Overburdened unemployment system’s woes persist.
Wisconsin working to fix issues exposed by COVID
Severe problems with the state’s unemployment system were exposed during the COVID-19 pandemic and became an ongoing story throughout the coronavirus crisis in Wisconsin.
And just as with the pandemic, though the problems have receded, they haven’t gone away.
Here is an update on where we stand with unemployment in the state.
But first, a look back at where we came from:
The onslaught of joblessness took the system by storm
By the beginning of June 2020, it was painfully clear there was something amiss with the unemployment system in the state. The Department of Workforce Development was staffed to handle the low rates of unemployment the state had seen for many months leading up to the pandemic. When tens of thousands of people started claiming benefits, employees weren’t able to keep up.
The Department of Workforce Development hired hundreds of workers, but wasn’t keeping up with the influx of claims that started in late March as Gov. Tony Evers made the call to keep people “Safer at Home.” Calls were going unanswered for those with questions about their applications. Claims were waiting in an ever-growing queue for processing and payout, reaching over 800,000 unpaid claims in early August.
After months of struggles, Evers asked the then-Secretary Caleb Frostman to step down in September, citing a lack of progress in clearing claims and getting money to people who needed it. Evers designated Amy Pechacek as the temporary leader at that time, and made her secretary-designee in December, after a partnership with Google Cloud she championed helped to clear the massive backlog of claims.
By December, regular unemployment claims were moving more quickly through the process, but those waiting on benefits from federal programs were still experiencing delayed payments or denials that they believed were incorrect.
And other problems have persisted for those on unemployment. The state’s outdated unemployment system has required consistent updates for the federal unemployment benefits, sometimes delaying payments by months.
As of July 24, the number of appeals waiting to go before a judge is still more than 13,000, with nearly 4,400 scheduled but not heard yet.
What is the status of the additional unemployment programs issued by the federal government?
Four unemployment programs were launched by the federal government to help those who may not qualify for unemployment still get benefits. The programs were funded by the federal stimulus programs. All of the federal benefits will end Sept. 6.
Federal Pandemic Unemployment Compensation: Provided the extra $600 or $300 to everyone receiving unemployment payments.
Pandemic Emergency Unemployment Compensation: Provided additional weeks of unemployment payments after a person exhausted their regular unemployment benefits.
Pandemic Unemployment Assistance: Provided unemployment to people not normally eligible for unemployment, such as those who had to leave jobs to provide child care, independent contractors or self-employed individuals.
Mixed Earners Unemployment Compensation: Provided $100 a week for self-employed individuals also receiving regular unemployment for another job.
Everyone agrees: Upgrades are needed to the state’s outdated system
The old system, which dates back to the 1970s, was known to be an issue since at least 2007 but never updated. Three governors and hundreds of lawmakers knew the system could be a liability if job losses spiked, but failed to take action.
In late February, Evers signed a bill into law to update the system, which will cost about $100 million.
So far, the department has completed some steps in the overall upgrade. Earlier this spring, the online claims portal was updated to improve functionality and in June, the department entered into a partnership with a business that will update the phone system, according to the department.
The department is now asking for proposals from companies for the overall system upgrade. Proposals were due to the department by July 16 and will now be evaluated by the state. One proposal will be chosen for the upgrade.
Was Wisconsin the only state with issues?
Wisconsin was far from the only state with unemployment problems. Many states faced similar issues with understaffing and struggled to implement federal programs quickly, according to a May 25, USA TODAY report.
Outdated systems were also an issue across the board, too.
Where we stand today, by the numbers
As of July 24, the most recent data available, Wisconsin has 52,522 regular weekly claims and 6,781 initial claims for regular unemployment, according to the department. At this time last year, there were 208,873 and 22,832, respectively.
As far as the federal programs, 23,418 people filed a weekly claim for Pandemic Unemployment Compensation and 687 filed an initial claim; 17,544 people filed a weekly claim for Pandemic Unemployment Assistance and 686 people filed an initial claim; 27 people filed an initial claim for Mixed Earners Unemployment Compensation.
Though the backlog of unemployment claims is long gone, the state is still struggling to get through an abundance of appeals. More than 4,400 appeals have been scheduled for a hearing with an administrative law judge, and another 13,282 are awaiting scheduling.
Some special unemployment provisions have expired, some live on for now
Since the beginning of the year, some aspects of pandemic unemployment have been ended, such as the suspension of the one-week waiting period in early February. The waiting period had initially been waived during the pandemic, allowing people to file a claim immediately after losing their jobs.
Work search requirements were also put back into place in late May, requiring everyone in the state filing for unemployment to complete four searches a week. The requirement went back into place early, after a vote by state lawmakers.
Work searches include submitting resumes and applications for jobs, registering with a placement facility or temporary help agency or headhunter, meeting with a career counselor, posting a resume on an employment website or interviewing for a job. Everyone filing for unemployment must keep records of their searches and could be asked to provide proof to continue receiving payments.
Since then, lawmakers have also attempted to pass legislation discontinuing federal unemployment programs, saying that it’s an essential step to getting Wisconsinites back into jobs after the pandemic.
Evers vetoed the bill and said he didn’t trust the argument lawmakers made because labor force participation has returned to nearly pre-pandemic levels with the benefits still in place.
Wisconsin’s unemployment rate in June was 3.9%, close to the 3.5% the state had in February 2020 before the pandemic hit. In that month, the state’s labor force participation rate was 66.9% and in June of this year, it was 66.3%, according to the DWD.
Republican legislators called an extraordinary session on July 27, in a final attempt to end the federal benefits for Wisconsinites, but failed with a vote of 59 to 37. Republicans needed two-thirds of members present to support the override in order for it to be successful.
The federal benefits, which were funded by the American Rescue Plan Act, are scheduled to end on Sept. 6 nationwide.