Experts: No unemployment extension could hurt LI economy

If Congress fails to pass unemployment-benefits extension legislation soon, the result could severely damage Long Island's economy, which is in the early stages of a recovery, some local economists said.

About 28,000 Long Islanders receiving extended unemployment benefits could see them dry up by the end of the month, the state Labor Department has estimated. And that number could double to 56,000 by May 1, the department said.

Dropping 28,000 people from the unemployment-benefits rolls is equivalent to losing 28,000 minimum-wage jobs, said Gary Huth, the Labor Department's principal economist for the Island. He estimates that could pull more than $8 million a week from the Island's economy.

"The economy is just starting to get better, and a hit like this is like pulling the rug from under it," Huth said.

Irwin Kellner, chief economist for MarketWatch and a Long Island resident, agreed.

He noted that the jobless spend each penny of their unemployment benefits. By not extending them, not only would recipients suffer, but "you're also hurting retailers and by extension the rest of Long Island just when it needs help the most," he said.

The average weekly unemployment benefit on Long Island is $325, according to the Labor Department; the state maximum is $405.

The federal programs offering extra unemployment benefits began in 2008 under former President George W. Bush.

Through several extensions of so-called emergency and extended-benefits programs, some of the long-term unemployed were able to receive as many as 99 weeks of unemployment benefits versus the traditional 26-week maximum. That extended maximum amount fell to 93 weeks after New York's unemployment rate fell below 8.5 percent several months ago.

But now that the Nov. 28 deadline for extended benefits has expired, the extra payments will stop unless Congress acts.

The last payment for people in the 20-week extended benefit program would be the week that ends Sunday, unless Congress acts. People qualify for that program after finishing their 26 weeks of unemployment and cycling through the 47-week, three-tier emergency-benefits program. Without a new eligibility deadline, as people finish their tiers they will not be able to go to the next level and their benefits will end prematurely.

Statewide, 200,000 people could lose their benefits without extensions; nationwide, the total is more than 600,000.

Garden City resident Gregory Senken is bracing for the possibility.

Senken, 54, has been unemployed since March 2009, when he lost his six-figure job as a managing director of a real-estate services firm. Down to one salary - his wife is a nurse - the family has "drastically reduced" its lifestyle. Sometimes that means no birthday gifts or new clothes for their children, ages 12, 16 and 20.

The loss of benefits would force further sacrifice.

"We may have to start cutting back on some athletic activities the children are in," he said.

Debbie Grazioso, 47, of Glen Cove, hopes Congress will act. She lost her job in August and hasn't found work despite going to "interview after interview."

Grazioso has been counting on her unemployment benefits of $388 a week for her family of four. But Congress needs to act, she said.

"They need to help people get back on their feet," she said.

Grazioso isn't sure when her benefits will run out, but believes it will by the end of the year.

Asked what she will do then, she said, "I have no idea."