Recession and 9/11Recession and 9/11

Economic Hardship and the Failure of the Safety

Net for Unemployed Workers in New York City

Annette Bernhardt and Kate RubinBrennan Center for Justice at NYU School of Law

Presented to the New York Regional Association of Grantmakers

January 13, 2004

Finding 1

An unequal system

The majority of unemployed workers in New York State do not receive unemployment benefits

Percent of unemployed workers receiving benefits

42%

0

10

20

30

40

50

60

70

80

90

100

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

Per

cent

rec

eivi

ng b

enef

its

Those who need benefits the mostare the least likely to get them

Percent of workers receiving benefits:

... by wage

38.3

50.959.3

68.5

80.4

0

20

40

60

80

100

$8 and below

$8.01 - $11

$11.01 - $15

$15.01 - $22.45

$22.46 and up

... by race/ethnicity

54.9

43.2

63.2

74.7

AfricanAmerican

Latino Asian & others White

Finding 2

Inadequate benefits

Many workers who receive benefits exhaust them before finding a new job

Number exhausting

Percent exhausting

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

2001

Q1

2001

Q2

2001

Q3

2001

Q4

2002

Q1

2002

Q2

2002

Q3

2002

Q4

2003

Q1

2003

Q2

2003

Q3

0%

10%

20%

30%

40%

50%

60%

70%

Unemployment benefits don’t replace workers’ wages

Percent of weekly wages that UI benefits replace in New York

30.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1938

1940

1945

1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2003

The social cost of our failed system

• The majority of workers we interviewed experienced serious economic hardship

60% reported crises such as having their utilities cut off, being evicted, or having to go to soup kitchens

• In 2003, we estimate that low recipiency cost New York City between $400 and $600 million in lost benefits

Finding 3

Outreach works

Outreach significantly increases the number of workers who receive benefits

Percent of workerswho received

benefits

When respondent became unemployed

Before September '01 51.9

September '01 to December '01 64.6

January '02 onward 56.5

Whether respondent was union member at last job

Not union member 53.5

Union member 73.9

And outreach also reduces the inequality in who receives benefits

The effect of outreach after September 11th

0

20

40

60

80

100

English is first language Other first language

Perc

ent r

ecei

ving

ben

efits

Unemployed before Sept. '01

Unemployed Sept. '01 to Dec. '01

Unemployed Jan. '02 onward

How public policy can help

1. Better Outreach

2. System Reform