COVID-19 Exposed Holes In Unemployment Insurance

I started working as the part-time interim district office director for a New York State Assemblymember in late January. I’m a national workforce development consultant, but over the last six years my own career has been experiencing the same insecurity that many Americans have been facing since 2008. By January, after six months of fruitless job searching, I needed a “survival job” to make ends meet. The district office director role paid enough for me to cover my rent but nothing else. It was a six-month position. I felt confident I would secure a full-time job before the position ended.

Two months later, the non-essential worker work-from-home orders began rolling out state-by-state across the country in response to the COVID-19 pandemic. Overnight, the most powerful economic engines in our country came to a halt. New York shut down at 8 pm on March 22nd. And my part-time constituent relations job took on real urgency. I spent the first few weeks answering desperate calls from constituents who needed food but had no way to get it or pay for it. Our office stood up an emergency meal delivery program to meet the demand.

Then, on March 27th, President Trump signed the CARES Act into law, introducing major changes to unemployment insurance for Americans. The Corona Aid, Relief, and Economic Security Act was intended to provide immediate support to American workers experiencing the first wave of the COVID-19 pandemic. The legislation added $600 to states’ weekly unemployment insurance payments for each recipient from April 5th to July 31st and, for the first time, extended unemployment benefits to 1099 (self-employed) workers.

Initial unemployment claims in New York City spiked 2,637% year over year the week ending in March 28th, with statewide claims jumping 2,674%. (As of this writing, employment claims are now 1,749% higher in New York City than they were last year and 1,489% higher statewide.) A system that had been handling 80,000 claims a week statewide was now being asked to process 250,000 claims.

In late April, the calls to the office help lines changed. People who had filed for unemployment when the closure orders were first announced were still waiting for a response… and they were growing desperate. A constituent alerted me to “the form”- an Elected Official Inquiry application that I could fill out for constituents that would trigger a call from the Department of Labor. The first week I began tracking numbers, I answered 38 calls from constituents seeking help with their unemployment insurance claims. Two weeks later, the number had tripled. Constituents simply weren’t hearing anything from the Department of Labor. The lack of communication, predictably, drove them to call repeatedly. People deputized their children with phones and downloaded robocalling apps, trying anything they could to break through the Byzantine snarl of applying for unemployment insurance. Facebook groups for frustrated applicants flourished. My phone number started to get passed around by people who had finally received help.

Our unemployment systems were simply unprepared to deal with overnight unemployment across every industry in the country. Years of underinvestment in technology and human support left state agencies swamped. Twelve state unemployment systems still run on ancient computers using COBOL, an Eisenhower-era computer coding language that is obsolete…except in unemployment offices (and banking systems). But perhaps even more difficult than lugubrious hardware and understaffed offices are the basic processes and assumptions that structure the process of applying for and receiving unemployment insurance.

The unemployment system dates back to 1935. It was established through the Social Security Act and is funded through a combination of federal and state taxes. The world of work has changed tremendously since 1935, however. It is time that our unemployment systems joined the modern age.

Here are three suggestions for how our unemployment systems need to change based on my conversations with frustrated citizens over the last month.

Expand Coverage

People’s work lives are no longer stable or linear. We work for multiple employers with multiple contract arrangements. Work is no longer place-based (especially during this new pandemic era). Approximately 33% of the American workforce is self-employed in some fashion. Our unemployment insurance needs to reflect the full universe of ways people who pay taxes earn money and allow for support when they are no longer able to make a living. Having included 1099 workers in unemployment insurance coverage during COVID-19, we cannot go back to excluding them after this is over. As a result, claim forms need to be re-worked to become as flexible as our work lives.

States also need to end income threshold requirements which are unfairly biased against women and workers with less education. There is a persistent mythology in some circles that unemployment insurance must remain limited and tightly controlled lest people take advantage of the system and decline to contribute their labor to our national economy. As economists point out, however, the best way to incentivize people to work isn’t by preventing them from receiving critical unemployment insurance coverage–it’s by increasing wages.

This will require untangling the complicated patchwork of federal and state funding. It might even lead to some degree of national standards for minimum unemployment insurance coverage, tied to local cost of living figures.

Simplify & Prioritize Communication

The most consistent complaint I hear is around communication. Claims stuck in pending for weeks on end. No updates. Complicated log-in systems. No way to correct mistakes in forms. No way to clarify questions about the information the Department of Labor is seeking.

People expect responsive systems. In an age where we can tap our phones a few times and instantly send money to people on the other side of the world, asking hard-working people to wait for weeks on end with no idea whether their claim has been accepted and when they can expect money to pay their bills and buy food is intolerable.

• We need to institute call back systems, chat bots, and case numbers so that people can feel confident that they will get the information they need rather than enduring endless wait times and busy signals. Every other customer service call line has this ability now. Why not unemployment systems?
• Forms need to use plain language and clear questions to get at the information they are seeking in a way that is relevant for the current crisis. “Were you able to work last week?” is a very confusing question during the pandemic. If online tax filing systems can guide users through arcane tax law, why can’t we adopt similar user-friendly guides for filing for unemployment?
• We need to eliminate all “searching for work” reporting requirements. Send a monthly email or automated phone call- “Just checking because we want to celebrate with you- have you started a new job yet?” Looking for a job takes a very long time these days. Interview and hiring processes, already attenuated before the pandemic, are likely to get even more drawn out. Nothing changes swiftly. There is no need for weekly updates.

Humanize

Our UI systems need to adopt a public servant mentality rather than a bureaucratic mindset. You are dealing with people who are experiencing a lot of stress and their Kafka-esque encounter with the UI system does not inspire confidence, clarity, or comfort with government. 

With better communication, more inclusive policies, and more human interactions, work arounds like the Elected Official Inquiry form wouldn’t be essential tools. For as many peoples as I’ve helped, there are thousands more whose stress is mounting as they fruitlessly try to navigate these overburdened systems because they haven’t heard about The Form.

My workforce development experience now includes being a “job mortician”. I spend my days as therapist / customer service specialist, helping people get in line for a call back from the Department of Labor. The calls have become more panicked in recent days. “Patience… patience,” I counsel repeatedly. “I know you’ve been waiting for two months already, but you need to wait just another week more.” But at the end of June, I will likely file for unemployment insurance and join them in line. I have learned that it’s not enough just to hire better. We have to unemploy better, too.

Susanna Williams is the Founder & Lead People Consultant at Hireable, a recruitment & retention services firm. She was a participant in the New America ShiftLab on the future of work in Indianapolis.