The city’s economic rebound has stalled with looming new pandemic-spurred restrictions threatening to cost tens of thousands of jobs and the need for help — especially emergency food aid — growing.
The federal aid package being negotiated in Washington will offer a modest boost, say economists and those on the front lines of pandemic relief — but will likely less be than half of the $2.2 trillion CARES package passed in the spring.
“It does put some money in the pockets of individuals who are struggling,” said Lisa David of the social service organization Public Health Solutions. “It is just not enough. The needs are just enormous.”
New York added only 10,600 jobs in November, according to figures released late Thursday by the state Labor Department, the smallest monthly gain since the city began slowly crawling out of the hole created by the last economic shutdown in March.
Overall, the city unemployment rate fell to 12.1% from 13.0% in October, but it remains almost double the national rate of 6.7%.
Other data is also bleak — and could get worse with Gov. Andrew Cuomo and Mayor Bill de Blasio suggesting this week that new restrictions on the in-person economy may be coming soon due to the recent coronavirus resurgence.
“When COVID-19 infection rates go up, business revenues go down and job growth soon follows,” said James Parrott, a New School economist who is closely tracking the jobs situation.
The unemployment numbers released Thursday show that only about half of those 16 years or older are working or seeking work, down from slightly more than 58% in February.
Almost 200,000 people have dropped out of the labor force since February, many of them either unable or too discouraged to seek work.
The city remains 571,000 jobs below its record 4.7 million from February — not much less than the 620,000 jobs New York lost in the extended recession that lasted from 1969 to 1977.
“There are very few positive signs in the November jobs data,” said Parrott. “And when you add back those who’ve dropped out of the labor force since February, the city’s unemployment rate for November would be 16.4%.”
‘It Is Not Predictable’
Most professional and office workers have been able to work remotely, keeping their incomes intact while saving money on costs from commuting to buying lunch to dry cleaning. The result is that surprisingly strong income tax payments are leading to tax revenues $4 billion more than expected for the state.
But lower-wage workers, especially those in face-to-face industries, are barely hanging on with the city’s emergency food demand intensifying and a housing crisis of unprecedented proportions likely when a moratorium on evictions is lifted.
City Harvest reported this week that since July it had delivered 64 million pounds of food — an 125% increase over the same period last year. The total number of people served at the community distribution sites City Harvest works with has more than tripled to almost 200,000.
David notes how difficult the system is for people who need help.
“You have to go, you have to wait in line,” she said. “It takes up your day and it is not predictable.”
David recently saw a man pushing a stroller outside her house with his phone in hand. When she asked if he needed help, he said he was looking for a food pantry but that the two he had tried so far that day were closed.
She sent him to one down the street at a church.
While federal rules preventing evictions expire at the end of the month, Cuomo has extended the state moratorium on both residential and commercial evictions until the end of January. The state Senate is working on legislation for an indefinite extension but the prospects for such legislation are unclear.
BronxWorks, a human services nonprofit, says the average person seeking its help with housing issues owes between $8,000 and $11,000 in rent. Executive Director Eileen Torres says it’s not unusual for clients to be behind $20,000, while a handful are more than $30,000 in debt to their landlords.
Benefits in Limbo
While neither Cuomo or de Blasio have been specific about the restrictions they say they may impose in the next couple of weeks, the recent end of indoor dining alone will put thousands back on unemployment.
Some 215,000 restaurant jobs disappeared between February and April. Since then, the city has recovered just over 100,000 of those positions, most of which now appear endangered.
The compromise federal aid bill under negotiation is expected to extend current unemployment benefits, some of which are scheduled to expire this month, for 1.1 million New York City residents, including gig workers and independent contractors.
Benefits would be boosted by $300 a week for 10 weeks. The average traditional UI check in New York City is $286 a week and the average payment to gig economy workers, contractors and freelancers is $259 a week.
Many New Yorkers will receive a $600 check per adult and $600 per child, although income limits appear to be under negotiation.
“If the new federal aid package reinstates an unemployment insurance supplement, that will help,” Parrot said. “Ten weeks are not long enough, but it could always be extended.”
A federal loan program of $257 billion would provide money for some small businesses to keep their workers on the books. But since the money must be used for payroll, it wouldn’t help restaurants with no indoor dining, David noted.
David also noted that people who received the $600 unemployment supplement in the spring often no longer qualified for SNAP food benefits due to income restrictions. If the rules for SNAP were made more flexible, more people could be helped with much less stress, she said.
“If you were on food stamps, you get a monthly card, you can just go to a grocery store,” she said. “And I can enroll someone in SNAP over the phone.”