NY Times: 800,000 New Yorkers Just Lost Federal Unemployment Benefits

Matthew Haag and Nicole Hong

Originally published in The New York Times

“To just cut people off, it’s ridiculous and it’s unethical and it’s evil,” said Travis Curry, 34, a freelance photographer who will lose roughly $482 in weekly assistance. Credit: Rosem Morton for the NY Times.

Published Sept. 7, 2021; updated Sept. 13, 2021.

From the beginning of the coronavirus pandemic, New York City has been pummeled economically unlike any other large American city, as a sustained recovery has failed to take root and hundreds of thousands of workers have yet to find full-time jobs.

On Sunday, the city, like other communities nationwide, was hit with another blow: The package of pandemic-related federal unemployment benefits, which has kept families afloat for 17 months, expired.

In short order, roughly $463 million in weekly unemployment assistance for New York City residents is ending, threatening to upend the city’s fledgling economic rebound and slashing the only source of income for some to pay rent and buy groceries in a city rife with inequality.

About 10 percent of the city’s population, or about 800,000 people, will have federal aid eliminated, though many will continue receiving state benefits.

The benefits were the sole income for the many self-employed workers and contract employees whose jobs are central to the city’s economy and vibrancy — taxi drivers, artists and hairdressers, among many others — and who do not qualify for regular unemployment benefits.

“To just cut people off, it’s ridiculous and it’s unethical and it’s evil,” said Travis Curry, 34, a freelance photographer who will lose all his assistance, about $482 a week. “If we can’t buy food or go to local businesses because we don’t have money to live in New York, how will New York come back?”

Federal officials say that more Americans are ready to return to work, and Republican lawmakers and small business owners have blamed the benefits for discouraging people from working at a time when there are a record number of job openings.

In recent weeks, President Biden has said that states like New York with high unemployment rates could turn to leftover federal pandemic aid to extend benefits after his administration decided not to ask Congress to authorize an extension.

In New York, Gov. Kathy Hochul, a Democrat who last week signed a new moratorium on evictions after the Supreme Court ended federal protections, said the state could not afford to extend the benefits on its own and would need the federal government to provide additional money. A spokesman for Mayor Bill de Blasio did not respond to requests for comment.

The expiring of unemployment benefits ends a period of extraordinary federal intervention to prop up the economy over the past year and a half as the virus has ravaged the country, claiming the lives of 649,000 people and leaving millions of laid-off workers struggling to secure new jobs.

The federal programs supplemented standard and far more modest state unemployment benefits. New York City was the first major city in the United States to be hit hard by the pandemic, decimating industries almost overnight that underpinned the city’s economy, from tourism to hospitality to office buildings. Economists have projected that New York City may not fully regain all its pandemic job losses until 2024.

The federal assistance provided new streams of financial aid beyond regular unemployment payments, which are distributed by states. Jobless Americans received a $600 per week supplement, which was later reduced under Mr. Biden to $300 per week. Unemployment benefits were also offered to contract workers and the self-employed, who under normal circumstances do not qualify for assistance. Payments were extended beyond the 26 weeks offered by most states.

The end of the $300 federal supplement means those who still qualify for regular benefits through New York State will lose about half of their weekly assistance.

Since the jobless programs rolled out in April 2020, New York City residents have collected about $53.5 billion in unemployment aid, primarily among lower-paid workers in the service, hospitality and arts industries, according to a recent report by the economist James Parrott of the New School’s Center for New York City Affairs. The recipients also tended to be people of color, who have borne the brunt of the pandemic’s economic and health toll.

That includes Ericka Tircio, who lost her job cleaning a 40-story office building in Manhattan’s Financial District in March 2020 and contracted the disease around the same time. She has collected assistance since then, but it will be reduced by about $300 per week.

Ms. Tircio, an immigrant from Ecuador who has a 6-year-old son, said her company told her recently that she might be asked to return to work in the coming months.

“I’m praying to God that they call me back,” Ms. Tircio, who speaks Spanish, said through a translator. “There are moments when I’ve waited so long that I feel myself falling into a depression.”

Ms. Tircio is a member of 32BJ SEIU, a local chapter of the Service Employees International Union, whose president, Kyle Bragg, said thousands of its members had been laid off during the pandemic.

“Workers should not be left behind to fend for themselves during the worst crisis in a century,” Mr. Bragg said.

In recent months, about half the states elected to end their pandemic-related benefits long before the expiration this weekend, a deadline set by the federal government when a vigorous recovery appeared to be on the horizon.

