NYS AFL-CIO President Hughes On State Unemployment Insurance Legislation: NY’s Inaction Means Benefit Level Remains Lowest In Nation

Written by Administrator
Wednesday, 20 May 2009
New York State AFL-CIO President Denis Hughes today issued this statement following the state’s passage of Extended Unemployment Benefits (A8273/S4110):

Thanks to leadership from the Obama Administration, New York State has now added an additional 13 weeks of extended unemployment insurance benefits. This means thousands of individuals who have been victimized by the current recession and were on the verge of exhausting their unemployment benefits will continue to be eligible for unemployment in the near term. Congress and the Obama Administration’s swift and decisive action with regard to economic stimulus and unemployment benefits were intended to jump-start the economy and spur the states into action of their own.

Unfortunately, Governor Paterson and the State Legislature have yet to build on the President’s initiative by enacting necessary reforms at the state level. This includes increasing the state’s embarrassingly low maximum benefit, indexing that benefit and restoring our chronically underfunded Unemployment Trust Fund to solvency.

The New York State AFL-CIO looks forward to working with our state elected officials to improve our benefit, which ranks 2nd to last in the Nation in terms of wage replacement, and is the lowest of all of our surrounding states. The current maximum benefit of $405 per week has not been raised in a decade and amounts to just over $10 an hour, one of the lowest in the Nation. It is also important to increase the low unemployment premium paid by employers that has left our Unemployment Trust Fund insolvent, forcing New York to borrow an average of $90 million per week in order to fund our sub-par benefits.

Our unemployment system is set up to help struggling Working Families make ends meet when the economy cannot produce jobs. As a result, and in addition, the system has a great impact on the state’s economy as a whole. For example, unemployment insurance benefits provide Working Families the money needed to pay the mortgage, so in effect it helps our banks. The system provides recipients with money to help buy groceries and other necessities, so it helps our retail and Mom and Pop stores. And it helps our overall economy during a recession because it increases the tax base of our local communities when unemployed workers spend their unemployment benefits at the aforementioned local retail outlets.

Unfortunately, the Federal Government cannot do everything. Thanks to President Obama and Congress, the Federal Government did its part to help the unemployed. During the Great Depression it was the combined efforts of President Roosevelt and Governor Lehman that helped working New Yorkers. Now, we need our Governor and state legislature to take action themselves on the issues that only they can fix.

This includes an immediate increase in the maximum benefit rate of $405 per week to 50% of the average weekly wage. It means indexation of this benefit, so that Working Families who are victimized by a recession never again have to face a benefit structure that is outdated, and subject to the political whims of the times.

And finally, we need to be responsible and pay for this benefit, slowly and gradually increasing what employers pay, so that never again is the state forced to borrow billions to pay for those benefits. In the long run, this will save employers and taxpayers millions of dollars.

The New York State AFL-CIO is willing to continue to work with Governor Paterson and both houses of the legislature to pass meaningful Unemployment Insurance legislation that accomplishes the goals of helping individuals who have been victimized by the current recession, and bringing our economy out of this historic economic downturn.”