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Facing Unemployment

by Joshua Brustein, Feb 07, 2005
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In the months after September 11, thousands of New Yorkers lined up at job expos when the city's unemployment rate peaked at 8.3 percent. Today, the unemployment rate is down, however the total number of jobs and the size of the city's labor force have also decreased.

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Since she lost her job at CVS pharmacy in May 2003, Marlene Perez has interviewed for jobs at over a dozen other retail stores. She has spent months shuttling to and from the New York State Department of Labor, trying to collect unemployment insurance.

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Perez has had no luck in getting either employment or unemployment benefits, which may be why she is not a big fan of Mayor Michael Bloomberg and his upbeat declarations about the city's economy.

"Every time he comes on that TV, I flip the channel," she said. "I don't want to hear it."

Perez, a 40-year old native New Yorker, is one of 230,000 unemployed New York City residents. She is not alone in questioning the official optimism about the unemployment problem. How effective, critics ask, are the city's job training programs? How fair are New York's policies on unemployment benefits? What will the plans and programs for "job creation" really create? But the debate begins with something even more basic: What is the real picture of unemployment in the city?

NEW YORK CITY'S UNEMPLOYMENT PICTURE

"We've come back strong - and we're creating jobs and opportunity in all five boroughs," Mayor Bloomberg proclaimed in his state of the city address last month. "Today the unemployment rate is down to 5.4 percent. For the first time in 16 years, New York City's unemployment rate is as low as the entire nation's."

New York City Councilmember Charles Barron, who is a candidate for mayor, was not the only person to react skeptically, but his response was among the more succinct: "He painted a rosy picture," he said, "of a city that I'm trying to find."

The skepticism begins with the unemployment rate itself. There is no question that the city's unemployment rate has declined recently, from a spike after 9/11 that reached a peak of 8.3 percent. But those who monitor the city's economy put little faith in this monthly statistic issued by the U.S. Department of Labor. "It's a meaningful measure of several things," Daniel Okrent wrote recently in the New York Times, "but not of what you and I mean by unemployment.'"

That is because the official unemployment rate does not include those people who have given up looking for work. In fact, in recent months, the total number of jobs in the city has actually declined, and the size of the city's labor force - those people either employed or looking for work - decreased between 2000 and 2003 by 11,000 people.

The official unemployment rate also does not take into account people who are "underemployed" - those who work only part-time or whose jobs do not provide them with adequate pay, security or benefits. Over the past year, the number of New Yorkers working as temps has increased, the temp agency industry having grown by more than eight percent.

Worse, say some critics, is the inequality of opportunity. New Yorkers are more likely to be jobless if they are male than if female, if they are in blue-collar occupations than white-collar, and if they are black or Hispanic than if they are white. Young people in New York City are less likely than those the rest of the country to have a job.

In an oft-quoted study, the Community Service Society found that barely one-half of African American males worked in 2003, as opposed to 75 percent of while males (report in pdf format). This disparity is due in part to a lack of credentials and experience among black men, says the study's author, Mark Levitan, and in part to discrimination.

Optimists argue that, in keeping with the usual up and down pattern of the business cycle, the unemployment picture in the city will improve as the economy improves. But others point to signs that something this time is different: For more than two years now, over 20 percent of the workforce has been unemployed for at least six months, which is the longest such streak since records started being kept in the 1960s.

Nationwide, millions of the unemployed are exhausting their unemployment benefits, the government-funded cushion intended to aid them while they look for work. In New York, unemployment benefits range up to $405 a week and last for 26 weeks. In recessionary times, the federal government can provide the funds to extend this, though it did not do so the last time it could have.

But many people are getting no benefits in the first place, a problem that is particularly widespread in New York.

UNEMPLOYMENT BENEFITS

Only 42 percent of unemployed residents of New York State collected unemployment insurance in 2003, a far smaller percentage than other states in the region, according to the National Unemployment Law Project.

Low-income residents of New York City collect at even lower rates. A 2002 study by the Brennan Center found that New York City residents who lost jobs paying over $22.46 an hour were more than twice as likely to receive benefits than those whose previous jobs had paid less than $8 hourly, regardless of education (in pdf format). It attributed the discrepancy to low-wage workers not believing that they were eligible for benefits.

