January 24, 2014

Changes in unemployment laws are
make winter rougher for islanders


Fran Davis does what she has to do to collect her meager unemployment check, but she knows at least one requirement is a waste of time.

“They’re telling us we have to do two job searches a week,” Davis, a 69-year-old unemployed cottage cleaner from Frisco said. “But nobody is hiring.”

To qualify for weekly state unemployment benefits, an applicant must show that at least two employers per week have been contacted – a way to prove that an effort is being made to find work. But of course, there are virtually no jobs to be had after Thanksgiving on the Outer Banks.

It used to be that the job search requirement was at least informally waived for seasonal Outer Banks workers. The accepted reality is the tourism-based economy is dead in the winter until everyone starts gearing up in March for the return of visitors.  

Now applicants like Davis must call two of the few businesses that are still open and ask about work. Every week, she knows what the answer will be, but she carefully records the name of the business and what the response was.

The job search requirement is being strictly enforced as part of changes in the state unemployment law passed last year that also slashed the amount and number of weeks available to unemployed workers. Long-term jobless people also lost extended benefits that had been provided by the federal government.

Davis, who has worked for Hatteras Realty for 17 years, said that her weekly benefit is about one-third of what she had received before the cut.

“She said, ‘You’re going to make $46 a week,’” Davis said, recounting her recent phone conversation with the unemployment office in Raleigh. “And I thought, ‘That’s not even worth messing with.’”

But every little bit counts, she said. Davis added that she is allowed to make $9 a week to supplement her benefit check without affecting the amount. A widow for 23 years, Davis said she would not be able to make it without her Social Security check and help from her boyfriend and her family.

Allen Burrus, vice-chairman of the Dare County Board of Commissioners and owner of Burrus Red & White grocery store in Hatteras, said that he gets calls at the store every day from unemployed workers looking for work, mainly because he is one of the few businesses still open.

Burrus said that a lot of out-of-work locals who filed for benefits after New Year’s Day have been shocked to see how little they’re going to be able to collect. With required waiting periods and confusion about the changes, some have yet to collect any check.

Under the state law that went into effect July 1, the highest weekly benefit has been pared down to $350, from a maximum of $535.  Many seasonal workers did not earn enough to qualify for the highest amount. The number of weeks has also been decreased from 26 to as few as 12.

The financial stress on the island has “been pretty substantial,” Burrus said, especially added to hits on family budgets from the government shutdown and the bridge closure.

“We’ve met some people with some significant economic problems,” he said. “It hurts small businesses, too.”

Collecting unemployment in the off-season on Hatteras Island has been the way year-round residents have been able to survive in the winter months, at least since tourism has replaced fishing as a main source of income for the island’s economy. The weekly unemployment checks provided a cushion that kept the refrigerator stocked and the rent paid.

With empty pockets, Burrus said, residents can’t buy anything beyond the barest staples, and a number of them can’t even pay their bills. The end result is that everyone in the economic spectrum suffers, but especially the ones at the bottom.

“The food banks are trying to help, but there’s a limit to that,” he said. “What’s happening is they’re eating a lot more rice and beans and trying to make it.”

But desperate finances are not limited to Hatteras Island, said Jay Burrus, director of Dare County Department of Health and Human Services.

“Honestly, I’m seeing impacts from unemployment throughout the county,” he said. “More people are coming in to us for emergency needs – rent, power bills, medications. We have seen increases in applications for public assistance and Medicaid services in the last three months.”

Burrus said that the department does not track the numbers by areas where they are generated in the county.

According to statistics provided by the department, in November alone there was a 53 percent increase over last year in Medicaid and N.C. Health Choice applications. In October, November and December, there was a 23 percent total increase in applications for food and medical assistance over the same period in 2012.

Between 2005 and 2012, the number of applications for food assistance in Dare County has increased 83.9 percent. In October and November, the applications for food assistance over 2012 decreased 14 percent and 15 percent, respectively. But in December, right after most jobs dried up in the county, the applications shot up 23 percent over December 2012.

