Fact Check: Moving to NC to collect unemployment?

Posted January 13, 2014

Gov. Pat McCrory

The claim: During a recent taping of NC Spin, Gov. Pat McCrory was asked to defend controversial changes to the state unemployment system. As part of that conversation, he said that, until those changes were put in place, people were moving to North Carolina because the state's benefits were among the most generous in the country. 

"We had the ninth-most-generous unemployment compensation in the country," McCrory said. "We were having a lot of people move here, frankly, from other areas to get unemployment ... People were moving here because of our very generous benefits, and then, of course, we had more debt."

The question: Were people moving to North Carolina attracted by unemployment benefits?

The backup: In general, McCrory has argued that unemployment insurance reform was necessary because the state didn't have the money to pay new unemployment insurance claims. As a result, the state borrowed roughly $2.5 billion from the federal government, which in turn triggered automatic tax increases for businesses. Those taxes, he has argued, are a drag on hiring. 

What's new about his statement on NC Spin is that McCrory implied a significant portion of those new claims came from people moving to North Carolina from elsewhere. WRAL News asked McCrory spokeswoman Kim Genardo where McCrory got the information regarding benefits. 

"The governor was referring to personal stories he’s heard," she said.

Genardo also pointed to three different sources that discussed unemployment benefits. They include a Politico story on North Carolina's unemployment insurance changes, a paper co-authored by Alan Krueger, a former adviser to President Barack Obama, and a report by the Congressional Budget Office. All those of those documents discussed why paring unemployment benefits might spur people to find work, but none of them addressed the question of whether people move to states for more generous unemployment payments. 

More information: If someone did move to North Carolina expressly to file for unemployment insurance, they would likely be disappointed.

Generally, state unemployment insurance payments are based on the amount of time a worker has earned wages in the state. According to North Carolina's Division of Employment Security, the minimum qualification for someone to apply for benefits is for someone to have worked in a job for which unemployment insurance tax was collected "in at least two (2) quarters of your base period." Base periods can vary but are typically the last 15 months. 

Although there are exceptions, the easiest way to think about this is someone would have had to work in the state for around six of the last 15 months in order to be eligible for benefits. The amount of someone's benefit is governed by how long they worked and how much they made. Although the recently passed unemployment insurance reform bill changed the amount of benefits paid, it did not significantly change the five-quarter base period definition. 

Workers who move from other states but haven't worked in North Carolina can tap their former state's unemployment insurance, but those payments come from the state where they earned their wages. 

From the experts: Andrew Brod, an economist and researcher at the University of North Carolina at Greensboro, said that McCrory's claim "defies reason."

This isn't the first time Brod has looked at this claim. In November, Commerce Secretary Sharon Decker told an audience that the state's unemployment rate remained high because of the "headwind" of people moving here. She did not claim that people were moving here for unemployment benefits, but her claims got some push back from economists who said her statement cited old data.

At the time of Decker's remarks, Brod wrote a column relying on census data that showed fewer people were moving for any reason. Only a small percentage – somewhere between 2 and 3 percent – of those who do move, he said, moved because they were laid off.

"People are a little bit more likely to stay in place and suffer the slings and arrows of an outrageous recession," Brod said.

He said it's important to keep in mind that not everyone who is moving is moving across state lines. Some people will just move to the neighboring county or across the state.

Can he rule out people moving to a state because its safety net is better?

"No, it could be a phenomenon," he said. "But it's numerically so small there's no way it's affecting the kind of traction that North Carolina gets on its economic policies."

The call: North Carolina's own rules prohibit people who have not worked in the state from tapping the state's unemployment insurance system, and economists say there's scant evidence for people moving across state lines for any work-related reason, much less because they're comparison shopping for unemployment insurance.

Given that McCrory can offer scant evidence for his claim, it would be hard not to rate his statement as false.


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  • RDcallsit Jan 16, 2014

    Mr. McCrory, you will be out of office the next election...

  • realistic one Jan 15, 2014

    Pensive01 and Sceeter
    FYI Comments are limited to 1000 characters. Just beacuse I did not state how I have handled the fraud I have witnessed, does not discount the fraud. What is truly disturbing about your comment is your willingness to attack my statement as a failing on my part without knowing whether or not I reported the fraud. This approach is known as the 'Clinton' approach to conflict and is really the biggest cop out there is. For the record, I HAVE reported the cases of fraud I have personally witnessed. I have even gone further by attempting to follow up on the progress of the 'investigation' into this fraud. For this reporting and follow up, I have been verbally attacked as a racist by an NCESC employee (even though 1 of 2 cases was a white couple) and last year I was informed I was being audited for the last 7 years by the state of NC. Now I can't say the two are related, but I have no special reason to be audited having claimed no odd deductions. Hmmmm.

  • Pensive01 Jan 15, 2014

    View quoted thread

    Actually the only mistakes you've made are, if your story about the couple committing fraud is in fact true, 1.) admitting that you have knowledge of the crime being committed and 2.) that, based on your statement that indicates the scam is still occurring, have apparently chosen to remain silent. In other words, your moral indignation that people MAY be scamming the system is severely undercut by your not following your moral obligation to report the fraud that IS BEING committed to the appropriate authorities.

  • ILoveDowntownRaleigh Jan 15, 2014

    The governor caught lying yet again. And there is no wiggle room on this one, as on many others.

    Why not embrace the truth? People respect that from a leader. They're not getting it!

  • Bill Brasky Jan 15, 2014

    View quoted thread

    Well it takes about 100 years are so to be reminded why no one ever votes for Republicans in this state.

  • raleighboy524 Jan 15, 2014

    McCrory is delusional. And he defines the notion of "truthiness" that Stephen Colbert identified -- truth is whatever you believe in your heart at a given moment, regardless of the facts.

  • Bill Brasky Jan 15, 2014

    View quoted thread

    How could you have evidence that something was not happening?

  • cpacandidate Jan 15, 2014

    I am going to tell it like it is looking for a job in NC. Over the last ten years of looking for a decent job, I have had to work in sawdust blowing in the window, the sheriff showing up to give subpoenas to the owner for lack of payment and the boss wants to borrow a huge amount of money, a large corporation with fraud going on, an owner that won't release his A/P checks because he wants to make his books look good to buy another business, a manager who fires an employee for being nervous because a previous armed robber is hanging around talking to another employee within sight, another large corporation that throws away their customer files after a months work due to a fabricated dispute between departments and the list goes on. The people out here who are unemployed are more ethical than what you expect them to work in. Get some ethics and decency NC employers.

  • icdmbpppl Jan 15, 2014

    The truth is, some people wouldn't work in a pie factory tasting pies. Some people have a strong work ethic, and some don't. You can throw all the money in the world at education, job training, etc, but you can't change a lazy person's behavior. Some people would rather live in poverty than work, and poverty level is what you get with a gov't handout.

  • dollibug Jan 15, 2014

    Moving to NC to collect Unemployment? WOW*****interesting story. I have to wonder exactly who provided this interesting story ? Does anyone have a clue. Funny that the media only allows what they want us to know....regardless.