Newly elected North Carolina governor, Pat McCrory signed into a law a bill slashing the amount and length of time that an individual can collect unemployment benefits. The legislation will go into effect July 1, 2013. Currently, an individual is eligible for a maximum amount of $535 for 26 weeks. The new legislation reduces the maximum benefit to $350 and cuts the number of weeks of benefit eligibility to between 12 to 20 weeks. Currently, North Carolina has the nation’s fifth highest unemployment rate. The national unemployment rate is 7.9% while North Carolina’s is 9.2%. More than 400,000 people in the state are unemployed. The underemployment rate (workers who have given up looking for work or who can only find part-time work) for the state is 17.5%, one of the nation’s highest. According to statistics released by the North Carolina Division of Employment Security, in December of 2012 unemployment rates increased in 97 of the State’s 100 counties. North Carolina is also refusing a loan of 700 million dollars from the federal government to use for unemployment benefits.
There are few government benefits that have a higher economic stimulative effect than unemployment benefits. With all of this bad economic news, why has North Carolina decided to cut benefits and reduce the unemployment tax rate paid by employers? To understand McCrory’s decision to embrace austerity measures one simply needs to look at who endorsed and financed his campaign. Pat McCrory is the former mayor of Charlotte and was never known as a particularly conservative individual. Indeed, his signature accomplishment was not of cutting spending but of growing infrastructure. In 1998, he fought conservatives and campaigned for half-cent sales tax increase to fund the city’s 10 mile light rail line. He was defeated by Democrat Beverly Perdue in his first gubernatorial campaign in 2008. In 2008 there was no Tea Party and the Republican Party had not quite lost its collective mind. When he ran in 2012, the political environment had changed, and so, coincidentally did McCrory.
While running for Governor his campaign was deeply connected to the Koch Brother’s Tea Party group Americans for Prosperity. During the campaign, McCrory raised 11.6 million and outside groups spent 5.3 million on his campaign. During the campaign these outside groups spent heavily on negative ads. By contrast, his opponent, Walter Dalton, was only able to raise 3.9 million. Outside groups spent only 2.6 million on Dalton’s campaign. His campaign enjoyed a 2 to 1 financial advantage over Dalton. McCrory’s campaign talking points could have been written by the American Legislative Exchange Council (ALEC). In an effort to restrict voter turnout, ALEC has been trying to pass voter identification laws in North Carolina. Perdue vetoed past legislation to require voter identification. McCrory campaigned on the need for voter identification and it is likely that North Carolina will soon see new restrictive voter identification legislation passed into law.
Maybe Pat McCrory is not member of the tea party with his heart and soul. Maybe he is just paying back the favors that were purchased during his campaign. What a person believes is not nearly as important as what they do. His austerity measures will make North Carolina’s economy worse, not better. It is too early to tell if McCrory is going to rule as a dictator like Michigan’s Governor Rick Snyder; or if he is going to be an unhinged lunatic like Maine’s Paul LePage. What is absolutely certain is that by signing this legislation he has demonstrated that he is yet one more politician who believes in austerity. The economy and citizens of North Carolina will suffer and the Koch Brothers will pat themselves on the back for achieving another victory. Those who campaign for austerity never feel its pain.