Hundreds of millions at stake for New York’s working families: Current tax debate to determine future of key work-supporting tax credits

September 27, 2010. Low- and moderate-income New Yorkers have a huge stake in the tax debate now going on at the national level: over $600 million annually in work-supporting tax credits. Enhancements to the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) that were made by the American Recovery and Reinvestment Act (ARRA) will expire at the end of 2010 unless extended by Congress. A new report from the Fiscal Policy Institute reviews the workings of these two tax credits, how they were changed by the Recovery Act, and why those changes should be made permanent. Press release >> and full report >>

City Poverty Rate Jumped as the Economy Slumped

September 27, 2010. An article by James Parrott, FPI’s deputy director and chief economist, who writes regularly for Gotham Gazette’s Economy section. Article >>

True/False: Public Employees Have Too Many Benefits

September 21, 2010. In this installment of “Wonk Wars,” FPI’s James Parrott discusses labor compensation with the Manhattan Institute’s Steve Malanga. On the web >> and on the air >>

Federal Tax Policy at a Crossroads

September 21, 2010. This policy brief compares the distributional impacts on New York taxpayers of President Obama’s plan and an alternative plan laid our in the Senate Republican leadership bill S.3773 – and looks at the impact of the same two proposals on programs and services. Conclusion? There are five reasons that the Bush tax cuts for the wealthy should be allowed to expire as scheduled, and the modifications of those tax cuts enacted as part of the Recovery Act should be made permanent.

Statement from James Parrott on the National Bureau of Economic Research Announcement on the Business Cycle

September 20, 2010. Most New York workers remain mired in a high unemployment, unacceptably slow recovery, despite today’s announcement by the NBER that the national recession bottomed out in June 2009, 15 months ago. By the most optimistic projections, three to four years of faster job growth are required to bring the unemployment rate back down to the pre-recession. More forceful economic stimulus measures must be applied to prevent this Great Recession from turning into another Great Depression. Statement >>

Extension of the TANF Emergency Contingency Fund is Essential to Bringing More Jobs and Needed Financial Support to New York State

September 17, 2010. The very tight budget situations that state and local governments continue to face may force them to reduce or eliminate services for needy families. This brief shows that an extension of the TANF Emergency Contingency Fund will help New York and the other states to continue their safety net programs without ravaging other parts of their budgets.

Poverty on the Rise in New York and Nation in 2009: Federal Assistance Lessened Recession’s Impact

September 16, 2010. The Census Bureau today released state-level data showing that the poverty rate in New York State rose dramatically from 14.2 percent in 2008 to 15.8 percent in 2009. The number of New Yorkers in poverty jumped by 284,000 to a little over three million. Only once since 1980 – from 1989 to 1990 – has the poverty rate risen more than it did in 2009. The new data also show that 2009 brought a large increase in the national poverty rate, which jumped to 14.3 percent from 13.2 percent in 2008. Press release with data >>

The Great Recession Lingers in New York City and its Neighborhoods

September 15, 2010. Economic overview and outlook for New York City – a presentation by FPI’s deputy director and chief economist, James Parrott. Presentation >>

Bob Brandon, Daphne Kenyon, Bob Cohen

September 9, 2010. Bob Brandon, Campaign Director of Americans for Responsible Taxes, discussed the current debates about the federal tax cuts that are scheduled to expire at the end of 2010, including the tax cuts enacted under President Bush in 2001 and 2003. He also discussed and the improvements in the American Opportunity Tax Credit (for college expenses), the Child Tax Credit, and the Earned Income Tax Credit that were enacted as part of the 2009 Recovery Act and which benefit millions of low- and moderate-income working families.

Daphne Kenyon, a public finance economist and a Visiting Fellow at the Lincoln Institute of Land Policy discussed the studies that she and her colleagues at the Lincoln Institute have done in recent years on various approaches to property tax relief, and why they concluded that a well- designed Circuit Breaker is the most effective, equitable and efficient way of providing property tax relief.

Bob Cohen, Policy Director, for Citizen Action of New York and its affiliated research organization, the Public Policy and Education Fund discussed the importance of the federal budget to New York State and the impact of the tax policy debates currently going on in Washington, DC. Bob also discussed how interested organizations and individuals can get involved in the work of Americans for Responsible Taxes, whose New York activities are being coordinated by Citizen Action of New York.

