A new report from the New School Center for New York City Affairs draws that conclusion. The way the state administers unemployment insurance is causing thousands of New Yorkers to receive less money each week than they would in New Jersey or other nearby states, the report warns.
The problem, according to New School economist James Parrott, is that weekly unemployment benefits are reduced 25% for every day a claimant works in a week. It does not matter the number of hours they work or how much they earn.
“Meanwhile, the rules require that you have to accept part-time work you are offered, unless there is a compelling reason not to,” Parrott said. “So people are taking part-time hours and losing benefits. That means there is less spending power in the economy.”
It is a rule unique to the region. A New York worker who is paid $15 per hour and employed 16 hours per week, spread out over three days, would receive a partial unemployment insurance benefit that is between one-third and half of what a similar worker would receive in New Jersey.
The pandemic has cut hours for many of the New Yorkers who avoided losing their jobs entirely. An estimated 370,000 workers statewide have been involuntarily shifted to part-time employment as of October, according to the report. The portion of New Yorkers receiving partial benefits because of part-time work reached a historical high of 23% in October, compared with 10% last year.
A bill from Sen. Jessica Ramos of Queens and Assemblyman Al Stirpe of Syracuse would base benefits on weekly earnings, rather than total days worked. Workers could earn up to half of their usual weekly unemployment benefits in wages before their payment would be reduced.
Parrott said such reforms have been discussed for several years, with support from Gov. Andrew Cuomo. But previous efforts were derailed by concerns the antiquated computer systems at the Department of Labor would require years to adjust to the new rules.
Those concerns proved warrant in the spring, when a sudden rush of unemployment claims crashed the state’s servers. But federal grants have since helped update the systems—which should allow for an update in how claims are paid, Parrott said.
The governor’s office did not immediately respond to a request for comment on the report.
The New School estimates that workers receiving up to 16 hours per week in work could pocket up to 200% more in earnings under the bill, between their weekly pay and unemployment benefits.
But the new rules also could raise costs by 4% to 6% for the unemployment trust fund—which is financed through payroll taxes—at a time when the state has already borrowed from the federal government to cover the unprecedented level of claims. That could prompt some lawmakers to proceed with caution.
Parrott said the report is intended to highlight the issue as the Legislature nears its new session next month.
“There has been a need to do this throughout the pandemic, but the Legislature basically hasn’t met since April,” Parrott said. “That need has grown as the economy gradually rebounds and the number of people working part time grows.”
You can view the New School report here.
SOURCE: Section Page News – Crain’s New York Business – Read entire story here.