The US unemployment system was inadequate in the early days of the pandemic. It could buckle again
Florida Joseph Louis asked the state to fix its unemployment system in a protest on May 22nd in Miami Beach.
Joe Raedle | Getty Images
In many ways, the US unemployment system has changed radically over the past year.
Washington expanded benefits to millions of previously ineligible workers. The state employment agencies charged with granting grants have upgraded their staff to an unprecedented level. Many have improved technology and processes in order to spend money faster.
In a calendar cycle they pumped out years of money from the unemployed.
However, by some standards, the system fell short of expectations. Many have waited months for benefits – and thousands are still waiting. Thanks to extensive communication – whether by telephone or email – employees cannot simply answer their questions.
Fundamental flaws remain that may affect the country’s ability to respond more effectively to the next downturn.
“”[States] barely hobble from crisis to crisis, and there is no way to rebuild them to tackle the next crisis, “said Alyssa Levitz, the head of the unemployment insurance team at US Digital Response, a nonprofit that advises states on their benefit systems Has.
The doors of the El Cortez Hotel & Casino are padlocked as the coronavirus continues to spread on April 25, 2020 in Las Vegas, United States.
DAVID BECKER | AFP | Getty Images
State officials began issuing shutdown orders in mid-March 2020 to contain the virus. The states gave way under the strong volume of the resulting unemployment claims.
Shortly afterwards, more than 6 million people applied for benefits in two separate weeks – almost 30 times the exposure before the pandemic.
In some ways, far-reaching failures were inevitable in the early days.
Funding for managing benefits tends to dwindle in boom-and-bust cycles, Levitz said. It rises in downturns and falls in good times.
Unemployment in the US was at its lowest level in five decades before the pandemic. This meant inadequate resources for employees to handle, for example, a flood of phone calls.
And the pandemic swiftly swept the US, an instant jolt that left almost no time to prepare for the intense economic blow.
Many states also used old school technology from the disco era.
Benefit websites went offline quickly. States were unable to quickly code updates into their systems when Washington passed pandemic relief measures like the CARES bill to expand and improve unemployment benefits.
The real world impact: Thousands of unemployed workers waited months for benefits to arrive, emphasizing their ability to pay rent, buy groceries and other bills.
By July, states made about half of applicants on-time payments – 90% or more prior to the pandemic, according to the Department of Labor.
(The official barometer for a timely first payment of benefits is 21 days.)
States have improved. However, by the end of 2020, they only granted 3 out of 4 applicants timely benefits. About 15% of the recipients – around 122,000 people – had waited at least two months for help.
Meanwhile, Florida online portal CONNECT made its debut in 2013 under the supervision of then Governor Rick Scott, who is now a Republican US Senator. The design should frustrate applicants and reduce the amount of benefits paid.
“After studying how [the unemployment system] was built in-house, I think the goal was for anyone who designed, it was, ‘Let’s get so many pointless roadblocks on our way so people just say, oh the hell with that, I’m not going to do that . “Current Governor Ron DeSantis, also a Republican, said.
Florida Department of Economic Opportunities officials did not respond to a request for comment. A spokeswoman for Scott denied the allegations. The former governor has taken monetary measures such as fines to hold a third-party system architect accountable, she said.
At one point, Florida officials were handing out paper applications because the state’s online system collapsed.
Less than a quarter of Florida’s residents received a timely payment of benefits in June, the state’s nadir, according to federal data.
Eddie Rodriguez, who works for the City of Hialeah, distributes jobless claims to people in their vehicles on April 8, 2020 in Hialeah, Florida.
Joe Raedle | Getty Images News | Getty Images
Technology is still proving to be a problem for some states.
Wisconsin, for example, estimates that some self-employed and gig workers will have to wait until the end of April to receive additional unemployment benefits offered through a $ 900 billion aid package passed in December – about four months later.
“Our outdated computer system can’t start all of these programs at the same time,” according to a Wisconsin Department of Workforce Development website that tracks progress.
“Our IT programmers need to do extensive software coding for each program and then deploy it individually,” he added. “A modernized system would allow these programs to be implemented more quickly and concurrently.”
