Jobless benefits must be raised
It doesn’t matter how hard you work or what you do for a living — anyone can lose their job. Each of us are just one economic downturn, one corporate restructuring, or one stock market dip away from getting that dreaded call from HR.
Every year, roughly 400,000 New Yorkers lose their jobs through no fault of their own. That’s where unemployment insurance is supposed to come in, as a short-term safety net to ensure that losing your job doesn’t mean losing your home. But with the maximum unemployment benefit capped at just $504 per week and with a two-week penalty imposed on striking workers, New York’s unemployment safety net lets too many people fall into poverty. It’s a problem we must urgently fix.
Unemployment benefits don’t just protect workers that lose their job due to shifting economic factors. While most workers would rather stay steadily employed, the reality is that many people work in industries like hospitality, food service, retail and construction that are at the mercy of mass seasonal layoffs happening every year.
Unemployment provides no more than 50% of your prior income for a maximum period of up to six months while you search for a new job. Unemployment is a temporary stopgap intended to hold you over until you land a new job or the slow season comes to an end.
The problem is that the benefit is capped at only $504 per week. That’s well below New York’s minimum wage, and it isn’t nearly enough to get by on. With the average rent of a New York City studio apartment at $3,600 per month, unemployment checks don’t come close to covering rent for most residents, let alone the cost of groceries, utilities, healthcare, and other expenses that don’t go away just because your job did.
Katherine Garcia, a room attendant at the Conrad Downtown, knows this struggle firsthand. She’s worked at the hotel for seven years and every year she has endured seasonal layoffs or reduced hours.
Katherine’s unemployment benefits during these periods aren’t enough for her and her children to survive on. She supplements her unemployment check with food stamps and makes tough choices like cutting off phone and internet service to reduce expenses. But despite her best efforts, facing yearly seasonal layoffs has caused her to fall behind on rent payments and take on more credit card debt so even when she’s back at work she can never seem to catch up.
Our maximum rate of $504 a week is substantially less than every other state in the region. It’s less than half of the $1,033 unemployed workers get in Massachusetts and significantly less than the $854 and $796 that workers in New Jersey and Connecticut receive. As the state with the third-highest Gross Domestic Product in the nation, there is no good reason for New York to have such outrageously low unemployment benefits.
Making matters even worse, there is a union penalty built into the system. When union workers are out of work because of a strike to demand fair wages or to protest mistreatment, they are forced to wait an additional two weeks before becoming eligible for unemployment benefits. That means they have to wait nearly a month when you add in the one week waiting period all workers have. The last thing we should be doing is punishing people who are out of work because they are standing up to injustice on the job.
Albany has the power to right fix this problem. Lawmakers can eliminate the union penalty and they can surely increase unemployment benefits to a level that provides real financial security. In fact, a 2019 law called for regular increases that would have resulted in a maximum weekly benefit of $755 today. Unfortunately, those increases were suspended after the pandemic, due to a provision in the law that canceled increases whenever the Unemployment Trust Fund is distressed.
If the benefit were increased it would have no impact on what employers are already obligated to pay this year, next year, or for many years to come. The taxes that New York employers pay toward unemployment are already capped at a level that is among the lowest of any state in the nation.
Doing nothing can no longer be an option — not when so many New Yorkers are faced with a safety net that won’t support them.
Losing your job is hard enough. Having to survive temporary unemployment without a real safety net is a risk no one should have to take.
Maroko is president of the NY Hotel & Gaming Trades Council. Cilento is president of the New York State AFL-CIO.