[ Congress boosted unemployment benefits. Now the challenge lies
in getting them out to the unemployed, through underfunded state-level
programs.] [[link removed]]

THE JOURNEY OF THE JOBLESS   [[link removed]]

 

Kalena Thomhave
May 20, 2020
The American Prospect
[[link removed]]

*
[[link removed]]
*
[[link removed]]
*
* [[link removed]]

_ Congress boosted unemployment benefits. Now the challenge lies in
getting them out to the unemployed, through underfunded state-level
programs. _

A mural in New York, MARY ALTAFFER/AP PHOTO

 

Like millions of Americans, Rosie Sullivan’s introduction to the
consequences of the coronavirus pandemic began with a series of
shifting unknowns. The question “would she get laid off?” turned
into “_when _would she get laid off?” And after that, would she
be able to apply for unemployment insurance? Then, would she ever
receive the funds?

Before she lost her job, Sullivan was the assistant company manager
for the national touring production of STOMP, a theater show featuring
a small band of percussionists and dancers. The company was one of the
last theater tours still operating in mid-March. The group got off
their plane in Baltimore to travel for a show on the night of March 14
and found out it was canceled while they were still in the airport.

Then, everything was canceled.

Sullivan lives in New York City, but after the tour’s cancellation
she flew home to Michigan to stay with her parents. From her
parents’ home, she applied for benefits through New York’s
unemployment insurance (UI) program.

Waking up bright and early a few days after losing her job because she
wanted to “just get it done,” Sullivan logged in to New York’s
UI website and began filling out the application. After a few minutes
on the page, the system forced her out, showing a notification that
the application had timed out.

OK, she thought. She just needed to be quicker. She wrote down all of
her information so that she could quickly input it into the system.
That didn’t work. She was getting kicked off the website after less
than two minutes on a page.

The system wasn’t timing out, it was crashing, as a slew of laid-off
workers, all with similar ideas to wake up early before the surge,
tried to apply for benefits to keep themselves afloat.

As April ended, 30 million Americans
[[link removed]] have
applied for UI since the coronavirus started shutting down cities and
states in mid-March. The pandemic has not unfolded gradually like the
Great Recession. In a matter of weeks, the unemployment rate has
spiked like never before, as the need for social distancing spread,
and the need for restaurant workers, landscapers, app developers,
entertainers, dental hygienists, and myriad others collapsed.

Without stable sources of income, Americans turned to the program that
they’re supposed to rely upon during times of crisis: unemployment
insurance.

Sullivan’s frustrating experience on her home computer has likely
been multiplied tens of thousands—maybe millions—of times. Across
the country, state UI websites have crashed, and call lines have been
inundated. Many jobless workers continue to try to access benefits.
And those who get their claims in don’t necessarily get paid:
Department of Labor data for March show that just 1.6 million new
claimants received payments, out of 11.7 million initial claims.
Other surveys
[[link removed]] and
analyses reveal similar numbers.

As millions more layoffs pile up, the crisis has pushed long-standing
issues with state UI programs into the spotlight: their systemic
makeups, the cuts that some state programs have suffered over the past
decade, as well as the way the federal UI program itself is built.
State systems are historically underfunded and wildly variant—access
can depend on what state you happen to find yourself in. The
experience of the Great Recession should have, but did not, trigger a
reassessment of whether state UI systems needed wide-scale support to
upgrade, or maybe federalization to ensure rapid response across the
entire unemployed population. Now, millions have been left stranded
and frustrated, amid the greatest flood of unemployment claims in U.S.
history.

AFTER DAYS OF TRYING to get into the online system, Sullivan tried to
call the New York Department of Labor. But she was greeted with an
automated directive to try at a different time due to the high call
volume—and then an automatic hang-up.

Running out of options, she took to Twitter. Sullivan tweeted at the
New York Labor Department. But what was most helpful were other
claimants’ responses. One person gave her advice to call the phone
lines incessantly. Even though the calls would abruptly end, the
claimant said, eventually you get put on hold.

So Sullivan gave it a shot, and after about two dozen tries, she got
hold music and eventually a live person. Because she already had all
the information compiled after so many other unsuccessful attempts, in
a matter of minutes, she finally submitted her claim.

