Increased Claims and Antiquated IT Systems Lead to Delays in Unemployment Benefits

In April of 2020, a month after the official start of the COVID-19 pandemic, unemployment skyrocketed to 14.8 percent, according to the U.S. Bureau of Labor Statistics — the highest it has been the last 20 years and nearly five percentage points higher than the worst unemployment rates during the 2008/2009 economic crisis. Taking into account for racial disparities and education levels, rates reached as high as 21 percent in some demographics. For individuals seeking unemployment benefits, including weekly monetary assistance, the slow and arduous process through states’ departments of labor has been fraught with bureaucratic lethargy. Many states have IT systems that date back to the Nixon era, resulting in unemployment benefit delays and frustration.

Wisconsin Democratic Gov. Tony Evers discussed such an antiquated system in his State of State address in January. According to the Wisconsin Department of Workforce Development, between the years 2016 and 2019, roughly 7.2 million unemployment claims were handled. In a little less than a year, from March 2020 to January 2021, more than 8.8 million claims have been filed; nearly a 1.6 million increase in claims in a quarter of the time. Due to the influx, state employees were reassigned from other agencies in order to process claims. Governor Evers called for a special session in his address in order to modernize the state’s unemployment system and address unemployment benefit delays, which was denied by Republican legislators.

Kansas Democratic Gov. Laura Kelly also addressed the IT difficulties in processing unemployment claims in her State of the State given on January 13. Similar to Wisconsin, Kansas processed more unemployment requests in the 10 months since the start of the pandemic than the eight years previously combined. In her proposed budget, $37.5 million would go towards updating and modernizing the old IT system.

Other governors, such as Michigan Democratic Gov. Gretchen Whitmer, introduced a COVID Recovery Plan that included a call to the legislature to permanently extend unemployment benefits from 20 weeks to 26 weeks.

While it may be too late for some individuals who haven’t seen unemployment payments in months, states are working towards solutions through legislative and regulatory avenues. While unemployment rates are decreasing and leveling to pre-COVID pandemic rates, it will be prudent for states to follow through with rapid changes in the event of future economic struggles.

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