News From our Members

Unemployed Swamp Fund

New York spends $100M a week as Uncle Sam shores up plan; top benefit is one of nation’s stingiest.

By James M. Odato

Nancy Golin, unemployed the past two years, lives in modest quarters in Albany on an unemployment insurance check of $128 a week. That includes a temporary $25 stipend from federal stimulus money. It doesn’t pay the bills and she hopes a Legal Project lawyer can help her hold off creditors.

“I have prayed diligently,” the 59-year-old receptionist said recently at a Department of Labor job center. “I want to work. I really want to work.”

She’s among more than 500,000 New Yorkers causing a mountain of debt at the Labor Department. Even though they receive some of the smallest weekly checks in the nation for unemployment benefits, the state’s costs for the unemployed are expected to reach $5 billion and put the state $2 billion in the red by year end.

The state is paying $100 million a week from its Unemployment Insurance Trust Fund for claims, compared with $44 million a week last year.

The biggest check an unemployed worker can draw is $405, the same level it’s been for a decade. With the $25 stimulus boost, it still is one of the smallest maximum payouts in the nation.

The average check is $314, said Nancy Dunphy, deputy labor commissioner for employment security, which is the lowest average in the nation.

She says it’s time the rate was raised. The maximum has not increased since 1999, when it received a modest adjustment.

“It’s just not enough to meet the needs today,” Dunphy said. “We’re below most of the country — New Jersey, Pennsylvania and Connecticut are far above us in the range of $600, and in Massachusetts they have a dependent allowance and can add a bit more so it can go over $900 a week.”

She said because the maximum is so low, benefits collected by workers who lose lower paying jobs is also lower. Even with the stingy payouts, the state fund is insolvent because unemployment taxes are relatively light. The state taxes employers only on the first $8,500 of an employee’s salary. As a result, the state fund can’t build up the amount needed to supply the unemployed with the small sums available in New York.

“We have a taxable wage base that is frozen in time,” said James Parrott, a New York City-based economist with the Fiscal Policy Institute, a union-backed think tank.. “The fact that it is so low . . . leads to more job loss, a downward spiral.”

He said the weekly rate must be raised, which means unemployment taxes will rise, but increased jobless benefits will help stimulate the economy because the money is spent after it is received.

The checks were always meant to be economic stabilizers so that job loss doesn’t mean spending on consumable goods comes to a total halt .

Nancy Golen, who is at the Job Center regularly, isn’t stimulating the economy much. She’s borrowing from friends and getting help from her church for basic necessities while working out payment schedules with power companies. “I’m behind on everything,” she said. A $30 gas card from the federal government helped fill her fuel tank recently and was much appreciated.

Two matching bills aimed to address the situation. Labor Committee heads in the two chambers, Assemblywoman Susan John and Sen. George Onorato, had been hopeful of passage. Momentum for change was lost when Republicans staged a coup in the Senate.

The measure proposed would have raised the taxable wages in steps, starting this year at $9,500, $11,500 next year and $13,000 the next year. Parrott said $13,000 is already common nationally.

The maximum payout would rise in July to $475 and the minimum would be $75. The maximum would rise next July to $525; a year later to $575: and $625 in 2012. In 2013 and thereafter, the rate would be half the average weekly wage in New York.

The formula for people not making the maximum would result in higher payments for them, too. Even a small increase would be welcome, recipients say.

“I’ve been looking every day,” said Robert Cristo, 39, a writer and public relations officer out of work since October. He collects $336 weekly, including the $25 stimulus boost. “It’s demoralizing. I have to understand that it’s not all my fault. We are in a difficult situation right now and it is very difficult to get back into the job market right now.”

He said he’s lucky to be living in the Capital Region, because $336 a week in New York City would be nearly impossible to manage.

Dunphy said not only is the low rate hurting the economy, but it also cuts the amount of stimulus money flowing into the state because the federal aid is based on the payment rates . The state is expecting $400 million.

She said about a million different people would have received benefits this year as they enter and leave the system.

In all, the state owes $1.3 billion to the federal government through mid-June, one of 15 states that have borrowed $9.4 billion to meet unemployment insurance obligations. That’s behind Michigan’s borrowing of $2.18 billion and California’s $1.52 billion.