Sullivan’s experience, though frustrating, is not necessarily the
norm. She was able to get through, and she did so after dozens of
phone calls, not hundreds. She applied in the early stages of the
unemployment crisis; so while she encountered an overload, the surge
in layoffs hadn’t even been reported yet. The wave of unemployed
workers now must contend with a system built for a very different
time.

Created in 1935
[[link removed]] in
the wake of the Great Depression, UI is a federal-state partnership
[[link removed]].
States levy taxes on employers, and these taxes make up the state’s
trust fund. The more UI claims levied against them, the more employers
pay in taxes (though states aren’t counting COVID-19 layoffs against
employers). While employees don’t directly pay into the program,
economists generally believe that employers pass some of these costs
on to their workers.

The trust fund pays out benefits to jobless workers, typically 50
percent of their wages but sometimes more or less depending on the
state. Workers must have lost their job through no fault of their own
(meaning workers who’ve been fired or who quit their jobs aren’t
eligible) and must be actively looking for work. The federal
government also taxes employers in order to fund the administrative
costs of the program (though this funding has eroded
[[link removed]],
being based on the previous year’s unemployment rate—last year, we
had record-low unemployment), as well as shore up federal benefits
when state benefits run out.

Since the New Deal era, little of the basic structure of UI has
changed. Yet 85 years ago, the labor market was quite different from
what it’s like today. Most recognized workers—generally white
men—worked at a single employer for their entire lives. Today, the
agricultural and manufacturing-based economy has transformed into a
service-based economy characterized by low-wage and often unstable
employment. Women are a major part of the labor force, and have been
for decades. Wages have stagnated over the past decades, meaning UI
benefits have stagnated too if they’re 50 percent of a worker’s
wage.

In many states, part-time workers looking for part-time work aren’t
eligible for UI. As gig work expands, more workers are classified as
independent contractors, populations who aren’t generally eligible
for UI. Seasonal workers, and workers in the low-wage labor market,
characterized by volatile schedules and frequent job change, may face
challenges meeting eligibility rules
[[link removed]] that
require workers to have been on the job for a certain amount of time
or to have made a certain amount of money. In addition, many states
have further tightened UI eligibility, cut benefit levels, and reduced
the maximum duration workers can receive benefits.

In March, before the pandemic really started to take its toll,
just 29 percent
[[link removed]] of
unemployed workers nationally received unemployment benefits, and in
some states, that number is as low as 10 percent. “That’s a system
that’s barely functioning. The rules are too restrictive,” says
Michael Leachman, senior director of state fiscal research at the
Center on Budget and Policy Priorities. With the passage of the
Families First Coronavirus Response Act and the Coronavirus Aid,
Relief, and Economic Security (CARES) Act, the federal government has
tried to shore up the traditional UI system. Congress
is incentivizing
[[link removed]] states
to waive some onerous requirements, such as the one-week waiting
period before benefits can be issued, job search requirements, and
counting layoffs against an employer’s UI tax rate. They’ve
created new programs
[[link removed]],
giving unemployed workers an additional $600 each week until July 31
(an unprecedented increase that will give all workers previously
making up to around $75,000 per year a full replacement rate on their
salary), and extending UI benefits by 13 weeks. The government has
also released administrative funding to states to improve their
infrastructures and hire more workers to deal with the onslaught of
claims.

Importantly, given the arcane rules of UI eligibility, the CARES Act
also created Pandemic Unemployment Assistance (PUA), specifically for
workers who are left out of traditional UI. Independent contractors,
self-employed workers, and workers with limited work history are
eligible for PUA if they are deemed ineligible for the regular state
UI.

The purpose of UI as an insurance program, whether traditional,
federally extended, or PUA, is not just insurance for the worker, but
also for the economy. During economic downturns, programs like UI and
the Supplemental Nutrition Assistance Program (SNAP, commonly called
food stamps) are meant to act as automatic stabilizers, covering more
people when it’s needed and contracting when times are better. In
this way, the funds paid out to workers stimulate the economy, because
they’re quickly spent [[link removed]].

The last time the UI program saw a major surge was during the Great
Recession. Between 2009 and 2013, Congress extended emergency
unemployment benefits multiple times, up to 99 weeks in many states.
When state UI trust funds ran out, states borrowed from the federal
government. UI stimulated demand
[[link removed]],
saving jobs and closing one-fifth of GDP shortfall during the
recession.

