New York Suffers Worst Job Loss in Five Years
New York lost 49,100 jobs in 2008, as the deepening recession sparked the sharpest one-year employment downturn since 2003, the New York State Department of Labor said in a report Thursday, January 22.
The city’s December unemployment rate shot up to 7.4 percent, from 6.3 percent in November, hitting the highest level in nearly five years and climbing above the national rate of 7.2 percent. Statewide, the unemployment rate jumped to 7 percent, from 6 percent, the steepest one-month climb on record.
“It’s one of those months when the numbers speak clearly for themselves,” said James Brown, principal economist for the New York State Department of Labor.
The annual losses include 27,900 jobs that evaporated in December alone, according to an analysis of Labor Department data by real estate firm Eastern Consolidated.
The severe deterioration in the job market left private-sector employment in the city 1.5 percent below 2007 levels. Not only has the pace of layoffs picked up, but the city witnessed dismal holiday season hiring, which typically bolsters December job levels, Brown said.
Weakness spread across just about every industry, with Wall Street, not surprisingly, leading the way. The city shed 17,500 securities jobs last year, or more than 9 percent of its December 2007 total. Professional and business services lost 8,900 positions. Construction was also a big loser, with 7,000 jobs disappearing.
For December, losses were highest in the retail sector, which shed 3,700 jobs, the Eastern Consolidated report said.
“New York lagged the nation in entering the recession, but it’s clear we are not lagging any longer,” said James Parrott, chief economist at the Fiscal Policy Institute, a liberal research group.
The rising job loss caused more New Yorkers to file unemployment claims and led to calls by advocacy groups to reform the state’s unemployment insurance system.
Statewide, the number of initial claims rose 16 percent in 2008 compared with a year ago, reaching 1,239,627. The 173,381 claims in December were up 51 percent over November. More New Yorkers are unemployed than at any time since October 1993.
The pace of new claims has outstripped the state Unemployment Insurance Trust Fund’s ability to keep up, forcing it to borrow from the federal government to survive.
New York State AFL-CIO president Denis Hughes released a statement Thursday calling for the Legislature to increase unemployment benefits for workers. The Fiscal Policy Institute and National Employment Law Project issued a similar call.
A spokesman for the Business Council of New York State said reforming the unemployment insurance system—which is funded by payroll taxes—is a complex project that requires debate. “It’s simply not as simple as saying raise the benefit,” he said. “Currently, New York State employers struggle in a high tax climate overall.”
The surge in unemployment triggered a 13-month extension in federally funded unemployment benefits, and the proposed federal stimulus could increase benefits by $25 a month, but the advocates say those measures aren’t enough.
The maximum weekly unemployment benefit in the state has been frozen at $405 per week since 2000 and would need to rise to $577 to keep pace with wage increases since that time. New York’s unemployment benefit replaces just 26.6 percent of the average worker’s paycheck—lower than every state except Alaska, Parrott said. The unemployed can qualify for $560 per week in New Jersey and $519 per week in Connecticut.
“The unfortunate failure to adjust New York’s maximum weekly unemployment benefit to keep pace with the growth in average wages is costing New York’s businesses hundreds of millions of dollars in consumer purchases, and ultimately worsening the state’s already bleak job picture,” Parrott said.
Filed by Daniel Massey of Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail firstname.lastname@example.org.
Workforce Management’s online news feed is now available via Twitter.