In states led by Republican governors, elected officials said that the assistance stymied economic growth and resulted in labor shortages; however, the job growth in those states has not been substantially different than in states that kept the programs.

In New York, business leaders have advocated for the state to end the pandemic unemployment benefits, arguing that they hurt small businesses struggling to hire workers. Thomas Grech, president of the Queens Chamber of Commerce, said several job fairs he hosted over the summer were poorly attended.

“People were disincentivized to go to work,” Mr. Grech said. “They’re making more money sitting at home. It’s a classic case of good intentions gone bad.”

Mr. Grech said that raising wages as a way to lure workers, as some labor economists and advocates have recommended, was unrealistic for some restaurants “unless you want to spend $30 or $40 for a burger.”

Elected officials in New York have argued that unemployment benefits helped pump money directly into the economy.

“People who receive emergency unemployment assistance are going to turn around and spend that money, and that money is helpful to other people who are also struggling to get things back to normal,” said State Senator Brian Kavanagh, a Democrat who represents Lower Manhattan.

The expiration of the benefits was supposed to coincide with a grand reopening of sorts for New York, as many companies announced during an early summer dip in virus cases that workers would be called back to the office in September.

But the Delta variant has fueled a resurgence of the virus, postponing any hope that Manhattan’s office buildings would soon refill.  While months of moderate job gains have lowered the rolls of people without jobs, the city’s unemployment rate in July, 10.5 percent, was roughly double the national average.

Bill Wilkins, who oversees economic development for the Local Development Corporation of East New York in Brooklyn, said unemployment and other benefits helped sustain his neighborhood, which has long suffered from high joblessness. But as the pandemic recedes from its peak, he said it was also “incumbent for individuals to be more self-reliant.”

The pandemic exposed the significant skills gap in New York City, he said, resulting in large numbers of unemployed workers who do not qualify for job openings that require a college degree, such as high-paying jobs in the tech sector.

“If you want a job right now, you have a job,” Mr. Wilkins said, referring to lower-paying openings at many mom-and-pop shops. “The problem is, is that job a sustainable wage? You want the higher-paying jobs, but you have to have the requisite skills that demand that type of salary.”

Alex Weisman, an actor, registered for unemployment benefits for the first time after the pandemic shut down Broadway, where he had been in the ensemble for “Harry Potter and the Cursed Child.” The checks, which ranged from about $800 to $1,100 a week, allowed him to keep paying rent for his apartment in the Hamilton Heights neighborhood of Manhattan.

Mr. Weisman, 34, submits audition videos every week, hoping for steady work. Earlier this year, he booked a television job for five weeks, which allowed him to briefly go off unemployment benefits.

As his benefits run out, he is considering connecting with a temp agency to find work. The last time he had a job outside acting was as a barista in 2013.

“I’m going to have to get an entry-level position somewhere,” Mr. Weisman said. “Because I succeeded in the thing that I trained in and wanted to do, I have absolutely nothing to offer any other industry. It’s scary.”

Mohammad Kashem, who worked for nearly two decades as a taxi driver, had similar difficulties switching industries. Before the pandemic, a bank had seized his taxi medallion after he struggled to repay his loans amid a sharp drop in yellow cab ridership.

Mr. Kashem, an immigrant from Bangladesh who lives in Brooklyn, worked as a postal carrier during the pandemic but quit after one month, saying he was unaccustomed to delivering mail through rain and snow.

His family has been relying on $700 a week in unemployment benefits. He and his wife could not maintain jobs during the pandemic because of health issues, he said, noting that they both contracted the coronavirus and have high blood pressure and diabetes.

When the unemployment benefits expire, his wife may try finding a job as a babysitter. Mr. Kashem, 50, has been wracked with anxiety about how he will pay for rent and school supplies for his three children.

“I was driving taxi many, many years,” Mr. Kashem said. “I’m not used to another job.”

Correction: Sept. 13, 2021: An earlier version of this article misstated New York City's unemployment rate in July. The rate was 10.5 percent, not 10.2 percent.

Matthew Haag covers the intersection of real estate and politics in the New York region. He previously was a general assignment and breaking news reporter at The Times and worked as an education reporter at The Dallas Morning News. @matthewhaag

Nicole Hong writes about New York City's economy. Before joining The Times, she was a law enforcement reporter for The Wall Street Journal, where she was part of a team that won the 2019 Pulitzer Prize in National Reporting. 

A version of this article appears in print on Sept. 8, 2021, Section A, Page 1 of the New York edition with the headline: In New York City, 800,000 Lose Federal Aid, Imperiling Rebound.