After the recession, states should have learned that they couldn’t
disinvest in their UI programs in good times—they had to shore up
their trust funds in order to prepare for the next crisis. But not all
states took those lessons to heart. Just 30 states
[[link removed]], Puerto Rico, and the
District of Columbia were solvent at the beginning of the year,
meaning there were enough funds in the state trust fund to pay out
benefits for a year in a crisis. And this crisis will be much bigger
than the last.

Expand

[MJ20-Thomhave2.jpg]

Congress expanded eligibility for jobless benefits in the CARES
Act.  JULIA WEEKS/APSTK VIA AP PHOTO

PART OF THE REASON FOR the systemic overload is that states have been
relying on decades-old mainframe computing systems. A 2010 survey
[[link removed]] of
states by the National Association of State Workforce Agencies found
that more than 90 percent of states used these legacy systems, and
only one state had modernized both their benefits system and payroll
tax collection system.

But that was 2010. A year earlier, as part of the federal stimulus
package responding to the last economic crash, the federal
government made funding available
[[link removed]] to
states to update their systems, provided that they altered program
requirements to ensure more workers received UI benefits. So did
states modernize after the Great Recession, and after the federal
government aimed to incentivize modernization?

Many states started, though only 16
[[link removed]] have completely modernized
their systems. And even so, most have still been overwhelmed by the
surge of applications.

In 2017, a Department of Labor letter to states
[[link removed]] regarding
supplemental funding opportunities read: “UI programs in many states
operate using … obsolete systems [that] had difficulty ramping up to
process recession-level workloads and modifying their systems to
accommodate required programs changes … These difficulties delayed
payments to eligible unemployed workers and frustrated potential
beneficiaries.” The letter also recognizes “a scarcity of
technical personnel with knowledge of older hardware and software
languages.” As has been widely reported and mocked, part of the
issue lies in a coding language called COBOL—“common
business-oriented language.” Many state UI systems are programmed
with COBOL, developed in 1959. COBOL is generally used on mainframes,
which are large physical computers located on-site in a business
office, in contrast with the off-site cloud computing infrastructure
used commonly today. But beyond government, COBOL remains in use for a
large proportion of the world’s major banks, insurance companies,
airlines, and other private industries that consistently rely on
mainframes. Indeed, 71 percent
[[link removed]] of
Fortune 500 companies use mainframes, specifically IBM mainframes, on
which COBOL is often used.

COBOL was considered to be a dying language even decades ago. Most
universities and coding programs no longer teach it. And so when COBOL
turns into “spaghetti code”—meaning source code that’s too
convoluted to understand or maintain—there’s often no one around
to fix it. COBOL programmers are literally dying out; the New Jersey
governor pleaded
[[link removed]] during
a televised press conference in early April for COBOL programmers to
volunteer to help the state. In response to sudden needs, IBM
(developer of the most commonly used mainframes) recently launched
[[link removed]] a
training initiative to teach COBOL.

Why did everyone stick with COBOL? The systems work well enough when
relatively few jobless workers rely on them. So they’ve rarely been
improved and haven’t been optimized to scale. Change is risky for
inherently conservative institutions like the banking system, and
modernization is expensive. The latter is particularly important for
state UI agencies.

The federal stimulus grants for UI modernization, which totaled $4.4
billion across 39 states, were extremely limited. Most states
have balanced-budget requirements
[[link removed]],
and they can’t go into debt funding their own system modernization.
In 2016—the last year grantees were announced by the Department of
Labor—most states received less than $500,000
[[link removed]] in funds.

Andrew Stettner, a senior fellow at the Century Foundation
specializing in unemployment insurance, points out that for Medicaid
[[link removed]] and
SNAP, the federal government paid 90 percent reimbursement over seven
years for states to redesign their systems. “Nothing ever happened
like that at [the Department of] Labor,” he says. The grants the
federal government did provide for UI modernization “[weren’t] any
kind of real, sustained investment. States really had to raise their
own money to do these IT modernization processes … [with] no federal
matching for [them].”

Some states have been planning to migrate their systems away from
mainframes for years, and yet were still caught unawares by the crush
of applications due to the pandemic. New York, where Sullivan applied
for benefits, recently announced
[[link removed]] a
partnership with Google, Verizon, and management consulting firm
Deloitte to update its application portal. Prior to that, it was
asking claimants to find a fax machine
[[link removed]] to
submit pay stubs to the UI office.

Yet inadequate systems make more than just application processes
difficult. A number of quirks exacerbate the challenges of receiving
benefits. In an effort to ease the burden on workers needing to
recertify their claims, in Georgia a claimant’s _employer _must do
so
[[link removed]] every
week—transferring that burden to someone with much less stake in
whether a worker gets their benefits. Claimants in Georgia have been
missing weeks of benefits when their employers forget or don’t
realize what they’re supposed to do. In other states, when a UI
claimant forgets their personal identification number (PIN), they
can’t simply reset it online—they must successfully speak to a
worker on the phone or even wait for it to be mailed to them.

In Sullivan’s case, she was successful submitting her claim and
getting approved for UI, but the worker she spoke with said she had to
enroll in direct deposit online. She tried to, but the change would
not process. She could only call the phone lines again and again,
helplessly, as the state sent her benefits to her New York address on
a prepaid debit card issued by KeyBank. Calling KeyBank’s help lines
was also unsuccessful.

She eventually was able to change her direct deposit information, but
$900 in UI benefits was still sitting on that KeyBank card in the
mailbox of her apartment building in New York.

Luckily, Sullivan’s boyfriend went to her place and was able to
access her mailbox—Sullivan’s roommate had mailed him a key. He
then mailed Sullivan her debit card.

What if she didn’t have a friend in New York to get her mail for
her? What if she wasn’t staying rent-free with her parents? What if
she desperately needed that $900 to survive?

What are happy hypotheticals for Sullivan are very real questions for
others.

OVER THE PAST DECADES, states have diverged in their approach to UI,
as some have altered policies in order to please employers over
workers. Back during the Great Recession, the majority of states
exhausted their trust funds and had to borrow from the federal
government. As the country recovered, states needed to pay those loans
back; after a short grace period, federal UI taxes on employers would
increase to make up the gap. More conservative states instead covered
the costs by slashing benefits and benefit duration to pay down the
debt.

Modernization does not necessarily equal UI benefits in a jobless
worker’s pocket. Florida’s Reemployment Assistance program—the
state’s name for UI—was modernized in 2013
[[link removed]] and
specifically designed to keep benefit access low, according to
a Politico report
[[link removed]].
The new system, designed by Deloitte, was riddled with glitches and
errors even when it debuted seven years ago. (Deloitte delivered
[[link removed]] a
similarly error-prone UI system to Massachusetts that same year.)

A Florida audit report from 2019 also documented
[[link removed]] known errors in
the system.

Melissa Whitworth of Orlando, Florida, was working as an actress
before the pandemic hit and has been struggling to apply for
Reemployment Assistance for a month. Seeking to avoid an overloaded
system, Whitworth tried filing her claim on the website well after
midnight.

Still, she was hit with error message after error message, which
Whitworth reads to me because she saved screenshots, in case there’s
something like a class action lawsuit. She wasn’t successful, and
then the state took the site down
[[link removed]] for
a few days in order to process existing claims.

In early April, Florida hastily unveiled a new, simplified
website—essentially an electronic form—where users give basic
information, and then state workers themselves input
[[link removed]] that
information into the original website. Whitworth was successful in
completing that form but is still waiting to hear from the state what
else she needs to do.

In her circle of friends, the majority of whom are out of work, she
doesn’t know anyone who has succeeded in filing a claim and getting
benefits paid out. Indeed, according to reporting
[[link removed]] by
Orlando’s WESH 2 News, every state in the country had their trust
fund balance fall during the first two weeks in April—except for
Florida. In Florida, the trust fund actually _increased_, taking in
more from employers in taxes than it paid out to unemployed workers.

On April 24, the state announced that less than 22 percent of UI
claims
[[link removed]] had
been paid, out of 702,000 applicants. And that only reflects those
fortunate enough to get their claims into the system.

Even before the pandemic, Florida’s rules were so restrictive that,
on average, just one in every ten
[[link removed]] jobless
workers benefited from the program. “Here we are at a point where
our system couldn’t handle [UI] claims under normal circumstances,
much less the influx now,” says Cindy Huddleston, an attorney and
senior policy analyst at the Florida Policy Institute in Orlando. The
state has had to “suddenly go from zero to a hundred miles per hour
overnight.”

