unemployment compensation policy over the past two years.
But it's hard to think of a program or policy that North Carolina pioneered and then "all other states" have adopted on their own.
The Question: Have other states somehow "followed our lead" on unemployment insurance?
Summary Judgment: The governor's statement gets a red light. North Carolina was a trendsetter of sorts, but it is a stretch to suggest other states "decided" to follow our lead.
The Governor Says: It took us a while to catch up with the Governor's Office on this, and in the mean time, we called some policy experts to see if they knew what McCrory was talking about. We asked if they knew of North Carolina adopting a policy that all other states had then emulated.
Michael Leachman, a state fiscal policy expert, called the remark, "bizarre," and Burt Barnow, a former U.S. Labor Department official who is now a public policy professor at George Washington University, added, "I'm not aware of anything like that." One other national policy expert declined to even hazard a comment but couldn't think of an example of North Carolina being a trend setter.
Just as we were about to throw up our hands, McCrory spokesman Ryan Tronovitch emailed to clarify that the governor was speaking about Congress failing to renew the long-term benefits program for all Americans six months after the workers in North Carolina lost access.
The History: Congress originally put the long-term unemployment benefits program in place in 2008 to deal with the aftershocks of a recession that saw many workers lose their jobs and have problems finding new work. When it ended on Jan. 1, 2014, some 1.3 million Americans lost benefits.
North Carolina's unemployment moves came during a period of particularly partisan-induced indolence in Congress, and right before the long-term emergency benefits program was about to expire, Congress could not come to an agreement on extending the program in December 2013. Senators made a stab at reinstating the program in 2014, but the measure did not make it through the U.S. House.
Follow the Leader?: While the governor might have gotten the sequence of events right, the experts we consulted said he's got the cause and effect wrong.
"Those long-term benefits just died, so if he's referring to that, the other states went along because they had to," said Barnow.
Leachman was more blunt. Fact Check: Moving to NC to collect unemployment?
"The other states were not following North Carolina's lead," he said. "That was a decision made by Congress. It had nothing to do with North Carolina."
No other state, Leachman said, took steps that led to their residents losing access to the long-term benefits before Jan. 1, 2014.
We asked the McCrory's office if his claim might have been taking a little bit too much credit.
"Without getting too snarky here, doesn’t that decision by Congress come from representation that includes all the other states?" McCrory spokesman Josh Ellis said in an email. "I think you’re getting hung up on where this decision was made. We're not trying to say it was a state-level decision."
It certainly wasn't. At least 16 states, all with Democratic governors, pressed Congress to reverse course, and at least some state-level Republicans, such as Nevada Gov. Brian Sandoval, also joined the call to extend the long-term benefits in late 2013 and early 2014.
That doesn't exactly square with McCrory's claim that all other states "followed our lead" and decided not to extend benefits.
More context: North Carolina is an outlier in terms of unemployment insurance in other ways as well. The Center on Budget Policy and Priorities recently completed a survey of state unemployment insurance programs. Only seven states – North Carolina, South Carolina, Georgia, Florida, Missouri, Kansas and Arkansas – offer fewer than 26 weeks of benefits. Under current policies, only Florida is offering fewer weeks of unemployment assistance than North Carolina.
The Call: McCrory's remark certainly does not get a green light on our fact-checking scale. But the statement has at least some historical grounding, so the governor does not earn our first, soon-to-be-dreaded "moving violation."
The deciding factor on this call is the governor's implication that North Carolina had set an example others chose to follow. Yes, all other states find themselves in the same boat, but it wasn't exactly their decision to come aboard.
This statement gets a red light.