Big Increase in Unemployment Could Tax State’s Resources
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
The newest fiscal crisis to confront legislators in Albany is rising unemployment throughout New York State.
In the first half of 2008, the number of New Yorkers without jobs increased by 56,000 and claims for unemployment insurance increased by between 20% and 25% versus the same period last year, according to a report released yesterday by the Fiscal Policy Institute.
The grim findings stand in contrast to those in the annual report of the Census Bureau, which found that the number of New York City residents living below the federal poverty line fell to 18.5% in 2007 from 19.2% in 2006. The chief economist of the Fiscal Policy Institute, James Parrott, said the differences in the findings concerned the periods of time analyzed.
The Census Bureau report offered “solid and important data, but that is about the past and our report is about what is going on today,” Mr. Parrott said.
The Fiscal Policy Institute report found that the rise in unemployment hit New York later than the rest of the country was affected.
Year-over-year job growth started to decline in early 2006 in America as a whole, while in New York job growth did not begin tapering off until the middle of 2007.
Currently, 500,000 New Yorkers are unemployed, the greatest number since 2004. Recent layoffs have been concentrated in the finance sector, construction, and retail.
According to Mr. Parrott, the state’s unemployment insurance system is ill-equipped for the increase in unemployment, which he says will continue to rise. Benefits are insufficient and not as widely available as they should be and the state’s unemployment insurance fund is underfinanced, he said.
The report recommends increasing the taxable wage base on which employers must pay unemployment taxes.