State of Working New York 2010: New York starting to see job growth but not yet recovery

September 5, 2010. While New York and the nation have begun to see some modest job growth, unemployment rates remain unacceptably high and recovery is not yet helping most New York workers. New York is hardly unique; from December 2007 through December 2009, the state lost 250,000 jobs, a 2.8 percent job decline. Forty states had even worse job performance over that period. Those with managerial/professional occupations are earning more in New York City, while those in non-managerial/non-professional occupations are earning less. Both groups are making less in areas outside the city. The State of Working New York 2010 is the latest of FPI’s  examinations of the conditions facing workers and working families in New York State.

FPI’s State of Working New York series, published biennially since 1999, provides comprehensive and up-to-date analysis of the data available on the conditions facing workers and working families in New York State.

New York starting to see job growth but not yet recovery
High unemployment persists, most states fare far worse than New York

While New York and the nation have begun to see some modest job growth, unemployment rates remain unacceptably high and recovery is not yet helping most New York workers, according to the latest annual report on the state of New York’s economy released today by the Fiscal Policy Institute (FPI), a nonpartisan research and education organization.

Most of New York’s job growth has taken place in New York City which experienced a net employment increase of 67,000 during the first seven months of 2010. It is estimated that the rest of the state – the New York City suburbs and upstate – saw a net job gain of fewer than 10,000. One in every six New York workers is unemployed or underemployed, and half of the unemployed have been without work for more than six months. Despite the increase in jobs and the decline in the unemployment rate, first time unemployment insurance claims data for the months of May through July indicate that two years after the recession started in New York, workers are still losing jobs at a pace thirty percent greater than before the recession.

“You can hardly call this a recovery if one-and-a-half million New Yorkers are unemployed or underemployed and if the overwhelming majority of those lucky enough to hold onto their jobs have seen their weekly earnings shrink as a result of the recession,” said James Parrott, the Fiscal Policy Institute’s Deputy Director and Chief Economist. Parrott attributed the dismal earnings trend to the impact of prolonged high unemployment that reduces the bargaining power of workers in securing better wages.

In New York City, there has been a sharp divergence in wage trends with those in managerial/professional occupations experiencing median weekly earnings growth of 9.5 percent between the first half of 2007 and the first half of 2010, while weekly earnings for workers in non-managerial/non-professional occupations fell by 4.3 percent. Outside of the city in the suburbs and upstate, both managerial/professional and non-managerial/non-professional workers experienced an erosion in weekly earnings (decreases of 1.0 percent and 5.9 percent, respectively.)

From December 2007 – the start of the national recession – through December 2009, New York lost 250,000 jobs. This 2.8 percent job decline for New York meant that 40 states had even worse job performance over that period. New York’s 11 upstate metro areas experienced smaller job losses than most of the 365 metro areas in the U.S. The report noted that this certainly does not mean that upstate New York areas were spared the recession’s devastating effects, only that New York was hit a lot less hard than most parts of the country.

Pointing to the relatively better job and per capita income growth performance for upstate metro areas, FPI’s Executive Director Frank Mauro stated, “Claims that state and local government spending patterns or high taxes here are holding back New York’s economic growth are often just that, claims that are not substantiated by credible economic analysis. Given the effects of the Great Recession in reducing employment and undercutting state and local tax revenues, New York’s economic and budget challenges are far from unique.”

Other highlights from the FPI report include:

  • New York’s recession job losses have been greatest in manufacturing (70,000), finance (50,000), construction (46,000), state and local government (40,000), and retail (39,000).
  • Private educational services and health care and social assistance have added jobs in New York over the past two years at nearly identical rates as seen for the nation as a whole.
  • Unemployment rates are higher among men, blacks and Hispanics in New York. The broader unemployment rate that factors in discouraged workers and the underemployed was 21-to-25 percent for blacks and Hispanics in New York City and in the rest of the state during the first half of 2010.
  • Major forecasts foresee weak economic and job growth and continued high unemployment through 2011. It is doubtful whether New York City, where most of the state’s 2010 job growth has occurred, can sustain that growth if national economic and job growth remain tepid.

Parrott noted that the American Recovery and Reinvestment Act (ARRA) likely saved or created 200,000 jobs in New York. He stated, “The Recovery Act helps explain why New York’s job loss from the Great Recession was much less than had been feared in late 2008 in the immediate wake of the September 2008 financial market collapse.” Parrott continued, “The Recovery Act was critical in rescuing an economy that was headed off a cliff in late 2008. However, by itself it has not been sufficient to generate a sustained recovery. Policy makers need to focus again on spurring aggregate demand and creating private sector jobs, averting economy-shrinking cuts in state budgets, and investing in productivity-enhancing infrastructure, particularly such areas as mass transit.”


%d bloggers like this: