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Should Gov Pataki Extend Unemployment Benefits by Another 13 Weeks now?

Yes, there are still alot of people out of work
Yes, if it does not raise UI Business tax rate
No, New York can not afford another UI Extension
No, $$ the Federal Govt gave to NYS for another Extension should go to lower taxes

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For 100,000 Without Jobs, Time and Aid Are Almost Up

New York Times, 6/10/02

Over the next two weeks, as many as 100,000 jobless New Yorkers will lose their economic lifeline: temporary unemployment benefits.

Congress created the benefits in March to help unemployed workers who had used up six months of regular state unemployment payments and had not found a job. The federally financed program gave them an additional 13 weeks of benefits.

But for the first New Yorkers who signed up for the program — 100,300, according to federal data — those 13 weeks are almost up. New York has the largest number of people coming off the rolls but, unlike other economically depressed states, including California, it does not qualify for an additional federal extension that gives the unemployed up to a year of payments.

The prospect of thousands of unemployed New Yorkers suddenly losing their income is alarming food banks and social service agencies, and concerning economists who track the region. It has caught the attention of some lawmakers in Albany. And it promises to become an issue in the state's gubernatorial race.

But the people most deeply concerned about the loss of benefits are the unemployed themselves, people like Miriam Engstrom of Queens. Mrs. Engstrom, who worked in the Internet division of a financial firm, has been jobless for a year, despite a diligent search and a willingness to take pretty much any job.

She said that like many of her friends in their 30's, 40's and 50's, she has been living off her savings and unemployment insurance payments, which will run out within weeks.

"We've always saved for a rainy day, but I think this could very well go into next year," she said. "Then what?"

Congress created the unemployment insurance system after the Great Depression, to help people who lost their jobs through no fault of their own. The regular programs are run by each state and financed by taxes on employers; in New York, the unemployed receive a maximum of $405 a week for up to 26 weeks.

But during recessions, Congress has often created a temporary, emergency unemployment insurance program, as it did in March. That program gave 13 weeks of federally financed benefits to the jobless in every state.

In New York, 137,000 people are now enrolled in the temporary plan. A State Department of Labor spokesman, Robert M. Lillpopp, said officials believed that at least some people who signed up for temporary benefits eventually found jobs, but he added that they did not now how many.

Roughly 191,000 people are receiving regular benefits and will be eligible for the temporary program if they exhaust them. Half of the New Yorkers who go on unemployment have been exhausting their benefits this year, according to data from the federal Department of Labor.

Congress also said states could become eligible for 13 more weeks, but only if the number of people receiving unemployment benefits rises sharply and averages 4 percent of the labor force.

In Oregon, which got the second extension, the "insured unemployment rate" is 4.7 percent and the regular unemployment rate has been about 7.8 percent.

In New York State, by contrast, the unemployment rate is 6.1 percent and 3.3 percent of the labor force is receiving unemployment, according to the federal Department of Labor. State officials do not think it will go high enough to qualify for an extension, Mr. Lillpopp said.

Unemployment in New York is heavily concentrated in New York City, where in April the unemployment rate rose to 7.7 percent, after seasonal adjustments. But in the rest of the state, the rate is just 5 percent, significantly below the national average, 6 percent.

Congress is unlikely to come to the rescue of unemployed workers in states that do not qualify for the automatic extension, said Wendell Primus, director of income security for the Center on Budget and Policy Priorities, a Washington research group. One reason is that in May, the states received $8 billion from the federal unemployment fund, money that could be used to extend benefits.

But New York has spent its share — $491 million — to pay for regular benefits and to repay a $189 million federal loan it took out in January when the unemployment fund ran out of money, Mr. Lillpopp said. Any effort to extend benefits at the state level would "immediately undermine the integrity of the U.I. trust fund, which has already been negatively impacted by Sept. 11," he said.

Employers would also vigorously oppose a state extension, said Matthew Maguire, a spokesman for the Business Council of New York State.

Nevertheless, legislators are working on a bill that would use state money to extend benefits to those who have exhausted the federal program. "We're trying to get our ducks in a line as quickly as possible," said Catherine T. Nolan of Queens, chairwoman of the Assembly's Labor Committee. The legislative session is to end in about a week.

Advocates of a state-financed extension say that New York could spend money now in the fund — about $800 million — take out another loan, or enact a temporary tax increase, as Minnesota did.

"It's a matter of priorities," said Maurice Emsellem, director of public policy at the National Employment Law Project.

Andrew M. Cuomo, who is seeking the Democratic nomination for governor, said on Friday that he supported an extension, and criticized Gov. George E. Pataki for allowing the unemployment fund's reserves to fall to very low levels during the economic boom. "Since being in office, the governor has done nothing less than mismanage the state's unemployment insurance fund, and the consequences are severe," Mr. Cuomo said in a statement. A spokesman for H. Carl McCall, Mr. Cuomo's Democratic rival, did not respond to a request for comment.

In response to Mr. Cuomo's comments, Mr. Lillpopp said: "Andy sat at the right hand of his father as they drove New York's jobless rate up to 7.8 percent, lost hundreds of thousands of jobs and borrowed more than $715 million for the federal U.I. trust fund in the last two years of their administration alone."

