WPCNR QUILL & EYESHADE. By John F. Bailey. October 2, 2008 UPDATED 4 PM EDT with Labor Statistics: The New York State Department of Labor  is not seeing the layoffs predicted for Wall Street appearing yet in significant numbers in the Department filings for unemployment, according to the Department’s Communications Office.

 “There is a little upswing, but we are not seeing numbers being predicted. Not yet.  Do not forget when some Wall Street personnel were laid off  they were greeted on the street with billboards saying we’ll hire you. They immediately got other jobs. If they do not apply for unemployment benefits, we do not count them,” stated Chris Perhan of the state Labor Department Communications.

If terminations increase as expected, they will add to the financial burdens of companies making the layoffs, Ms. Perhan said. The way unemployment benefits are funded is through assessments on state employers and employees. When a person is let go,  she said, the employer’s Federal Unemployment Tax Assessment increases the next year, for each person terminated. The new assessment is usually given to the employer in the spring of the year.

 One could see a scenario where layoffs would be held off until January, to avoid FUETA increases until 2010, by  which time things might turn around. This advantage might be  a reason why the beginning of predicted unemployments have not escalated. Any layoffs will add to company’s burdens, but of course, but not to the extent of carrying the employees on payroll now if an employer cannot afford to.

Perhan said the percentage of payroll the employer usual pays is determined by a “floor” or minimum FUETA assessment, and is raised according to the number of employees the firm let go the previous year. She reports the FUETA rate for 2008 is 6.2%. Employers must pay 6.2% of the first  $7,000 in salary per employee, and that holds through December, 2008. She had no estimate at this time as to what any increased assessment would amount to per employee by next spring. She could not give a figure for how much the rate goes up per number of firings. 

The Comptroller’s Office this week not only predicted the job losses, but also stated business taxes wre down $366 Million year to year from last year, while personal income tax collection for the first six months of 08-09 were $2.7 Billion higher, but was slowing. The Comptroller’s office noted Wall Street Bonuses on which the state collects taxes expected to be 50% lower amounting to only $16 Billion.

On September 18, a State Labor Department news release stated New York State's private sector employment increased over the month by 3,000, or less than 0.1 percent, to 7,261,200 (seasonally adjusted) in August 2008.

In addition, New York State's unemployment rate, after seasonal adjustment, increased from 5.2 percent in July 2008 to 5.8 percent in August 2008 -- its highest level since June 2004. New York City's seasonally adjusted unemployment rate was 5.8 percent in August 2008, up from 5.0 percent in July 2008. The rate in the balance of the state outside of New York City also rose over this span, from 5.3 percent in July to 5.7 percent in August 2008.