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End Of Federal Unemployment Benefits Could Bring "Perfect Storm" For NYC's Most Vulnerable

By

Jake Offenhartz

Published Aug 26, 2021

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Pedestrians pass an office location for the New York State Department of Labor, in the Queens borough of New York. About 1.5 million laid-off workers applied for U.S. unemployment benefits last week, evidence that many Americans are still losing their jobs even as the economy appears to be slowly recovering with more businesses partially reopening. The latest figure from the Labor Department marked the 10th straight weekly decline in applications for jobless aid since they peaked in mid-March when the coronavirus hit hard. Still, the pace of layoffs remains historically high

 

Frank Franklin II/AP/Shutterstock

By

Jake Offenhartz

Published Aug 26, 2021

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Before the pandemic, Nedra Brown had no problem holding down multiple jobs. A single mom from Trinidad, she cleaned houses and provided childcare, cobbling together enough of a living to raise her daughter in the Bed Stuy section of Brooklyn.

But those jobs disappeared with the arrival of the coronavirus, as many employers left the city or sealed off their homes. Nearly a year and a half later, Brown, 44, is still struggling to find steady work.

But while the pandemic rages on, the federal unemployment assistance that Brown and so many others have relied upon is set to expire come Labor Day. Roughly 750,000 people in New York City will see unemployment benefits — often between $500 and $600 per week — disappear entirely, according to a new report published by the Center for New York City Affairs on Thursday.

For Brown, the cutoff will mean the end of a $300 weekly supplement that she spends on rent. She’ll be left with $182 per week in state unemployment.

“That’s all that I’ll have to rely on as a single parent of a 12-year-old,” Brown told WNYC/Gothamist. “How am I supposed to make it?”

The end of the federal unemployment aid comes at a perilous moment for the city’s most vulnerable. As local officials trumpet New York’s comeback, the delta variant has upended the return of many industries that were hardest hit by the first wave of the virus, and could cut the number of jobs the city hoped to add this fall by half.

Even as the state struggles to disperse federal rent relief, New York’s eviction moratorium will run out at the end of this month.

“We have kind of a perfect storm of these benefit programs either ending or slow going,” said Jason Cone, the chief public policy officer at the anti-poverty group Robin Hood. “We’re really concerned about what that means for people losing their homes, their ability to put food on the table.”

There are other signs that New York’s recovery is stalling. After months of steady growth, last month’s jobs report showed no seasonally adjusted employment increase for the first time since January.

At a time when New York City’s unemployment rate remains nearly twice the national average, some economists fear that the end of federal unemployment benefits — an estimated $2 billion monthly boon to city residents, and the economy at large — will have dire consequences.

“The unemployment benefits cliff is not well appreciated in New York City,” said James Parrott, an economist at the New School, who authored the Center for NYC Affairs report. “Otherwise city and state officials would be scrambling to have a more effective response to the unemployment crisis than what they’ve had so far.”

President Biden has encouraged states with high jobless rates to use federal aid to prolong some parts of the benefits program — including extensions for the longterm unemployed. But Governor Kathy Hochul has given no indication that she plans to do so. Inquiries to her office were not returned.

Recent studies have undercut the idea that slashing unemployment will send a flood of workers back to the job market. Instead, the benefits cutoff could lead to soaring poverty in low-income communities hardest hit by the virus, and persistent unemployment for years to come, according to Parrott.

He has recommended that the city tap into its $6 billion in federal stimulus funds to launch a large-scale wage subsidy program that would allow businesses to rehire tens of thousands of New Yorkers. But after speaking with de Blasio officials about it earlier this summer, the idea went nowhere, he said.

Bill Neidhardt, the mayor’s press secretary, described the wage subsidy program as a “great idea,” but said it was difficult to achieve at scale. He pointed to efforts with the City Cleanup Corps to hire 10,000 New Yorkers to beautify city streets as an example of direct action, and collaborations with the CUNY Career Initiative to speed up job placement.

Brown, the single mother, said she had little faith those programs would help her or her daughter. After testing positive for COVID-19 while visiting family in Trinidad, she has spent the week in quarantine, giving her plenty of time to consider how to make ends meet once the unemployment supplement disappears in two weeks. She expects she’ll soon have to move out of her apartment.

“A lot is happening at once, and we don’t know how long the pandemic is going forward,” she said. “It’s going to create big problems.”

Tagged

business

pandemic

coronavirus

Unemployment

economy

reopening

Jake Offenhartz

Jake Offenhartz is a former Gothamist reporter.

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Gothamist is funded by sponsors and member donations

Gothamist is funded by sponsors and member donations

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