Gotham Gazette

The Place for New York Policy and politics

Summertime Unemployment. Also: Kinship Foster Care

For too many New Yorkers, the summer of 2003 has turned out to be the proverbial rainy day. Unemployment remains high, particularly among certain ethnic and age groups. There is a shortage of new jobs, which some unemployed workers blame on public priorities, such as giving federal funds meant for the recovery from 9/11 to residents of luxury housing in Battery Park City, rather using them to create jobs to replace those lost after the disaster.

In the coming year, unskilled job hunters will have fewer resources to help them compete with skilled workers for those vacancies that exist. Low-wage workers will face new hurdles in claiming the Earned Income Tax Credit, one of the few tax breaks targeted to the poor. And grandparents trying to raise grandchildren on Social Security checks or part-time paychecks may be better informed about their right to trade their privacy for government income assistance.


The New York State Comptroller’s Office estimates that New York City has lost nearly half of the jobs gained in the eight years of prosperity ending in December 2000. As of May 2003, the unemployment rate for the city had dropped to 8.1 percent, from its February high of 8.8 percent.

Some groups within the city are experiencing much higher unemployment rates. Among the city’s Hispanics, more than a quarter are unemployed, according to a recent poll by CBS and the New York Times. African-American men have lost the highest percentage of jobs since 2000, according to the Community Service Society. Out of every three city teenagers aged 16 to 19 who want to work, one is unemployed; this is almost double the national average. Of adults who have jobs, men aged 45 to 54 are the most likely to be laid off.


Unemployed workers protested repeatedly in downtown Manhattan during July and August, against the use of federal grants by the Lower Manhattan Development Corporation, which is distributing the funds to residents of lower Manhattan. The workers called for 60,000 new jobs to be created, using $1.2 billion in federal aid. The corporation has helped distribute $17 billion already to businesses, organizations and residents involved in the rebuilding effort, but has not directly funded job creation.

The Lower Manhattan Development Corporation controls about $280 million in federal rent subsidies and grants available to downtown residents in the wake of the attack on the World Trade Center. Low-income Chinatown tenants can apply for grants, but many have been rejected because they lack formal written leases or their landlords have failed to repair building violations. The corporation has $50 million left over from these residential funds, with which it plans to subsidize middle-income housing units within future luxury housing developments in the downtown area.


Last year, the city had a $151 million budget for job training and employment services. This sum included $57 million in federal Workforce Investment Act funds that the Giuliani administration had failed to spend. This year, the city has only $58 million for job training, and will have to sharply scale back its programs.

On July 16, Mayor Bloomberg formally transferred adult workforce programs from the city’s Department of Employment, which has been eliminated, to the Department of Small Business Services. The three programs transferred include the city’s three existing One-Stop job centers, and a fourth which has not yet been developed; these offer job hunting assistance to all New Yorkers, regardless of income. There is also the Individual Training Account program, which gives job hunters vouchers to pay for training at approved private providers; these have been put on hold until September. Third, the city holds contracts with 39 organizations offering job training and employment services to special populations and dislocated workers. Among others, “special populations” include former prison inmates, people with disabilities, and those with limited English language skills. The contractors have been told that their funds will be cut by two-thirds in the coming year.


Low-income working people -- such as childless adults earning less than $10,710 in 2002 -- are eligible for the Earned Income Tax Credit, which reduces their federal income tax obligations. The lowest-paid among them get a small check even though they owe, and pay, no taxes at all. The tax credit has become one of the largest sources of federal aid to the poor, with $32 billion in claims for last year. New York City households received $1.2 billion from the tax credit. Currently, one in 64 people who claims the Earned Income Tax Credit is audited.

The Internal Revenue Service believes that one in every three or four claims is not legitimate, often because children whose parents live in separate homes are claimed by both households. The agency announced in June 2002 that it would begin a pilot enforcement program in August 2003, under which 45,000 people would have to prove that their children lived with them for at least half of the year, before they could file claims for the tax credit. Opposition by advocates for the poor led the Internal Revenue Service to postpone the enforcement pilot until January 2004.

Eventually, anyone who files a claim for the Earned Income Tax Credit will have to provide such proof for each child listed as a dependent, except for married parents and single mothers. The requirement will affect grandparents, foster parents, stepparents, and single fathers.

The current application process requires 53 pages of instructions and worksheets. The New York City Department of Consumer Affairs estimates that 230,000 eligible city residents are not claiming the tax credit each year, for a combined loss of nearly $500 million. Many more spend part of the tax credit on the services of tax preparers who fill out the forms.


When children live with relatives other than two parents or a mother, their adult guardians face extra paperwork whenever they deal with authorities on behalf of the children. The forthcoming Earned Income Tax Credit demand for proof of the child’s residency, described above, is one such requirement.

Census data indicate that nearly one in four of the grandparents raising grandchildren in New York City is living in poverty. Many raise their children’s offspring with no support from the formal foster care system. Often they are not aware that they qualify for welfare, food stamps and services such as home care, day care, and counseling. Another option that grandparents may not know is that they—or any relative—can apply for formal foster parent status.

Child welfare workers will have to tell grandparents that they can become legal foster parents to their grandchildren, if Governor George Pataki signs a bill recently passed by the state legislature. Grandparents who choose this option receive a monthly stipend for each child, and the legal right to make decisions about the children’s schooling and medical care.

However, some grandparents who know about kinship foster care decide not to get involved with it. If they apply to be legal foster parents, the child welfare system will investigate their background and living situation, and gain the right to take the children away from them for breaking rules that natural parents do not have to follow. Once a child is in state custody—which must happen before grandparents can become foster parents—the system will seek to find a permanent home for him or her. The grandparents will be urged to adopt their grandchild, taking away their own children’s parental rights, or face losing the child to an unrelated adoptive family.

Linda Ostreicher, a former budget analyst for the New York City Council, is a freelance writer and consultant to nonprofits. She is currently on the staff of Bronx Independent Living Services.

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