‘A Safety Net That’s Ripped’: Problems Plague State Unemployment Systems

Back at the end of March, around the time the coronavirus outbreak first sent the nation’s economy into a tailspin and forced widespread restaurant closures, Sarajane Tracy was laid off from her job as a server at an Olive Garden in Florida.

Tracy, who is in her fifties and lives in New Port Richey, northwest of Tampa, worked for 25 years as a horse trainer before she took the server job and says she’s never applied for unemployment in the past. 

“I’ve worked my entire life, I’ve never asked for a handout, ever,” she said this week.

But like millions of other Americans who have had their jobs and lives upended by the virus, Tracy has tried to turn to unemployment insurance as a means to get by during the pandemic.

As she tells it, her experience applying to get benefits has been one problem after another.

“I’m so frustrated with the whole system, I don’t even know what to do,” she said.

The problems she describes are not unique. Over four months into the public health crisis, as the virus flares up again in some places, residents in Florida, and in other states, continue to face severe delays and other roadblocks accessing unemployment benefits. 

Phone lines are flooded, staff are overwhelmed, computer systems are glitchy. Unemployment claims have come down in past weeks as people return to work, but remain at historically high levels. 

Desperate residents in Alabama in recent weeks resorted to camping out overnight outside of buildings where they hoped to meet with unemployment staff who could help them. In Oklahoma there were similar scenes, with lines that stretched over 200 people deep.

Experts say that many of the states that are now having the worst problems implemented policies that made it difficult for people to get benefits even before the virus slammed the economy. Some of these same states are also running their systems on subpar technology. 

Now, they’re dealing with a historic wave of claims.

"Unsurprisingly, when states make it hard to get benefits in normal times, they make it impossible to get benefits in a challenging time,” said Michele Evermore, a policy analyst with the National Employment Law Project. “In Florida, I would go so far as to say they deliberately sabotaged their system coming out of the last recession,” she added.

Tracy said she applied for benefits immediately after getting laid off in March. At the time, she didn’t have internet service, so she had to call someone with the state’s unemployment program, which is managed by the Department of Economic Opportunity.

A staff person Tracy spoke to on the phone took down her information and that was that. But she later received a notice saying there was a problem with her application. When she tried to call in to get the issue fixed, she found it impossible to get through to anyone.  

She said she called daily for weeks. “I would try 15, 20 times a day,” she said. Eventually, in late May, she contacted her local congressional representative. After that, about two months after getting laid off, she received two checks—one for $175 and another for $600.

The one check is likely a payment for the $600 emergency unemployment benefit that federal lawmakers approved after the virus struck. That supplemental benefit, which is supposed to be available weekly, is set to expire this month.

As of Wednesday, the two checks were all Tracy said she received in unemployment insurance. She had gotten a text notification that about $1,600 had been issued to her on a bank card, but had not received that card. “No direct deposits, I’m checking all the time,” she said.

She’s picking up eight to 12 hours a week at the Olive Garden, but said that it’s slow and sometimes she’s cut from her shift early. 

“I think I have about $220 left to my name at the moment,” she said.

The Florida Department of Economic Opportunity acknowledged a request for comment for this story, but did not follow up. Gov. Ron DeSantis’ office did not respond to a request for comment. 

DeSantis, a Republican, has conceded that the state's unemployment system is a “jalopy” and directed the state inspector general to investigate it. Meanwhile, two Democratic U.S. senators have called on the U.S. Department of Labor to investigate the state’s “uniquely poor” performance processing claims.

But Florida isn’t alone. Since the virus threw gravel in the gears of the nation’s economy, state agencies that handle unemployment insurance are dealing with unprecedented numbers of claims. And some by their own admission have struggled to keep up with the workload.

Jeff Fitzgerald, director of Colorado’s unemployment division, told The Denver Post last week that the state has two call centers with enough staff to field about 4,000 calls a day, but that there are currently about 12,000 calls coming in daily on average.

“If you’ve got this much demand, there is no way we can train fast enough and there are not enough administrative dollars that are available that we could address that. No, is the bottom line,” he told the Post. “That is why you must diversify the way you serve people.”

Fitzgerald explained that the state was working alongside Google on a project to come up with a “virtual agent” to help assist people and said that beefing up the department’s website with other additional information and features could also help.

Complicating matters further for states is that during the course of the virus outbreak, some unemployment insurance systems, such as Washington’s, have been targeted by organized crime rings that have attempted to siphon away millions of dollars in fraudulent claims.

The nation’s high mark for initial weekly unemployment claims before the pandemic was around 695,000 back in 1982. Claims reached around 650,000 to 660,000 in the Great Recession era. 

In the early days of the coronavirus crash, in late March and early April, initial weekly claims rocketed up over 6 million. They’ve since receded into the 1.3 million to 1.4 million range, while the number of continuing claims for the week ending June 27 was about 18.1 million.

Evermore points out that some states are handling the crush of claims better than others. In general, she said, “look at the states that passed laws to deliberately reduce access to benefits and you'll see that those are the states that failed. There’s a really high correlation there.”

Laws along these lines tend to limit who is eligible for benefits, or impose strict requirements for how people must check in with the state on a recurring basis to maintain their benefits.

"Nobody pays attention to the unemployment insurance system when the economy is fine,” Evermore said. “And that's when they cut benefits, when nobody's looking, nobody's organized and then the state just finds itself unable to pay benefits when it really wants to.”

There can be shortcomings with state computer technology as well. 

Evermore said some states have programmed their computer systems to over-police for fraud and overpayments, which can end up flagging legitimate claims. Overpayments have increased a little over the past decade, she said, while erroneous denials have roughly doubled.

There are also states running unemployment systems using decades-old mainframe computer technology. Those that do upgrades, Evermore said, often carry them out with little user testing, and adopt systems that allow for too much automated decision making.

“Immediately after they put the new system in place, denials go up,” she said. And in some states, she added, “computer programs are really just set up to slow benefits at every turn.”  

In Alabama, about 19,000 people filed initial unemployment claims for the week ending July 4, according to state figures. For the week ending June 20, the number of people filing for continued unemployment benefits in the state was around 141,000—up about 124,000 from a year before, the U.S. Labor Department reported on Thursday.

Rachelle Greczyn, an attorney at Legal Services Alabama, a nonprofit law firm that provides legal aid to lower-income residents in the state, said her office has seen a big upswing in the number of people who are calling and looking for help with unemployment claims.

In usual times, many unemployment cases her office gets involve people appealing denials, or disputes over benefit amounts. But lately, Greczyn said, that’s changed. 

There are some denial appeals, she said—some that are taking months to go through. “But we also have a lot of people who are kind of in a limbo state and don’t know what’s going on.” 

Greczyn said one of her clients received a letter from the unemployment office in late May saying she was approved for benefits, but was later informed that she’d been denied. “She’s been without power for a month and has three kids,” Greczyn said.

Prior to the pandemic she said her office was typically able to get in touch with staff at the state Department of Labor, which manages Alabama’s unemployment program, and could get hearings scheduled fairly quickly. Now that’s not so.

She and other lawyers, like their clients, are struggling to get people on the phone, she said. There’s talk of a “super secret” backchannel phone line that some state lawmakers and attorneys have gotten access to, but Greczyn doesn’t have it. 

“We’re trying to find someone who we can talk to at the Department of Labor for our clients,” she said. “It’s hard to get a hold of anyone.” She added that an employee with the department who she was able to speak with earlier this week, “sounded kind of shell shocked.”

In the wake of reports that people were spending the night outside a temporary unemployment center in Montgomery to hold spots in line, Alabama did announce that it was setting up an appointment system for people trying to get issues with their benefits resolved in person.

The Alabama Department of Labor did not respond to a request for comment. A spokesperson for Gov. Kay Ivey’s office referred a request for comment to the department.

In Florida, some people seeking benefits have turned to Facebook groups for support and to press the state for changes.

Kelly Johnson has taken a lead role in a group called Fix It Florida. Johnson, who lives in Dunedin, got laid off in mid-March. She’d been working as a restaurant manager and gym manager. She applied for unemployment right away, but didn’t see a check until early May.

The Department of Economic Opportunity said Saturday that, between March 15 and July 10, it had paid about 1.6 million unemployment insurance claimants a total of nearly $9.8 billion.

Johnson acknowledges that benefits have been flowing. “But they've been very sporadic,” she said. “The payments haven’t always been regular. They haven’t been what we’ve calculated we’re owed.”

“We still have a website that is constantly crashing,” she added. “A lot of people are missing a lot of money.”

She said a specific thing that her group would like to see is a way to track the $600 a week federal benefit separate from state benefits. The state doesn’t offer this currently, she said.

More broadly, she’d like to see accountability from the elected officials who are responsible for the unemployment program and more recognition from them that the system has major problems. 

“I don’t know why, we're four months into this, that it hasn't gotten any better,” she said.

Johnson’s frustration with the unemployment situation boiled over to the point that she decided to run for office, mounting a long shot bid as a Democrat for a state House seat against an incumbent Republican. It’s her first foray into electoral politics.

“I've lived here my whole life. I'm a single mom,” she said. “Everything that they vote on, I've probably dealt with.”

At this point, Johnson said she’s not too worried about her finances. To augment the unemployment payments she received, she had some money saved, and she also got a boost from the so-called stimulus check payment that the federal government sent to many Americans earning under $75,000 a year to help them weather the pandemic.

“I'm lucky,” she said.

Tracy, the restaurant server, was in a less comfortable spot this past week. 

She said she hadn’t paid her rent for July yet, after paying earlier months using the unemployment benefits she did get and the stimulus check money. Her boyfriend has offered to help her out with rent, and she may also be able to turn to her mom for help if she needs to.

“I shouldn’t need any help. I should be able to do this by myself. So that feels kind of belittling. But what else can I do?” Tracy said. Recently, she said she heard DeSantis talking about the unemployment program on TV and “wanted to just jump through the television screen and say ‘I haven’t had money for three and a half months.’”

“The system that I’m supposed to be able to rely on is completely nonexistent,” she said. “There’s no point in having a safety net that’s ripped.”