Lev Radin / Pacific Press / LightRocket via Getty Images
Without a few improvements in several areas, the situation would undoubtedly have been much worse.
They resolved bottlenecks early on by changing the filing procedures. For example, many restricted applications to specific days of the week based on the first letter of the filer’s last name.
According to US Digital Response, more than half have introduced online chat bots and some debuted online schedules.
Many have also increased their staff.
California announced a mass hiring of 1,800 new full-time and hourly fixed-term workers in May. In addition, 1,300 employees from other areas of the employment development department – and the state government in the broader sense – were diverted.
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Overall, the increase quadrupled the number of people answering phones, processing claims, and analyzing work documents.
New Mexico’s Department of Workforce Solutions has doubled its call center staff since March last year, according to Cabinet Secretary Bill McCamley.
The agency hires people from across the state to work remotely.
That’s a big change from pre-Covid politics – and one that will continue after the crisis, McCamley said. This offers a larger talent pool and more flexibility to react to the next crisis, since the state does not only have to hire new employees in Albuquerque.
“They are better off than they were a year ago,” said Waldo Jaquith, senior advisor at US Digital Response, of government unemployment schemes.
Fraud prevention is one of the biggest areas for improvement.
Thieves have used stolen identities to access tens of billions of dollars in benefits over the course of the year. States have made efforts to contain them.
Eligible applicants sometimes get caught in the crossfire when their claims seem suspicious. Many states have signed contracts with third-party providers to automate and expedite the identity verification process.
New York, for example, did so in late February.
Previously, it took state labor officials weeks to manually review and authenticate documents such as birth certificates, passports, and driver’s licenses, according to the New York State Department of Labor. That process is now digital and faster, the agency said.
These improvements came on top of historic federal government support for the unemployed. For example, lawmakers gave benefits that far exceeded any previous amount a weekly add-on of $ 600. However, these corrections were temporary and their delivery depended on states’ ability to provide assistance.
Built for a 1930s economy
Some are skeptical that states will maintain momentum after the crisis.
“They put in patches,” said Andrew Stettner, a senior fellow at the Century Foundation, a progressive think tank. “Is it the kinds of stains that wear out, like on a tire?”
Many of the “patches” – such as recruitment and resource reallocation – were also introduced during the Great Recession.
A decade ago (as in the Covid crisis), these approaches had deficits such as “critical time delays and a lot of confusion by states,” according to a report by the National Association of Workforce Agencies. (For example, it takes weeks to train new employees.)
Large structural stumbling blocks are ubiquitous.
Many government employment offices use obsolete mainframe computer systems from the 1970s.
H. Armstrong Roberts | Retrofile RF | Getty Images
For one thing, many states are using outdated mainframe computer systems from the 1970s – expensive and time-consuming to repair.
In January, Colorado completed a multi-year, multi-million dollar project to modernize its system. The new system called MyUI + cuts programming time by almost half compared to the old system, according to state officials.
“To say we are working on a 30-year-old legacy mainframe based on a three-decade-old language and we are modernizing. It seems inconceivable it took so long,” said Cher Haavind, associate general manager of Colorado Ministry of Labor and Employment said. “We agree.
“We wish we had been here earlier.”
McCamley, who runs the New Mexico employment agency, also says work postponements expose holes in the safety net.
They put patches on. Are they the kind of patches that wear out like a tire?
Senior Fellow at the Century Foundation
“Unemployment was created in 1935 for an economy that no longer exists today,” he said.
While people worked for a company a century ago, many now work multiple jobs to make ends meet, McCamley said. This puts a strain on states, especially those with inefficient systems, as they have to collect wage data from each of these employers.
Greater mobility will likely result in Americans working across state lines, which will require better information sharing across borders, he added.
Congress must also decide whether to establish a permanent program that will benefit the self-employed, freelancers, and gig workers who are normally not eligible for government benefits.
The CARES act offered a temporary solution, Pandemic Unemployment Assistance, which was helping more than 7 million people in mid-February.
CORRECTION: The federal government in Washington has expanded benefits to millions of previously ineligible workers. In an earlier version of this article, the jurisdiction in question was incorrectly identified.