The Economy Project
Wed September 16, 2009
Recession Taking Its Toll In New York, Report Finds
By Karen DeWitt
Albany, New York – A new report finds that while New York has been hit hard by the so-called "Great Recession," federal stimulus monies have buffered some of the worst effects of the economic downturn.
The report, by Fiscal Policy Institute, estimates that the true unemployment rate in New York is quite a bit higher than the official 8.5 percent rate reported by government sources. FPI economist James Parrott says when you count workers who have simply given up on looking for work, and hourly workers forced to accept severe cutbacks in their hours, the rate is actually much higher, at 14.1 percent.
Fiscal Policy Institute calculates that the unemployment rate among African American men is even higher at around 27 percent. Parrott says the Great Depression was defined as having an unemployment rate of 20 percent or greater.
"This 'Great Recession' is clearly a Great Depression already for blacks in New York and in many parts of the country," said Parrott.
The union-financed think tank has been reporting for years now about the growing wage discrepancies between New York's richest, poorest and middle class. It has documented that, since the early 1990s, the rich have been getting much richer in New York. The IRS data also shows that the poor have been loosing ground and the middle class has stagnated. Parrott says those trends only exacerbate the effects of the economic downturn.
"For most workers in New York, there's been very little, if any improvement since 1990," said Parrott. "Despite the fact that productivity...has increased pretty substantially over that period of time."
Parrott says there is some good news though. Things could have been worse, he says, if it weren't for the mass infusions of the federal stimulus monies.
He says all of the road construction projects touted by politicians represent only a portion of the stimulus projects. The more important aid went to state and local governments to maintain basic services, without huge cuts or even steeper increases in taxes.
There were also funds for supplementing unemployment insurance checks, food stamps and extra payments to the elderly on social security.
And Parrott says the much maligned Wall Street bailout by the federal government meant that New York has lost fewer jobs in the Great Recession than 40 other states.
"Job losses on Wall Street have been a lot less than what people feared," said Parrott, who said there were no job losses in the city's banking industry over the past year.
The report finds more needs to be done, though, including shoring up the housing market to reduce the number of foreclosures and increasing New York's second lowest in the nation unemployment insurance payments.
Parrott says he believes the President and Congress will have to come up with another stimulus package before the worst effects of the great recession are over.