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The Associated Press April 5, 2011, 2:15PM ET

37,000 in NC face sudden loss of jobless benefits

Roughly 37,000 North Carolinians will lose their unemployment benefits this month, an outcome that at least eight other states have managed to avoid by changing the calculations used to determine when the money can be paid out.

North Carolina lawmakers, though, so far haven't shown interest in revising the formula, which some advocates say risks adding to the misery of an already stagnant job market by cutting off tens of thousands of the long-term unemployed from their benefits.

"It's critical that we keep these benefits in place," said Alexandra Sirota, director of the left-leaning North Carolina Budget and Tax Center. "Not just for the people themselves, but for their communities. When they lose their benefits, they cut back on spending, which hurts local businesses and contributes to the overall problem."

The state Employment Security Commission was notified by the federal government late last week that the extended benefits program has to stop paying out by April 16. That's because a recent three-month average of the state's unemployment rate didn't equal or surpass 110 percent of three-month averages from 2010 or 2009.

That's the formula the government uses to determine which states can pay out the extended benefits, which kick in after 26 weeks of initial benefits followed by 53 weeks of emergency federal benefits. The 20 weeks of the extended program brings people to 99 weeks of benefits, or nearly two years. That may seem like a long time, but the lingering effects of the Great Recession include a job market that's been remarkably slow to recover.

"Even with some leads for jobs, it's a very dismal picture," said Audrey Thornton, employment specialist at Greensboro Urban Ministry.

The organization provides assistance with food, shelter and other emergency needs, but last month added Thornton's position to help cope with the surging number of formerly middle-class people who've lost jobs and are turning to charities for help for the first time.

"They've lost jobs, and a lot of these jobs are middle-class, middle-income jobs," the Rev. Mike Aiken, the organization's director, said. "A lot of these folks have been dependent on unemployment benefits. It's been extended and extended, and when it stops, it comes at a real bad time."

North Carolina is one of about three dozen states to have the extended benefits program, which was created as a way to lessen the sting of the massive job shedding that began around the start of the Great Recession at the end of 2007. About 234,000 North Carolinians have received payments under the program at a cost of around $750 million, according to Larry Parker, spokesman for the commission.

Parker said the agency's hands are tied because of the formula used to calculate whether the benefit can be paid. From December to February, the state unemployment rate hovered just below 10 percent, low enough to trigger the end of the program, although the state jobless rate remains above the national figure.

"We just can't pay it if the federal government says it's triggering," Parker said.

While even a gradual decline in the unemployment rate is welcome in theory, part of the trend is due to discouraged job seekers simply dropping out of the labor market: since the start of the recession, North Carolina's labor force has shrunk by 2.1 percent, compared with 0.4 percent nationally.

"The job growth that we need to see to put people back in work is not there," Sirota said.

The only way to avoid a benefits cutoff this month would be for the General Assembly to pass legislation changing the calculation, which the federal government permits. At least eight states have already done so to keep the money flowing, according to the National Conference of State Legislatures, and about six others have pending legislation that would keep the program operating.

There's currently no legislation in either chamber to change the calculation, making it unlikely that the program will keep going beyond its cutoff date a week from Saturday. That leaves groups like Greensboro Urban Ministry readying for another growth in demand for their services.

"We'd like to get people beyond the emergency needs," said Aiken. "And the primary way to do that is to find a job and long-term employment."

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