In addition to flexibilities to ease access to UI, the federal
government also loosened merit pay requirements for UI staff workers.
This means that states can more easily outsource essential functions;
instead of hiring more government staff in light of its abysmal 2
percent answer rate for workers calling the UI agency for assistance,
Florida recently spent millions
[[link removed]] on
contracts with private call centers. The name of Florida’s
program—Reemployment Assistance—offers a hint as to why the state
is facing so many problems: Conservative lawmakers want people working
more than they want people to have UI to meet their basic needs.
Unsurprisingly, Florida has one of the lowest average benefits in the
country at $252.87 per week
[[link removed]],
a mere 38 percent of average wages, and benefits are limited to just
12 weeks. Florida, too, has underinvested in its technology, forcing
claimants like Whitworth to struggle to apply amid frequent website
crashes. At one point, the state had to switch to paper applications,
creating the opportunity for uncomfortable coverage
[[link removed]] of
masked Floridians physically in line to get print applications during
a pandemic. (Note that before the pandemic, the state generally
didn’t allow paper applications for anyone.) Following in
Florida’s footsteps, last year the Alabama state legislature cut the
maximum number of weeks of assistance from the standard 26 weeks to as
few as 14, depending on the unemployment rate. The
legislation, partly influenced
[[link removed]] by
a desire to attract employers to the state, was heralded to save the
state trust fund $45 million per year. The bill passed during a time
of record-low unemployment
[[link removed]] for
the state. It went into effect in January.

The current crisis “shows the necessity of investing in adequate
state services and properly equipping our state departments when times
are good in order to prepare for situations like we’re seeing
now,” says Dev Wakeley, policy analyst at Alabama Arise, a state
policy advocacy group. It’s easy to cut UI when unemployment rates
are low and the idea of another recession is out of sight, out of
mind.

Arkansas, Georgia, Idaho, Kansas, Michigan, Missouri, North Carolina,
and South Carolina join
[[link removed]] Alabama
and Florida on the list of states that have recently cut the standard
benefit duration.

Much of the reasoning behind these moves is that unemployment benefits
encourage workers to stay home instead of returning to the workforce.
There is some small truth to this—the Federal Reserve Bank of San
Francisco found that UI recipients stayed jobless an extra 1.6 weeks
[[link removed]] compared
to non-beneficiaries—but even so, that’s not necessarily a bad
thing.

“Having access to UI allows people to find the jobs that are best
for them,” says David Cooper, senior economic analyst at the
Economic Policy Institute. “Giving people that cushion is a way to
strengthen workers’ bargaining power and keep them from taking more
permanent hits to their earnings.” In other words, UI allows people
to take the time they need to find a job that fully replaces their old
one, with high wages and good worker protections, instead of taking
the first low-paying job available.

Importantly, cutting benefits disproportionately hurts workers of
color. Black workers consistently have higher unemployment rates than
white workers, and the typical duration of an unemployment spell for
this group is longer, too. On average, black workers receive
unemployment for about 26 weeks
[[link removed]]—the
standard maximum duration for benefits. For white workers, it’s 20
weeks.

It’s not just inadequate benefit amounts and antiquated rules that
workers have to deal with, but also poor communication by the state
departments themselves. Combine a systemic overload with confusing
directions that are often completely inaccessible for people
who don’t speak English
[[link removed]], people with disabilities
[[link removed]],
or the 17 percent
[[link removed]] of
Americans who only access the internet on a mobile device
[[link removed]].
It’s difficult for people to apply for benefits if they don’t
understand the eligibility rules.

The People’s Parity Project, a national advocacy group led by law
students, scanned each state’s agency website in mid-March, during
the early days of the pandemic and its concomitant layoffs, and before
the federal government stepped in. The project found that many states
gave inaccurate information regarding UI benefits—even those states
with otherwise laudable UI programs. Massachusetts, which has one of
the highest average benefits in the country, claimed on its website
that workers who receive a 1099 tax form (for independent contractors)
are ineligible for traditional benefits. This isn’t true—some
workers are improperly (and illegally) classified as independent
contractors and are otherwise eligible for UI. Yet these workers would
have been discouraged from applying.