The good thing is the state won’t have to pay the federal government interest on the debt it is building to pay obligations. Under the stimulus legislation, states go without interest in 2009 and 2010.

The bad news is the state’s obligations will likely cause insolvency beyond 2010, Dunphy said, resulting in a need for “a special assessment on employers” to bail out the fund.

The Business Council of New York State objects to raising the taxes and the maximums as proposed, although the employers’ group said it would be willing to negotiate. Gov. David Paterson lists the issue as a priority.

The leading proposals in the Legislature, the council says, would hurt stable employers as much as those who commonly shed jobs.

The proposals would socialize the benefit and raise taxes for unemployment insurance 14.7 percent in year one alone, the group says.

Ignoring the Unemployed

Editorial

New York State has not increased its maximum unemployment benefit — a meager $405 a week — in a decade, and a drive to raise payment levels has been derailed by the legislative chaos in Albany. While the politicians squabble, victims of the economic downturn are struggling to make ends meet. The governor and legislative leaders should increase unemployment benefits without further delay.

New York State was once a leader in providing unemployment insurance. Now it is a laggard — nationally and in the region. Connecticut pays up to $576 a week, and New Jersey up to $584. Even with an additional $25 a week temporarily added by the federal stimulus program, New York’s payments do not begin to equal the cost of living in one of the most expensive states.

Bills have been introduced in the Legislature to raise the maximum benefit to $625 over the next few years, and then to index it to 50 percent of the average weekly wage. Indexing is necessary to ensure that benefit levels, never a legislative priority, do not fall behind again. Business interests have been fighting the raises, which would be financed by reasonable tax increases.

New York’s unemployment rate was 8.2 percent last month, a 16-year high, and the number of jobless people in the state is the highest it has been in 33 years. An adequate system of unemployment insurance, which is an important part of the social safety net, is particularly necessary now. It can also be a powerful form of economic stimulus since it puts money into the hands of people who can be counted on to spend most of it right away.

The State Senate’s recent escapades are interfering with important work for the people of New York. If the state’s elected officials want to show that they care about their constituents, and not merely their own power machinations, increasing unemployment insurance benefits would be a good place to start.

Amid Senate Chaos, Hope Fades for a Bill to Raise Jobless Benefits

By Patrick McGeehan

A campaign to increase New York’s unemployment benefits for the first time in a decade has been sidetracked by the political stalemate in Albany — possibly for the rest of the recession.

Despite having the support of the governor, labor leaders and advocates for the unemployed, a bill to raise weekly jobless benefits on July 1 and close the gap in the state’s unemployment trust fund was not addressed by state lawmakers before their regular session ended this week.

The maximum benefit, which had been $405 a week for about 10 years until the federal economic stimulus program temporarily added $25 a week, is significantly smaller than those available to residents of New Jersey and Connecticut. New Jersey’s maximum is $584 a week; Connecticut’s is $576.

Negotiations to make the bill more palatable to employers continued through the weekend, giving its supporters hope that Gov. David A. Paterson would present a compromise that could be enacted. But with party leaders distracted by the battle for control of the State Senate, no progress was made.

The issue was not among those taken up by the Assembly in the final hours of the session that ended early Tuesday, nor was it on the governor’s list of measures to be considered by the Senate in special sessions on Tuesday and Wednesday. The Assembly is not currently scheduled to convene until January.

The lack of action left advocates worried about the fate of the growing ranks of unemployed New Yorkers.

“Meanwhile, the unemployment rate keeps going up, and more and more people are losing their jobs,” said James Parrott, chief economist for the Fiscal Policy Institute, a research group that focuses on tax, budget and economic issues. “New York doesn’t look good compared to its neighboring states.”

Last week, the state’s Labor Department said that more New Yorkers were out of work than at any time in more than 30 years. For May, the state’s unemployment rate rose to 8.2 percent and the city’s hit 9 percent.

For certain groups, the situation is much bleaker, Mr. Parrott said. He said that the official unemployment data showed that more than 23 percent of all black men in New York City were either unemployed, working less than full time or had become too discouraged about their prospects to look for work.