Andrew Elmore, a Legal Aid attorney adds that low-wage workers — especially those who aren't completely comfortable with English –are less likely to be able to navigate the state's bureaucracy. He believes this problem will get worse as the state does more and more of its business over the phone and the Internet, as opposed to in person.

"For upper income and middle income English speakers, this is probably a good thing, because you don't have to physically wait online to apply and claim for benefits," he said. "The problem is really for low income workers, especially those who are low English proficient."

Elmore spends much of his time trying to prevent employers from blocking their former workers from collecting benefits, in hearings at the state's Department of Labor. He represented Perez when CVS challenged her unemployment claim. The company said that Perez had been fired for violating a store policy. Perez says that this is what she was told when she was let go by a new manager, but that she had simply been following the rules as taught to her by her previous boss. After a hearing in which two managers testified against her and a co-worker and a supervisor testified on her behalf, Perez's claim was rejected. She appealed, a process that lasted six months but ultimately ended in the same result.

"I don't know why they are trying to fight me," said Perez, whose failure to get employment benefits convinced her husband not even to file for them when he lost his job.

The reason they fight is that employers' tax rates are based on how many former employees qualify for unemployment. This has been part of the unemployment insurance system since its inception in 1930s. It was intended to discourage companies from laying off workers, but it also creates an incentive for employers to challenge claims.

"Unemployment insurance is not a welfare system," said David Raff, a labor law attorney. "You have to be unemployed through no fault of your own, and no fault of your own is an elastic concept."

If some see an inherent injustice in a process that pits well-prepared companies against overmatched individuals, critics have long labeled New York's system as especially unfair. Raff monitors the state's performance, a responsibility he took on after his firm successfully sued the state for the system's lack of due process.

The procedural violations continue, Raff says, including a lack of translation services, and a failure to allow the presentation of evidence and the cross-examination of witnesses. Much of this, he says, is the result of insufficient funding, which limits many cases to hearings of a half hour or less.

JOB TRAINING

Philip Botwinick lost his job working on computers for financial firms shortly after September 11. Since then he has worked as a driver for a car service, for WBAI radio, helping friends on remodeling projects, and during November's presidential election as a poll worker near his home in Queens. None of these jobs have offered steady, full-time work.

Botwinick also received benefits for workers displaced by 9/11. His benefits included a stipend to take classes in newer computer languages.

"I wasn't happy with the courses I got," he said. He said the classes didn't teach him much, and wondered if they were practical. "I don't even know if technology is worth going into. From what I'm reading, all of the jobs are in the service industry or restaurants."

For as long as the city has run job-training programs, the lack of connection to the real-life working world has been a common complaint. The more effective programs have been offered by private employers or by unions, whose apprenticeship programs have long been considered one of the best ways to get workers who do not have high levels of education into steady, well-paying jobs.

City College of New York has also become increasingly effective in providing job training, according to a report by the Center for an Urban Future (report in pdf format). In total, a quarter of a million people are involved in some sort of practical job training, the report found; 25,000 were in programs where the university had partnered directly with private employers to provide training.

Conceding that the city's operations needed to be more responsive to the current job market, the Bloomberg administration folded the Department of Employment into the Department of Small Business Services in the summer of 2003 and the following April opened job-training centers called Workforce 1 Career Centers across the city.

"The big strategic imperative was how do you make sure that when you're training people, it's connected to real work at the end of the day," said David Margalit, deputy commissioner of workforce development for the department.

Pablo Acosta, a Dominican-born resident of Gun Hill in the Bronx, had been unemployed for about a month when he started attending bank teller classes at one of the centers. After a three-week training period, Acosta quickly found a job with HSBC.

"It might have been the lowest position at the time. But it was a great opportunity to learn from the bottom and work yourself up," said the 25-year old Acosta, who had previously worked in retail, a job he found too taxing. "They had connection with the banks … and put you into new and different ones until you found one."

While comprehensive statistics are not yet available on the program's success, some who have been skeptical of the city's job training in the past say they are modestly encouraged. But, they say, it is not enough.

"I believe in training, but we get stuck in training," said Councilmember Barron. "It has to be coupled with serious job placement -- and serious job creation."

JOB CREATION

When the members of the City Council heard of the report on unemployed black men, they allocated $10 million to create new jobs. But how to do it? Should they subsidize wages, or create business incentives, or directly help local entrepreneurs? All these ideas have been discussed. The money so far remains unspent.

