New York State AFL-CIO Responds to State Department of Labor's Announcement of Rise in Unemployment Rate

President Hughes Calls for Legislation to Increase Unemployment Insurance Benefits - Increase Seen as an Economic Stimulant

ALBANY, NY (01/22/2009)(readMedia)-- In response to the New York State Department of Labor's announcement today that the state's unemployment rate has risen to 7.0%, New York State AFL-CIO President Denis Hughes issued the following statement:

"The unemployment figures released today are simply staggering. Looking at the numbers, one thing is painfully clear: The time for action is now.

"With the unemployment rate now at 7.0% and climbing, an immediate increase in unemployment insurance benefits is necessary, not only to help those without a job, but to stimulate an economy in desperate need of a jolt.

"Studies have shown that every dollar in unemployment benefits generates a $1.64 increase in economic activity. People who are unemployed spend their unemployment benefits almost immediately, to buy groceries, purchase household necessities and pay the rent. Their unemployment dollars are quickly dispersed back into the local economy, and help to sustain local businesses, and increase the tax coffers of local governments throughout our state.

"Those tax dollars go to support police protection in Buffalo, fire fighters in Syracuse, sanitation pick-up in Rochester, hospital care in the capital district and better schools in New York City and throughout this state.

"The unemployment benefit has not been increased since 1998, and the current maximum benefit of $405 per week is far insufficient for working families to make ends meet if they lose their job.

"If we do not act now and pass a benefit increase, and a corresponding increase in the unemployment insurance premium, the state will be forced to borrow money from the federal government in order to shore up an already underfunded UI Trust Fund. Delaying this process will cost the state even more because additional dollars will have to be borrowed as the Trust Fund becomes further depleted.

"The New York State AFL-CIO will work with both houses of the legislature, and the Governor for quick passage of this important legislation."

As noted, the unemployment benefit has not been increased since 1998. The maximum benefit is currently only $405 per week. The New York State AFL-CIO calls for the following to be part of unemployment insurance legislation:

  • Increasing the weekly benefit to 50% of the average weekly wage, which is $1,141.17 according to the latest statistics released by the New York State Dept. of Labor.
  • Indexing the benefit for periodic increases, which will allow for reliable benefit increases to address inflation, health care and other cost of living increases.
  • Shore up the Unemployment Trust Fund. Filing for extended benefits have increased dramatically. This is placing additional strains on an already underfunded UI system..

Some numbers:

  • Today, the maximum benefit rate is 35% of the New York State average weekly wage.
  • New York's maximum benefit ranks 25th among all states.
  • The purchasing power of $405 has declined by over 20% since 2000, to only $327 in current dollars as we entered 2008.
  • The benefits paid to low-wage workers do not meet poverty thresholds set by the U.S. Census Bureau.

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