State borrows money for unemployment fund
Posted February 12, 2009
Updated March 9, 2009
Raleigh, N.C. — The state Employment Security Commission borrowed $13 million from the federal government Thursday to help pay unemployment benefits.
The move was the first time in seven years the state has had to get a government loan to bolster its unemployment trust fund.
Nearly 400,000 North Carolinians were unemployed and seeking work in December – a record number. The number of unemployed jumped by 185,000 in 2008.
“We’re having some days where we pay out $26 million a day and those payouts will sometimes out pact collections,” said. David Clegg, deputy chairman of the state Employment Security Commission.
North Carolina's jobless rate was 8.7 percent in December, the highest rate in 25 years. About a third of the state's 100 counties reported at least 10 percent unemployment for that month, twice the number with double-digit unemployment in November.
“We’re paying benefits for about 400,000 and the wages in North Carolina are the highest in the southeast, which makes our benefit levels the highest in the southeast,” Clegg said.
The ESC has paid out $17 million in benefits over the past two days and will likely have to borrow more money next week, spokesman Larry Parker said.
People now receiving unemployment will not see any changes in their benefits, Clegg said.
Even in the recession, North Carolina’s labor force gets bigger every week. An estimated 500 people a day move to the state and many of them are looking for jobs, which puts more pressure on the system, Clegg said.