Nobody is against job creation, but public officials seem unsure how to do it. Steve Malanga of the Manhattan Institute thinks that the government should concentrate on making the city attractive to businesses, "with reasonable tax rates, effective schools, and low crime rates." The Bloomberg administration's pitch for its ambitious development projects includes an argument that it will create many new jobs. Bloomberg contends that the Hudson Yards development alone will create 280,000 new jobs, largely in the tourism industry. Critics counter that, even if this number is for real, it might not make sense to focus on a low-wage industry that has traditionally hired few minority men. They believe there should be targeted encouragement of specific industries that have potential to create sustainable jobs for the populations that need them most.

Last month the administration announced several new steps to support manufacturing and keep manufacturing jobs in the city. The mayor’s plan (in pdf format) would create 14 Industrial Business Zones. These areas could not be rezoned for residential use, which are often more profitable. Tax credits would be available to businesses that moved to the zones, and the city would also help provide job training and improve sanitation in the area. The new Office of Industrial and Manufacturing Businesses, will oversee the Industrial Business Zones. (See related story.)

Public officials and economic observers generally agree that the construction industry holds the greatest promise in the near future, for several reasons. First, with the number of housing permits up 20 percent since 2000 and increased commercial development anticipated at Ground Zero and on Manhattan's Far West Side, there will be plenty of construction work to do. Second, the jobs are well-paying union positions. Third, the impending retirement of baby boomers, the last generation to move into skilled trades, is expected to create many openings in the coming years.

Fourth, those jobs might finally be opened to women and people of color. Bloomberg recently announced that his administration will focus on the construction industry, promising programs (with names like "Building Jobs Through Building New York") that would encourage the hiring of minorities, especially through minority-owned and women-owned businesses. This might have been a pre-emptive strike against a City Council report published soon afterward that found the city is failing to contract with such businesses now. (in pdf format) But the promise leaves some observers feeling hopeful. "I think that the good will is genuine on the part of the people from the employer side and from the union side" said David Fischer from Center for an Urban Future. "That is really all you need to make what the mayor was talking about work."

In the meantime, Marlene Perez looks for work without help from the city – partly because of her unhappy experience trying to get benefits and partly because she wants to be independent. Her husband David's military pension and his job at the Columbia Presbyterian Hospital pay the bills; her 20-year-old son David, who works as an electrician, helps her buy things for his 16-year-old brother, Christian, when he can be convinced not to spend the money on his girlfriend instead.

Perez has thought about switching from retail - maybe to work with children - but she is hesitant to leave a profession she feels comfortable with. Her most recent interview with Rite-Aid pharmacy went well, she thinks. She's still waiting to hear back.

FROM GOTHAM GAZETTE

• The Mayor's State of the City Address
• Mayor's Rivals Respond to the State of the City
• What is the State of the City?
• In Big Projects, Where do the Jobs Go?
• The Lie of Prosperity
• Creating Jobs, and Filling Them

NEW YORK'S UNEMPLOYMENT PICTURE

• National Employment Situation Summary (by the Bureau of Labor Statistics)
• New York City Unemployment for December, 2004 (by the City Comptroller)
• Companies Increasingly Relying on Temp Agency Workers (by the National Employment Law Project)
• A Crisis of Black Male Employment: Unemployment and Joblessness in New York City (in pdf format by the Community Service Society)
• Black Male Unemployment in NYC, 2004 (by the Center for an Urban Future)
• New York City's Disconnected Youth (in pdf format by the Community Service Society
• Why are New Yorkers' Incomes Staying Steady When So Many Are Unemployed (by City Limits)
• Women and Minorities not Getting Their Fair Share of City Contracts (in pdf format by the New York City Council)

UNEMPLOYMENT INSURANCE

• Unemployment Compensation (by the Almanac of Policy Issues)
• What is Unemployment Insurance (by the New York State Department of Labor)
• Unemployment Insurance (a series of articles by the Center of Budget and Policy Priorities)
• Improving NewYork State's Unemployment Insurance System (by the National Employment Law Project)
• State by State Comparison of Unemployment Benefits (by the US Department of Labor)

JOB TRAINING AND CREATION

• CUNY on the Job (by Center for an Urban Future)
• Workforce One Career Centers (by New York City Department of Small Business Services)
• New York City's Unemployment Crisis and the Need for an Emergency Job Creation Program (by James Parrott of the Fiscal Policy Institute)




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