No Relief for Children of the Jobless, Underemployed in N.C.

March 2013

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Harsh Cuts Loom as the Percentage of Children Affected by Parents’ Employment Woes More than Doubles

A new national report shows the number of children in North Carolina with an out-of-work parent has more than doubled since the onset of the economic downturn. One in 10 children in North Carolina lived in families with an unemployed parent during an average month in 2012, about 219,000 children across the state. When broader measures of underemployment are considered–such as the number of parents who were forced to accept part-time work; or those who wanted a job, but were no longer actively seeking employment–the number of children who were affected by their parents’ employment challenges last year was 379,000–more than one in every six children in the state.

Nationally, 6.2 million children–one in every 11 children in the country–had a jobless parent in 2012, up from just 3.5 million children in 2007.

Parental unemployment can have devastating long-term consequences for children and their families. Increased household tension and parental irritability can spillover into less supportive, more punitive parental behavior. Developmental psychologists have linked economic stress caused by parents’ loss of income to reduced outcomes for children including: lower math test scores, poor school attendance, behavioral issues, and an increased risk of being held back a grade. The adverse effects of parental job loss can persist well into a child’s adult life. For example, studies have shown that low-income youth whose parents lose their jobs are less likely to attend college and more likely to have lower earnings once they transition into the workforce.

The loss of parental employment is most damaging when it causes a family’s income to fall below the poverty line, or when parents remain out of work for extended periods of time. Among children with an unemployed parent in North Carolina, more than half (58 percent) lived in a household where their parent had been out of work for six months or longer. Children of the long-term unemployed face greater risk of poverty and financial hardship than children in families where unemployed parents are able to find work quickly. In fact, one national study found poverty rates more than triple for households with long-term unemployed parents.

Many families affected by unemployment often struggle to make ends meet without help from programs intended to aid jobless workers. In 2011, only 36 percent of children with unemployed parents lived in households that received unemployment insurance benefits, 29 percent received Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) benefits and/or benefits under the Temporary Assistance to Needy Families (TANF) program and the remaining 25 percent of children lived in homes that received no benefits at all. The fact that children with out-of-work parents are more likely to receive SNAP or TANF is cause for concern because these programs provide less financial support than unemployment benefits. In July 2012, SNAP monthly benefits averaged $278 per household nationally, less than the average weekly benefit provided by unemployment insurance benefits. Although TANF benefits vary substantially across states, the national average monthly benefit was $392 in 2010.

Recent changes to North Carolina’s unemployment insurance benefit structure mean more children of out-of-work parents in North Carolina are likely to slip through widening gaps in the safety net. The new law, which will take effect on July 1, 2013, reduces the maximum benefit amount from $530 to $350 per week, cuts the maximum weeks of benefits from 26 weeks to a sliding scale of 12 to 20 weeks and removes eligibility for benefits for workers who lose their jobs due to health or family reasons. These changes also cause the loss of an estimated $25 million dollars in federal funds per week that are currently provided to long-term unemployed (approximately 80,000 North Carolinians) through the temporary Emergency Unemployment Compensation program.

At a time when North Carolinians are still struggling to recover from the economic downturn (there are roughly three unemployed workers for every job opening in the state, and N.C.’s unemployment rate remains above the national average) these changes to unemployment insurance benefits scale back protections that help families meet their most basic needs and protect the well-being of their children. 

To read Unemployment from a Child’s Perspective, released by the Urban Institute and First Focus, visit: