The unemployment system became too small during the pandemic. It may crack again

Florida resident Joseph Louis during a May 22 rally in Miami Beach asking the state to fix its unemployment system.

Joe Raedle | Getty Images

In many ways, the U.S. unemployment system has undergone a radical shift in recent years.

Washington, DC, has extended the benefits to millions of workers who were previously ineligible. State labor agencies – those who provided assistance – have grown staff to unprecedented levels. Lots of upgraded technology and processes to issue money faster.

In one calendar cycle, they pumped out years of cash to the unemployed.

But according to some measures, the system still fell short. Many have been waiting months for benefits – and thousands are still waiting. Extensive communication – telephonically or by email – means that workers cannot easily get answers to their questions.

Fundamental shortcomings continue to hamper the country’s ability to respond more effectively to the next downturn.

“[States] ‘there is hardly a crisis after crisis, and there is no way they can rebuild to face the next crisis,’ said Alyssa Levitz, the unemployment insurance team at US Digital Response.

Broad failures

Doors are seen with a padlock at the El Cortez Hotel & Casino while the coronavirus continues to spread across the United States on April 25, 2020 in Las Vegas.

DAVID BECKER | AFP | Getty Images

Government officials began issuing eviction orders in mid-March 2020 to contain the virus. States succumbed to the intense number of unemployment claims that resulted.

Shortly afterwards, more than 6 million people applied for benefits in two separate weeks – almost 30 times the pre-pandemic tax.

In some ways, broad failures in the early days were inevitable.

Levitz said funding to bring benefits is declining and flowing. It rises in downturns and falls in good times.

US unemployment was at its lowest level in five decades before the pandemic. This means insufficient resources for staff, for example to offer an avalanche of calls.

And the pandemic quickly hit the US, an immediate upheaval that offered almost no time to help the intense economic guts.

Many states also use old-school technology that dates back to the disco era.

Benefit websites were quickly knocked off offline. States could not quickly code updates in their systems when Washington adopted pandemic mitigation measures, such as the CARES Act, to expand and improve unemployment assistance.

The real consequences: thousands of unemployed workers waited months for the benefits to come, emphasizing their ability to pay rent, buy food, and pay other bills.

By July, states had paid on time to about half of the applicants – of 90% or more pre-pandemic, according to to the Labor Department.

(The official barometer for the first payment of the benefits is 21 days.)

States have improved. But by the end of 2020, they had just released three out of four applicants on time. And about 15% of the recipients – about 122,000 people – waited at least two months for help.

‘Purposeful roadblocks’

Meanwhile, Florida’s online portal, CONNECT, started in 2013 under the supervision of then-government Rick Scott, now a Republican U.S. senator. Its design was intended to frustrate applicants and reduce the amount of benefits paid.

‘After studying how [the unemployment system] I was built internally, I think the goal was for whoever designed it, it was: ‘Let’s put so many such meaningless roadblocks along the road, so people just say, oh, hell, I’m not going to do that, current government Ron DeSantis, also a Republican, said.

Officials from Florida’s Department of Economic Opportunities did not respond to a request for comment.

At one point, officials in Florida were distributing paper applications because the state’s online system was breaking down.

Less than a quarter of Florida residents received a timely payment of benefits in June, according to federal data.

Eddie Rodriguez, who works for the city of Hialeah, will be handing out unemployment applications to people in their vehicles on April 8, 2020 in Hialeah, Florida.

Joe Raedle | Getty Images News | Getty Images

Technology still seems to be an issue 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 by a $ 900 billion aid package passed in December – about four months later.

“According to our outdated computer system, not all of these programs can be launched at once,” according to a labor department in Wisconsin. website track his progress.

“Our IT programmers need to complete extensive software coding for each program and then implement it one by one,” he added. “A modernized system can implement these programs faster, simultaneously.”

Improvements

Live Radin / Pacific Press / LightRocket via Getty Images

The situation would almost undoubtedly have been much worse without improvements made in various areas.

Early on, they ironed out bottlenecks by filing lawsuits. For example, many restricted applications to certain days of the week based on the first name of the files’ surnames.

According to US Digital Response, more than half set up online bots and some online appointment schedules.

Many also staffed staff.

California in May announced a mass hiring effort for 1,800 new temporary full-time and hourly staff. It also redirected 1,300 staff members from other areas of the Department of Employment Development – and the state government – more widely.

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Overall, the boost has more than quadrupled the number of people answering phones, processing claims and analyzing workers’ documents.

The New Mexico Department of Labor 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.

This is a major change in pre-Covid policy – and one that will continue after the crisis, McCamley said. It offers a larger pool of talent and more flexibility to respond to the next crisis, he said, as the state does not just have to target rents in Albuquerque.

“They’re better off then than they were a year ago,” said Waldo Jaquith, a senior adviser to US Digital Response, on state unemployment systems.

Fraud prevention is one of the biggest areas for improvement.

Thieves used stolen identities to claim tens of millions of dollars in benefits over the year. States have made efforts to catch up.

Legal applicants sometimes fall into the crossfire when their claim seems suspicious. Many states have agreed with third-party providers to automate and expedite the identity verification process.

New York, for example, did so in late February.

Previously, government officials took weeks to manually review and verify documents such as birth certificates, passports and driver’s licenses, according to the New York Department of Labor. The process is now digital and faster said.

These improvements come in addition to a historic level of support for federal government unemployed workers. Lawmakers, for example, boosted $ 600 weekly in benefits that exceeded any previous amount. But these corrections were temporary and their delivery depended on the state’s ability to provide assistance.

Built for a 1930s economy

Many state labor departments have been working with outdated mainframe systems since the 1970s.

H. Armstrong Roberts | Retrofiel RF | Getty Images

First, many states work with outdated 1970s mainframe computing systems – expensive and time consuming to fix.

In January, Colorado completed a project of more than a million years to modernize its system. The new one, called MyUI +, cuts the required programming time by almost half compared to the old system, according to to civil servants.

“To say that we are developing a 30-year-old heritage mainframe built on three-decade-old language and that we are only now modernizing, it seems inconceivable that it has taken so long. , “said Cher Haavind, Deputy Executive Director of the Colorado Department of Labor and Employment, said. “We agree.

“We wish we were here earlier.”

According to McCamley, who runs the New Mexico labor agency, shifts are also being opened up in the safety net.

They made spots. Are these the kind of patches that wear out, like on a tire?

Andrew Stettner

senior fellow at the Century Foundation

“Unemployment was created in 1935 for an economy that does not exist today,” he said.

While people used to work for one company a century ago, many people now work multiple jobs, McCamley said. This places a burden on countries, especially those with inefficient systems, because they have to collect wage data from each of the employers.

Greater mobility is likely to lead to Americans working across state lines, which need better erasure of information about the country, he added.

Congress will also have to determine whether a program should be set up permanently to provide benefits to the self-employed, freelancers and gig workers, who usually do not qualify for state benefits.

The CARES Act provides a temporary solution, Pandemic Unemployment Assistance, which has supported more than 7 million people since mid-February.

Correction: Washington, DC, has extended the benefits to millions of previously ineligible workers. An earlier version of this article misidentified the jurisdiction in question.

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