With many economists forecasting that the national recession will end by late summer, the recovery could begin before additional relief arrived for New York’s unemployed.

The rapid rise in unemployment has also strained the state’s trust fund that provides the weekly benefits. The fund has been borrowing from the federal government to cover a shortfall this year.

To fill the gap, which is projected to grow through next year, the bill before the State Legislature would have increased the amount of a worker’s annual pay that is taxed. Only the first $8,500 is currently taxed to finance the unemployment insurance system, a much lower limit than those in New Jersey and some other states.

The bill called for annual increases in benefits, starting next Wednesday, July 1, that would raise the maximum weekly benefit to $625 and adjust it for inflation each year after that. Along the way, it would have also gradually raised the payroll tax that goes into the unemployment trust fund.

But representatives of employers, led by the Business Council of New York State, have opposed the bill, arguing that the automatic annual increases would make the payroll tax too onerous for some businesses. Last week, the Business Council called the legislation a “job-killing proposal” that would raise the tax by almost 15 percent in a year.

The governor’s office had signaled that it would create a revised bill that both sides could support, but hopes for a compromise before July 1 faded as the chaos in the Senate dragged on.

“It’s a big problem that we’ve fallen so short in terms of not doing this,” said Andrew Stettner, deputy director of the National Employment Law Project, which advocates for the unemployed. “What was nice about this legislation was it got the benefits out during the recession and it had a plan for paying back the fund over several years. It was a smart approach.”

Achievement through community schools at the heart of ‘Say Yes to Education’

by Sylvia Saunders - New York Teacher

NYSUT’s Dick Iannuzzi stops in at an after-school program where kindergartners work on math skills.
Left, student Genia Reed works with teacher Amy Vargason. Photo by Lauren Long.

It’s 4:20 p.m. on a Thursday at Dr. Martin Luther King Elementary School in Syracuse and the place is still bustling.

Every seat in an after-school computer lab is filled as a teacher and teaching assistant help eager youngsters.

Down the hall, students in various classrooms, working with a college-age tutor, practice math flashcards and count in Spanish. A chorus is singing an uplifting spiritual in the music room.

Students here, for the first time, are being exposed to new enrichment offerings: leadership classes, kung fu, yoga, step dance, African art and drumming.

In the health office, pediatric nurse practitioner Theresa Zimmer tends to an 8-year-old boy’s bleeding mouth, providing a salt water rinse and a warm hug of encouragement.

Dental hygienist Judy Morgillo urges him to stop wiggling that loose tooth with such gusto.

A social worker works the hallway, chatting with students and touching base with a colleague about a child’s progress.

In a little more than an hour, more kids and their families will arrive for Math Night. Their ticket to admission (and free dinner) is to look at some science project displays around the school and fill out an answer sheet about what they learned.

After hours of games that make math fun, students and their families head home at about 7:30 p.m.

It’s just another round-the-clock day at one of Syracuse’s Say Yes to Education buildings, where the term “community school” is the real deal. Tomorrow’s before-school programming starts at 7:15 a.m.

The extended day, extended year — extended everything — is a big part of the Say Yes to Education private foundation that has taken Syracuse schools under its wing.

At the heart of this pioneering program are two core components:

• A system that provides pre-K-12 kids and their families with intensive support — from extra tutoring to health services to pro bono legal advice — to help them succeed academically and graduate from high school, and …
• The ultimate commitment: the promise of free college tuition, fees and books for any student who earns acceptance to one of the participating public and private colleges.

Say Yes has succeeded with small groups of kids in select cities, but Syracuse is the first in the nation to launch it districtwide.

Dollars and a dream

Wall Street financier George Weiss founded Say Yes to Education in 1987 when he promised 112 economically disadvantaged sixth-graders in Philadelphia that he would pay for their college education if they graduated from high school.

Of the pilot group, 63 percent graduated from high school; about 39 percent received a post-secondary credential. (Just a year before, only 26 percent of the Philadelphia class finished high school.)

Since then, the philanthropic program has spread to several cities with selected groups of students in Cambridge, Mass., Hartford, Conn., and Harlem.

