Starting this week, the first of more than 750,000 New Yorkers will begin losing a big chunk of the extended unemployment benefits they were counting on this year to weather unprecedented rates of long-term unemployment.
It’s all because Congress voted in February to cut the benefits early — despite detailed academic research showing that communities with benefits for the long-term unemployed recover faster than those without. New York’s maximum benefits will shrink to 79 weeks from 93.
New York offers 26 weeks of jobless benefits; after that the federal government picks up the payments. The duration of extended benefits available by state is determined by multiple factors, including the state’s unemployment rate and whether it is higher than it was three years earlier. (New York’s rate is lower.)
Despite the improved rate, displaced workers are becoming a new underclass created by the Great Recession, which is driving more New Yorkers below the poverty line.
A look at the Food Stamp rolls shows just how many more locals are struggling simply to put meals on the table. Since 2006, before the recession hit, the number of Food Stamp recipients in New York City has skyrocketed by 700,000, or 62 percent, to a total of 1,823,149 in the first quarter of 2012, according to data from the Fiscal Policy Institute.
“We may be in a recovery, but the unemployment crisis hasn’t moderated,” says James Parrott, chief economist at the Fiscal Policy Institute. “At this rate, poverty will continue to increase.”
The problem is that while New York has added jobs, many of them are low-wage positions, and the average hours worked per week is far lower than before the recession.
What’s more, the share of those unemployed more than six months has vaulted to an unprecedented 50 percent, Fiscal Policy Data show.
According to a new study, even when the unemployed workers do find jobs, they can’t earn what they were making previously.
A Rutgers University report tracked unemployed workers for two years, uncovering sobering results. More than half of respondents who found work settled for lower pay, and almost one-third had reduced benefits. A wide majority of respondents said they had cut back on food and health care so steeply that it made a difference in their daily lives, and borrowed money from family or friends just to make ends meet. Most believe their new, lower standard of living will be permanent.