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Friday, October 1, 2010

North Carolina's High Poverty Rates & Rising Unemployment Claims

North Carolina Employment Security Commission Backs Off On Collecting Overpayments Of Jobless Benefits

The North Carolina Employment Security Commission said Thursday that it will work with the federal government in hopes of allowing thousands of unemployed North Carolina residents keep $28 million in jobless benefits that was mistakenly paid to them earlier this year.

A computer programming error led to overpayments to about 38,000 people receiving a second year of benefits, ESC officials said. The mistakes occurred in checks issued from January through mid-May, when an internal audit caught the problem.

The agency began sending letters to people last week to inform them of the errors and to detail how much they might owe. ESC Deputy Chairman David Clegg said many of the people receiving letters would end up owing nothing, and about 15 percent were underpaid and would be eligible to receive more money.

Many unemployed residents, however, were incensed when the ESC began cutting their weekly benefit checks in half to recoup the money mistakenly paid out earlier.

Raleigh resident Tammy Lee said the ESC stopped sending her benefit checks altogether.

"I had no warning that I was getting nothing," said Lee, who was laid off from her sales job in February 2009. "I'm in a constant state of panic."

Clegg said officials had to address the issue while the people affected were still receiving benefits.

Lee said she became even more upset this week when the ESC sent her two letters: One said she was no longer eligible for benefits while the second said she remains eligible.

"When you say you have these letters, they don't even want to talk to you. They transfer you," she said.

ESC officials issued a statement late Thursday, saying they had worked out a plan with Gov. Beverly Perdue and U.S. Department of Labor Assistant Secretary Jane Oates to waive repayment of the overpayments, if possible.

ESC Chairwoman Lynn Holmes plans to issue an order waiving repayment, and she will ask Perdue to issue a similar executive order, if required by the federal government.

All claims still need to be reviewed on a case-by-case basis to determine if they're eligible for a waiver, the statement said.

ESC officials declined to answer questions about the plan, including how the state would repay the $28 million owed to the government and whether the money already taken from people's benefits checks would be returned.

"I sincerely apologize for the confusion and inconvenience caused to our citizens over this issue,” Holmes said in the statement. “I could have done a better job communicating this error, and the resolution of the error, to our beneficiaries. I have instructed the ESC staff to work diligently to correct this problem and make sure every claim is handled fairly and accurately.”

The agency plans to keep its phone lines open late and to provide better information to people who have questions about the issue, officials said.

Officials are still investigating to determine the source of the error that led to the overpayments. The technicalities of unemployment extensions granted by Congress and the heavy volume of people in the system contributed to the problem, Clegg said.

"I'm angry. I think somebody needs to be held accountable for this," Lee said. "I kind of feel like I'm a hamster in one of those wheels that I can't get off."

North Carolina Much Poorer Since Recession

The N.C. Justice Center has dissected new census data and found poverty rose sharply in every region of North Carolina in 2009, highlighting the widespread impact of the Recession.

The information released today from the U.S. Census "offers the first glimpse of the impact of the recession on North Carolina’s families and shows even sharper increases in poverty and child poverty than anticipated," the Justice Center reported.

“North Carolina’s families are struggling to get by in this economic downturn and this is just the tip of the iceberg,” said Louisa Warren, a Senior Policy Advocate at the center. “The Great Recession has pushed more than 168,000 North Carolina families into poverty just from 2008, a startling increase that will put pressure on our public systems as they work to support struggling families.”

The Census’ American Community Survey recorded a large jump in poverty in North Carolina, from 14.3 percent in 2007 to 16.3 percent in 2009. That puts nearly 1.5 million North Carolinians officially in poverty, or making at or below $22,050 annually for a family of four.

Similar to overall poverty, child poverty in North Carolina surged to 22.2 percent in 2009 from 19.2 percent in 2007. More than one in five children in North Carolina are now poor.

Further demonstrating the profound impact of the Great Recession, deep poverty—those living below half the poverty rate—has also risen considerably in North Carolina.

In 2009, 7.1 percent of North Carolinians were living in deep poverty, making at or below $11,025 annually to support a family of four, up from 6 percent in 2007. In 2009, an estimated 643,429 North Carolinians were in deep poverty, representing significant distress for North Carolina.

According to the Justice Center, even these numbers may understate the problem. the center noted that "the census data released today were collected in the 12 month period around December 2008 when Unemployment remained low relative to its levels in the latter half of 2009. Today’s data is therefore just a first look at the recession’s impact."

As a result of rising Unemployment rates, median household income in North Carolina dropped to $43,674 in 2009, down from $46,210 in 2007.

Median household income varied across the state and the country. Robeson County had the lowest (among those for which data is available) median household income at $24,788 and many of the counties with high unemployment additionally experienced low median household income: Surry County’s median household income was $33,159 while Burke County’s median household income was $35,004.

Urban counties continued to experience the highest median household income: Wake County’s median household income, the highest in the state, was at $63,609 in 2009 and Mecklenburg County’s median household income was at $52,881.

North Carolina’s median household income remained lower than some of its Southern neighbors and Virgnia, Georgia, and Florida all had higher median household incomes in 2009.

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Sources: McClatchy Newspapers, WRAL, Google Maps

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