“It’s definitely possible it could be tied to that,” Melanie Corprew, the department’s assistant director said about the seasonal spike in unemployment.

Walton Fulcher, the director of the Cape Hatteras United Methodist Men’s Food Pantry and Emergency Assistance Program, said that he is starting to see more requests for help.

“It is picking up now, yes, within the last month,” he said. “There are a number of people who are trying to find work and can’t find it.”

From July 2012 to July 2013, the group provided emergency assistance to 204 families. The food pantry was used 1,291 times, helping a total of 3,871 people.  

With a debate going on in Congress about renewing the federal extension for unemployment benefits – that expired in July in North Carolina – the state is getting national media coverage about the impacts of cuts in unemployment. The state’s seasonally adjusted unemployment rate has dropped from 8.8 percent to 7.4 percent, raising questions about the effectiveness of North Carolina’s policies.

According to a Jan. 21 article in the New York Times, some experts credit the big drop to the lack of the “safety net” inspiring the jobless to looking harder to find a job. But most economists attribute the decrease in the state’s unemployment rate to jobless workers seeing the search as hopeless.  

“North Carolina still has nearly 350,000 listed as officially unemployed, and many more, including those living in depressed rural areas, have given up even looking for a job,” the article said. “For them, the safety net is gone, and largely out of sight, countless families have slipped deeper into poverty.”

In Dare County, the not seasonally adjusted unemployment rate is 8.4 percent.  

Although Dare is not a poor county, much of its population is employed in the seasonal service industry. There is a fine line between making it and not in the off-season for many people, and when there is no work to be had, receiving $40 in unemployment benefits a week compared with the $200 a person used to get makes a big difference in the quality of life.

And this year has been especially difficult for islanders.

“As soon as the bridge closed, everybody closed up,” said Salvatore Palazzolo, an owner of Nino’s Pizza in Avon. “There’s, like, two jobs.”

Even though most of his competition had already shut down, there were fewer customers at his business than usual at year’s end, he said.  Nino’s closed at the end of December and will reopen in March.  

Palazzolo, who has lived here since 1981, said that employers have not only lost business related to the closures and the weather, they’ve also been stretched by having to pay more for property and health insurance and by the higher cost of living. And the public perception of the island’s risks, he worries, could impact future tourism traffic.

“It kind of scares people to come down here,” he said. “Hopefully, next year won’t be like this.”

If some year-round residents are forced to leave the island because they can’t make ends meet, it will add another burden to the employers who have depended on reemploying the same trusted staff year after year.

“All of a sudden, I don’t have that person,” said Tony McGowan, owner of Down Creek Gallery in Ocracoke. “It puts a pretty big burden on the small businesses that rely on seasonal help.”

Workers may have to be brought in to fill the need – even from international markets – and the employer will have to train them. But with unemployment checks, local workers can afford to wait out the winter until it’s time to prepare for the tourists.

It’s been the way of life, whether it’s right or wrong, that’s the way it’s been,” he said. “To take that away . . . it’s going to put a lot of people in jeopardy.'

McGowan, who has run businesses on the Outer Banks for 35 years, said he has one loyal employee who has been with him for more than nine years straight. This year, she is going to have to rent a room in her house in order to make ends meet.

“Think about the trickle-down effect of that,” he said. “They don’t have the money to spend at the grocery store. They’re loading their credit cards with debt. It’s not a good scenario.”

McGowan said that it’s shortsighted of the state to cut off help for a seasonal workforce that supports a huge part of the state’s robust tourism industry. He also said it is unrealistic for policy makers to think that jobs can be readily created on the barrier islands to employ workers in the off-season.

“No private individual is going to come in here. I think it’s folly,” he said.

 “I’d hate to think we’d have to hire foreigners because locals can’t afford to live here.”  

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