Governor Kathy Hochul is under growing pressure to extend unemployment benefits across the state, amid a looming federal deadline that will soon cut off pandemic financial assistance to more than a million New Yorkers.
Three key unemployment programs, which have pumped roughly $3 billion a month into New York City's economy alone, are set to expire on September 5th. While President Joe Biden has urged states with high jobless rates to extend the programs, Hochul has not yet staked out a position.
"We will have more to say on this soon," a spokesperson for Hochul wrote in an email to WNYC/Gothamist. "No decision has been made at this time."
Earlier this week, New Jersey Governor Phil Murphy said the enhanced benefits would expire on schedule. To date, no state leaders have indicated that they plan to extend the programs.
But behind the scenes, some of New York's most powerful unions, backed by top Democratic lawmakers, are pushing the new governor to act — cautioning that the approaching cutoff could deal a heavy blow to the state’s fragile economic recovery.
As of last month, New York’s unemployment rate ranked second highest among all states, driven by a citywide rate of 10.5%, nearly double the national average.
In an internal memo circulating among legislators, the influential Hotel Trades Council, which represents hospitality workers, warned of a "shock to New Yorkers and the overall state economy" once the benefits expire next week.
“There’s going to be hundreds of thousands of people who fall off a cliff on Monday,” an HTC official predicted, noting that more than half of the union’s 35,000 members remained out of work. Members of the New York State AFL-CIO have also begun to lobby lawmakers, sources said.
One option under considerations would involve unfreezing the $504 weekly cap on state unemployment — replacing some or all of the $300 weekly supplement provided by the federal government. The funding would come out of the nearly $22 billion in stimulus money the state received earlier this summer.
But lifting the current cap would require state legislation. As lawmakers returned to Albany on Wednesday for an “extraordinary” special session to pass a new eviction moratorium, some discussed the possibility of reconvening once again to deal with unemployment benefits.
Others, including Senator Michael Gianaris, the Deputy Majority Leader of the State Senate, believed such an extension could be achieved by Hochul and the Department of Labor without legislative action. "But I would support it being done any which way," Gianaris added.
The programs that are poised to end next week include the Pandemic Unemployment Assistance used by gig workers and self-employed; the Federal Pandemic Unemployment Compensation, a $300 weekly supplement on top of state benefits; and the Pandemic Extended Unemployment Compensation, which provides an additional 13 weeks of benefits to those who’ve exhausted their state benefits.
In a letter published last month, Janet Yellen, the US Treasury secretary, and Martin Walsh, the Secretary of the Department of Labor, said that some states should consider prolonging benefits, particularly for the long-term unemployed in areas with high jobless rates.
Many in New York’s business community, meanwhile, are eagerly awaiting the end of enhanced benefits, which they claim have incentivized workers to stay home. According to Kathryn Wylde, the CEO of the Partnership for NYC, the labor shortage has hit the city’s small and family-owned business hardest
But economists have also pointed out that New York’s recovery has been uneven, with several industries, such as the hospitality and arts sectors, still struggling to come back. An estimated 542,000 jobs across the city have disappeared since the start of the pandemic — many of which may not return for years, according to Wylde.
“From the business standpoint, the wise thing to do with federal funds would have been to develop a strategy around the permanent changes in the economy that are going to take place post-COVID,” Wylde noted. “Unfortunately, that hasn’t been a big focus.”
Jo Ann Bullard, a 59-year-old Bronx woman, is one of roughly 750,000 city residents who will see their benefits disappear entirely next week. A former human resources manager at a small non-profit, she has sent over 600 job applications since the start of the pandemic, she said.
Those that have responded have offered only temporary positions without health care, a requirement for Bullard, whose husband is suffering from long-term symptoms of COVID-19. Together, they’ve received a total of $700 per week under two federal unemployment programs, both of which are set to expire without state action.
In recent weeks, Bullard has started tweeting and emailing Hochul’s office, but has not yet received a response.
“I’ve exhausted my savings, my 401K, we live unemployment check by unemployment check,” Bullard said. “We’re concerned, and it’s starting to feel like no one gives a crap about us.”