Job less are stuck in backlog nightmare as benefits expire
For millions of Americans, the Labor Day weekend brings the end of federally funded emergency unemployment benefits and a lurch into the uncertain economic recovery.
Then there are those stranded in a bureaucratic nightmare, still waiting for benefits they are owed.
Laura Ulrich, 59, was laid off in January from her job managing the distribution of coins in the Baltimore area for an armored car company. She spent the past week hoping that a summer of contacting officials in Maryland was going to bear fruit and more than $14,000 in unemployment insurance would finally land.
“It’s becoming so frustrating. It’s wearing on me. It’s wearing on my blood pressure. I can just feel it,” Ulrich said.
On Saturday, after Bloomberg News raised her case with the office of Maryland Gov. Larry Hogan, $11,200 finally landed in her bank account.
Ulrich’s happy moment came after months of frustrating encounters with a vital but occasionally cruel pillar of the economic safety net, experiences shared by many of the 8.4 million Americans who remained unemployed in August. Their ordeal highlights how the debate over whether supplemental benefits have kept people home and held back the job-market recovery often misses just how difficult securing aid in the first place can be for applicants.
According to U.S. Treasury data, the government has spent more than $830 billion on unemployment insurance from the onset of the COVID-19 crisis through Sept. 1.
State agencies that handle these payments have long suffered from antiquated systems and a chronic lack of staffing. The pandemic made it worse with the massive influx of people who lost their jobs and a wave of alleged fraud that led states to freeze numerous claims — including Ulrich’s — pending review.
In the year to June 30, according to Department of Labor data, 58% of claims nationally resulted in a first payment within the 21 days required.
Not much has changed since June. “I’m not seeing a lot of states meeting that benchmark yet,” said Michele Evermore, a senior policy adviser at the labor department.
Maryland has paid out 41% of claims within 21 days over the past year, according to federal data. Frustration over delays led activists to sue the state.
The Unemployed Workers Union, the group leading the lawsuit, has collected more than 5,000 complaints from people caught in the backlog, according to Sharon Black, one of the organizers. A spokesman for Hogan, Michael Ricci, said 20,795 unemployment claims were still “pending” as of this week. He blamed delays on the state’s strict procedures to verify applications.
To Evermore, who before joining the Biden administration worked as an advocate for reform of the unemployment system, cases like Ulrich’s illustrate the need for a long-delayed makeover of unemployment insurance, or UI.
“To really fix things we need comprehensive UI reform and 10 years of effort,” Evermore said.
The administration has labeled it a priority, but its prospects remain unclear. Many Democrats would like to enshrine expanded benefits for all workers. Republicans are opposed.
One problem hanging over the debate has been what state and federal officials say has been a huge amount of fraud in the unemployment system — although firm data on that is hard to come by. Senior Republicans in Congress have asked the Government Accountability Office to come up with a definitive reckoning of the fraud by the end of 2021.
Because of the fraud concerns, states are now re-examining unemployment claims approved early in the pandemic and reversing decisions. They are also sending out bills for “overpayments” to an untold number of beneficiaries, discussions of which have consumed social media groups for unemployed workers in recent weeks.
The resulting self-perpetuating bureaucratic mess will take at least a year to clear nationally, said Andrew Stettner, a senior fellow at the think tank Century Foundation. The unemployment system remains akin to an assembly line “that just can’t handle the volume,” Stettner said. “If you put too many things on it, the whole thing breaks.”