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New York's unemployment claims rose nearly sixfold in one week 

Visitors to the Department of Labor in Manhattan

Visitors to the Department of Labor in Manhattan are turned away at the door by personnel due to closures over coronavirus concerns. Credit: AP/John Minchillo

More than 80,000 New Yorkers filed for unemployment insurance last week — nearly six times the number who filed the week before  —  as the coronavirus begins to take its toll on the state's economy.  Local economists said lower income workers on Long Island will be among the hardest hit.

Over 80,500 New Yorkers sought unemployment benefits during the week ended March 21, according to the state Labor Department. They are among the nearly 3.3 million Americans who filed claims last week, according to a report released Thursday by the U.S. Department of Labor.

Hit hard by the latest rash of closures and business shutdowns are smaller businesses reliant on customer foot traffic. With less capital, smaller firms are having a harder time dealing with shortfalls brought on by COVID-19 and government efforts to contain its spread, said Richard Vogel, dean of the school of business and professor of economics at Farmingdale State College.

“Restaurants can’t survive forever on takeout,” Vogel said. “If we look at Long Island, the number of service businesses, hotels, restaurants and a whole array of personal services…they are just completely shut down or operating at bare minimums.”

The high number of unemployment claims, is “just the start of things at many firms," Vogel said. "Unless they start receiving additional revenue flows, they won’t be able to maintain payrolls for that long.”

John A. Rizzo, chief economist for the Long Island Association business group, said that while Long Island was in a strong position entering the pandemic crisis, the region is “dominated by small businesses.”

"They’re not as well capitalized as big businesses are to withstand shortfalls of this type"  and need loans to help them weather the crisis, Rizzo said. “It’s very important for small business on Long Island to get those loans.”

For workers who have seen their jobs evaporate, an expansion of unemployment benefits was included in an economic relief bill nearing final approval in Congress. A provision in the bill would provide an extra $600 a week on top of the unemployment aid that states provide. Another would supply 13 additional weeks of payments beyond the standard six months.

The legislation would also extend unemployment benefits, for the first time, to gig workers and others not on company payrolls.

Additionally, lawmakers are mulling a plan to provide a one-time stimulus check of $1,200 to individuals, $2,400 to married couples, and an additional $500 for each child a parent has under 17 years old.

These payments, however, phase out for individuals with incomes of more than $75,000, and wouldn’t be available to Americans making more than $99,000.

Rizzo said that while the stimulus would certainly be a benefit, the reality is that Long Island’s higher cost of living makes those dollars harder to stretch here than in other parts of the country.

“Long Islanders are wealthier than the average American, so they are probably better able to withstand the downfall. On the other hand, they’re getting less help,” Rizzo said. “The lower- and middle-income Long Islanders could be particularly hard hit.”

Gregory DeFreitas, senior labor economics professor at Hofstra University and director of the Center for Labor and Democracy, said the crisis has brought the economy into “uncharted waters.”

DeFreitas said the aid proposed by lawmakers doesn’t go far enough for small business owners and workers, especially in the way it handles aid to larger financial institutions.  

“They're giving aid to the banks too, so you’d think…that to be fair to homeowners they would use that as leverage to say, ‘Hey, why don’t you give a break to homeowners on mortgage,' ” an issue that impacts the Island’s large homeowning population.

Separately, the state Labor Department said Long Island added 7,600 jobs in February; the number does not reflect the impact of the virus.

“February’s numbers were very similar to January’s numbers,” said Shital Patel, labor market analyst in the department's Hicksville office. "The first two months of the year we had pretty solid private sector job growth.”

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