History suggests that people who exhaust their emergency benefits during a recession have a hard row to hoe. In the early 1990's, almost a quarter of those whose benefits ran out were unable to find a job within three years, said Walter Corson, who directed a study of emergency benefits by Mathmatica Policy Research Inc. for the federal Department of Labor.

A study done in 1994 by the New York State Department of Labor after the last recession found that about 6 percent of people whose benefits ran out filed for bankruptcy, and 26 percent said they were receiving some kind of public assistance.

That may well happen again, said Mark Levitan, a senior policy analyst for the Community Service Society of New York. "The first safety net, unemployment insurance, is ripping apart," he said. "Next comes the welfare system."

Food pantries are already experiencing a surge in demand from the unemployed, said Lucy Cabrera, president of Food for Survival, the city food bank. "We're worried about what we're going to be seeing in the next few months," she said.

And the presence of so many workers without income could affect the city's economic recovery, said Mark Zandi, chief economist for, a firm that specializes in regional studies. "It suggests that the city's economic adjustment still has a way to go, and that the drag on the economy really hasn't been felt yet," he said, adding that he expected the city's unemployment rate to continue to rise for most of the year.

That's bad news for Krystyna Walter, a consulting engineer who just turned 60 and was laid off Nov. 1. Ms. Walter has about nine weeks of temporary benefits left, but said she would like an additional three months to get through the slow summer hiring months.

"Nothing is happening in the city — this is really scary," she said. "Time is running out extremely fast."

An Idea, at Least, Amid the Job Hunting

New York Times

You work your whole life in this city, filling out your taxes and voting, and when you need help, you don't get it."

Those words belong to Carmen Torres, who spent 22 years working as a clerk on Wall Street before being laid off last fall. She has not been able to find another job, and fears that her unemployment insurance benefits may have just run out.

You'll hear the same sad refrain from Milind Shah, a former dot-commer whose benefits will run out in two months. And from Clayre Schneiweis, who until October had been working in New York City for El Al, the Israeli airline. And from Orlando Godoy, René Sauvé, Sultan A. Salim and James S. Johnson, all of whom worked at Windows on the World, none of whom has been able to find a new job.

All of them want, quite desperately, to be employed. Failing that, they would like another couple of months of unemployment benefits, which will start running out in two weeks for thousands of New Yorkers.

And so all of these jobless workers, and hundreds of others, have joined the New York Unemployment Project, a nonprofit group that is trying to persuade state officials to give the jobless 13 more weeks of unemployment benefits, an idea that does not seem to be on Albany's radar right now.

Jonathan Rosen, the director of the project, said that such an extension would cost about $235 million, which he contends could probably be covered by money already in the state unemployment insurance trust fund.

Unemployment insurance typically runs for a maximum of 26 weeks, but in March, President Bush authorized a federally financed 13-week extension. Right now, more than 230,000 New Yorkers from across the state are collecting regular benefits, and almost 137,000 are collecting extended benefits, according to the New York State Department of Labor.

The whole point of unemployment insurance is to tide over unemployed workers until they can find new jobs. But right now, there are an awful lot of unemployed people, and a lot fewer jobs than just a year ago.

About 263,000 people in New York City are actively looking for work, a 43 percent increase from a year ago, according to the labor department. The unemployment rate in the city has zoomed to 7.7 percent, from 5.5 percent a year ago.

Meanwhile, there are now about 107,000 fewer jobs in the city than a year ago, according to a government survey of employers. The biggest losses have been in business services (Mr. Shah, the computer expert); brokerage firms (Ms. Torres, the Wall Street clerk); air transportation (Ms. Schneiweis, the airline worker), and food service (the Windows on the World crew).

Sitting in the unemployment project's office on the Avenue of the Americas last week, these jobless workers described the frustrations of their fruitless hunts for work. All have been attending job fairs, which entails standing in lines for hours to watch their résumés disappear into huge stacks. At least one is living off credit cards; others are borrowing from family and friends.

Mr. Sauvé, who is 59 and lives in Manhattan, says he has given out 200 résumés, and has even had some phone interviews. "But the minute I show up and they see how old I am. . . ." he said, shrugging. "I tell you, if I didn't have a rent-controlled apartment, I'd be homeless."

Ms. Schneiweis, who is 49 and lives in Queens, is getting by on her unemployment and the money she got from selling her two-year-old Honda. "I'm willing to start at entry level, but they won't take you," she said.

Things aren't much better for younger workers like Mr. Shah, 27, who says that he has given out résumés and canvassed his friends and connections to try to find a job. "But most of my connections are unemployed, too," he said, adding that his wife still has a job, "so I won't be out on the street, but it's very scary."

Tell that to Mr. Salim, 36, whose family includes his 2-year-old daughter and elderly father. When his benefits run out in about a month, he said, "I have no idea what I'm going to do."

Mr. Johnson, 43, is taking computer classes, but still longs for his old "sweet job" as a bartender at Windows. He still has a card in his wallet from the restaurant, where at least 70 workers died. And while he's sad and angry that he and so many of his co-workers are still unemployed, he reminds the others that "some of them are not here to complain."

Jonathan Rosen
New York Unemployment Project
121 Ave. of the Americas, Suite 507
New York, NY 10013
tel. 212.625.0288
fax 212.226.6817
If you think the system is working, ask someone who isn't

Call at (212) 625-0288 today!