Just as the recession is throwing people out of work at an alarming rate, the unemployment insurance system in New York and many other states will start cutting off benefits this week for thousands of people who have been unable to find jobs since early last year.
About 50,000 New Yorkers who had been collecting unemployment checks for 11 months – the longest stretch that benefits have been available since the last recession eight years ago – will stop receiving weekly payments this week, according to the State Labor Department.
In normal circumstances, people laid off from full-time jobs can collect benefits for up to 26 weeks, after which they fall off the rolls. But some of the people who will lose benefits this week have been on unemployment for 46 weeks because Congress approved extensions of jobless benefits twice last year.
This will be the first time since the early 1990s that workers are exhausting benefits that have been extended twice because of an economic downturn. The inability of those people to find work after so many months provides a stark reminder of the weakness of the job market, officials and experts say.
For many of those facing the loss of that lifeline, the next step may be welfare, experts say.
Julio Ponce, a 55-year-old chef, has been using his weekly $352 unemployment check to pay the rent on his apartment in the Bushwick section of Brooklyn since he lost his job at a center for the elderly more than a year ago. But he said he did not know how he would cover the $800 monthly rent after his unemployment benefits lapsed this week.
“No one is helping me,” said Mr. Ponce, who was faxing his résumé to hotels and restaurants from an employment office in Downtown Brooklyn on Thursday. “I’ve applied for public assistance, but I don’t think I’m going to get it.”
Extended benefits are also about to expire over the next week or two in Massachusetts, Texas, Virginia, Pennsylvania and at least 20 other states, according to the National Employment Law Project, a nonprofit organization that advocates for lower-wage workers. No official estimates exist for how many people would lose their benefits in those states, but experts said it was likely to exceed 200,000.
In Philadelphia, Tony Green, 38, said he was due to collect the last of his checks by Jan. 25. His twice-extended benefits have amounted to $470 a month after taxes, forcing him to give up a rented house in the Fox Chase section of the city and move with his two teenage children to a place in North Philadelphia that he described as “drug-infested and dirty.”
Mr. Green said he had sold his car and borrowed more than $10,000, mostly on “maxed-out” credit cards. He has been taking construction jobs to supplement his benefits, but said he feared the extra income would dry up as the economy contracted.
“People are really tapped out,” he said.
Unemployment insurance, a federal system that is administered by the states, was intended as a stopgap, half-year source of relief, not a long-term source of income. But last year, as the economy slumped and the unemployment rate rose, Congress approved two extensions of jobless benefits, one for 13 weeks and the second for up to 20 additional weeks. The national unemployment rate rose again in December to 7.2 percent, a 16-year high, the government reported Friday.
However, New York and about two dozen other states have not yet qualified for the full 20 weeks of the second extension, because their jobless rates have been lower than other states. The latest extension was limited to seven weeks in states where the unemployment rate had not averaged at least 6 percent for three consecutive months. New Jersey and Connecticut have already qualified for the full extension.
New York’s unemployment rate has been rising in recent months, surpassing 6 percent in November. But the rate will have to jump again this month for workers in the state to qualify for the full 13-week extension.
The formula for triggering the availability of more emergency benefits has left New York’s commissioner of labor, M. Patricia Smith, in the odd position of rooting for a higher jobless rate.
By PATRICK McGEEHAN and MATHEW R. WARREN
Published: January 11, 2009
Source: The New York Times