Say Yes has begun working with younger groups, offering an increasing array of support services — after-school programs, summer camps, mentoring, tutoring and other social, mental and health care programs students need to succeed.

After all, how can children concentrate on schoolwork if their family is getting evicted from their apartment, or if one of their siblings misses class because an asthma attack sent her to the emergency room?

The results have only improved, as Say Yes has modified the program to start earlier in a child’s life.

“We’ve learned that the earlier you start, the better the results,” said Say Yes President Mary Anne Schmitt-Carey. “In fact, we are convinced that our kindergarten cohorts have a good shot at leveling the playing field completely.”

The district is implementing the program gradually, adding several buildings per year, until 2011-12, when it’s operating in all 36 schools and serving Syracuse’s more than 20,000 students.

The higher education guarantee is open to all seniors who have spent the last three years in the district — and hundreds of students will go to a college in September.

“This is an extremely exciting and promising venture, demonstrating what’s possible when there’s true collaboration. NYSUT is proud to support STA in this endeavor,” said NYSUT president Dick Iannuzzi. He joined officials from the union’s two national affiliates on a recent Say Yes Labor-Management Day tour.

“This child-centered community school approach underscores the fact we must do much more than provide academic support,” he said. “We must tackle our students’ emotional, social and health care needs, too.”

The Syracuse effort is groundbreaking, he said, because it is a collaborative effort among teachers, support personnel, district administrators, city and state officials, the higher education community, local businesses, community groups and the private foundation.

“I believe you will get results because the plan will change the system for every child in Syracuse,” said National Education Association President Dennis Van Roekel. “I want this to work because I want there to be a model for every child.”

The American Federation of Teachers, led by Randi Weingarten, has made community schools a top initiative for reform.

“This program offers a wonderful vision of what it can look like,” said Joan Devlin, who heads AFT’s education issues department.

Union buy-in

“Since Day One, the Syracuse Teachers Association has been supportive and included at the table every step of the way,” Schmitt-Carey said. “The union really helped pave the way to make it happen.”

Collaboration, though a nice word, is hard work, said Syracuse TA President Anne Marie Voutsinas. “We all just want to do what’s best for the kids.”

Despite “bumps along the road” in the first year of implementation, negotiations have yielded some landmark arrangements, including an urban teacher calendar that compensates educators for extended hours during the school day and school year, and more time for professional development.

This summer, six Say Yes elementary schools will offer five-week academic enrichment programs. Instruction will be provided by teachers in the morning; college students will serve as “camp counselors” in the afternoon.

The union negotiated a provision to provide flex time for social workers and make them 11-month employees.

This made it possible for Say Yes to add a social worker in every building so individual caseloads would be fewer than 200 students. Organizers worked with the union to build in time for home visits by social workers.

Funding comes through a mix of local, state, private and foundation sources. More federal funding is possible since community schools are supported by the Obama administration.

Schmitt-Carey wants to make the program self-sufficient within six years. While the program’s extra support comes to about $3,500 per child per year, urban school districts typically spend $10,000 to $14,000 per pupil annually using state and federal funding for after-school, summer and mental health programs.

“The trick is to spend the money as effectively as possible,” she said. “We identify gaps and raise money.”

Thus far it’s a bit more private money than originally envisioned, Schmitt-Carey said, “But we have faith there will be future funding.”

So far, 24 private colleges and universities will provide scholarships to eligible graduates. SUNY and CUNY campuses are taking part with help from $1.5 million in community foundation funds.

Participating colleges require students to first tap all financial aid avenues, and some colleges require a $75,000 income cap.

Aside from providing scholarships, Syracuse University President Nancy Cantor is providing extensive technical assistance through SU’s Education Department faculty and students.

Say Yes has already prompted more families to move back to the city, according to Syracuse Superintendent Dan Lowengard.

“For sale” signs in the city now include the “Say Yes” logo as a visible reminder that things are changing in this city, where fewer than half the students graduate from high school and more than 78 percent qualify for subsidized school lunches.

“We knew we had to do something dramatic to change the entire system, not just tinkering,” Voutsinas said. “We knew we had to give our kids something big. It’s called hope.”

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.”