About 200,000 New Yorkers will lose their unemployment benefits at the start of the new year if Congress and President Barack Obama fail to reach an agreement to avoid going over the fiscal cliff.
Unless the federal government acts, aid for the long-term unemployed is set to expire along with 2012 on Monday.
Earlier this month, the state Department of Labor sent recipients of emergency unemployment benefits, which are paid for by the federal government rather than the state, a letter informing them that their benefits were set to expire.
The letter directs them to programs that provide job search assistance, such as their local One-Stop Career Center. “We recognize that being unemployed is very stressful for you and your family,” the letter says. “We hope you will let us help you with your job search.”
The Emergency Unemployment Compensation program began in 2008 as a way to help people struggling to find jobs during a severe recession. It provides assistance to people who have exhausted state unemployment benefits. In New York, people whose unemployment has lasted longer than 26 weeks can claim EUC, which offers up to 53 weeks of benefits in four tiers.
According to the National Employment Law Project, more than 2 million unemployed Americans will lose their emergency jobless aid unless Congress renews the program this weekend. Another 1 million would lose access to the program in the first quarter of 2013.
“The impact on jobless workers will be immediate and severe,” said Mitchell Hirsch, an unemployed worker advocate at the National Employment Law Project. “These are folks who were laid off through no fault of their own and have been looking for work for longer than six months. For the overwhelming majority, EUC is the only source of income they have while they’re looking for work. The program has been a lifeline for millions of people affected by the economic downturn.”
In November, the national unemployment rate was 7.4 percent, down from 8.2 percent the previous year. In New York, the November unemployment rate was unchanged from the previous year, when it was 7.9 percent. Upstate, the November unemployment rate was 7.7 percent, a slight uptick from the previous year, when it was 7.5 percent, according to figures from the state Department of Labor.
Hirsch noted that when the EUC program was created, the unemployment rate was relatively low — about 5.6 percent.
According to the Law Project, about 40 percent of unemployed workers are long term. The Bureau of Labor Statistics considers people who have been unemployed for 27 weeks or longer the long-term unemployed.
Hirsch predicted that the expiration of the EUC program would cause “many people to rapidly slide into poverty, take on enormous amounts of debt and face years of difficulty.”
The term fiscal cliff refers to the combination of tax increases and steep, across-the-board spending cuts that will take place if Congress and the Obama administration fail to sign off an alternative plan to reduce the federal deficit by the end of the year.