That language has since been removed from Massachusetts’s website.

Other states that had removed the one-week waiting period and the job
search requirement to ease UI eligibility didn’t always clarify the
new rules on their websites.

“Informing people of their rights is almost as important as the
rights themselves,” says Sejal Singh, the project’s national
policy director. “If [people] don’t know that they can apply for
unemployment insurance, they’re not going to apply, and they’re
not going to get access to this lifesaving benefit.”

Expand

[MJ20-Thomhave3.jpg]A
Workers protest the inadequate unemployment system in Orlando,
Florida.  ALEX MENENDEZ/AP PHOTO

MICHIGAN ALSO TIGHTENED UI after the Great Recession. The state,
which even before 2008 had the highest unemployment rate in the
country, was the first to cut the maximum weeks of UI, reducing 26
weeks to 20. The legislature also passed a law allowing wage
garnishment of UI overpayments and another that allowed claimants to
be booted off UI for failing or refusing a prospective employer’s
drug test. The legislature declined to update the maximum weekly
benefit or peg it to a certain percentage of median income. The
maximum benefit has been eroding over time, stuck at $362
[[link removed]] since 2002.

“Instead of making unemployment insurance more responsive to the
economic hardship in the state, the legislature made it more
punitive,” says Peter Ruark, senior policy analyst at the Michigan
League for Public Policy. Changes centered the employer over the
worker. For example, the Michigan UI agency has an “employer
ombudsman
[[link removed]]”
to serve employers in the state. There’s no equivalent
representation for workers.

Like Florida, Michigan modernized its program’s technology, and like
Florida, it was tilted away from UI users. Michigan’s new system,
replacing one that relied on COBOL, created an algorithm that
automatically flagged fraud, even going back years. It also
automatically garnished wages and seized tax refunds of workers
accused of fraud, some who had no idea they had been accused of UI
fraud because they had not logged in to their UI account for years.
The collected funds swelled the agency’s coffers, which was
sometimes used
[[link removed]] for
general state operations.

As with similar algorithms that automate weighty decisions about
people’s lives, the algorithm wasn’t always right. In fact, it was
inaccurate 93 percent
[[link removed]] of
the time, a percentage that went undiscovered until affected
people declared
[[link removed]] bankruptcy,
lost their homes, or even committed suicide.

“The system was and is a very modern system,” says Ruark.
“It’s not just about old systems versus new systems. It’s about
fair systems.” After several lawsuits, a switch to human
intervention for fraud cases, and a change in administration, the
Michigan agency seems to be turning itself around. As the pandemic has
spread, Michigan’s UI response has been one of the better ones in
the nation. Democratic Gov. Gretchen Whitmer, who replaced Republican
Rick Snyder in 2019, issued executive orders to restore the maximum
benefit duration to 26 weeks, waive job search requirements, and
expand eligibility, temporary changes that could only be made
permanent by the state legislature. The state was also one of the
first to begin issuing the extra $600 to weekly UI checks.

I spoke with three separate sources who specifically lauded the
Michigan UI agency director’s response to the pandemic. Indeed, the
new director, Steve Gray, used to be an advocate, heading up a
University of Michigan Law School team that provided legal assistance
to UI claimants affected by the false-fraud fiasco. With the new
flexibilities that have been put in place, the state was “looking
for areas in the law that are catching people that should be getting
paid, but because of the way the law was structured, they’re not,”
says Gray. It’s not easy for every jobless worker to file for UI in
Michigan—though there are success stories. Over the phone from
Ludington, Michigan, Diane Smith tells me she isn’t sure her story
is one that I’d be interested in hearing. “Fortunately for me, it
went really smoothly … it wasn’t everything I’m hearing about,
thankfully,” she says. Smith, a dental hygienist, was able to apply
for benefits in about 25 to 30 minutes. She applied on March 17, a
week before Michigan’s stay-at-home order was in place, so Smith may
have missed a wave of claimants in the system.

Smith’s husband is self-employed and not eligible for traditional
UI, so he’s applying for PUA benefits. How that works is the state
must determine that a claimant is ineligible for the regular UI
program before approving their application for PUA. Many states have
been slow to set up these systems—it’s an entirely new
program—though benefits are retroactive.

Smith’s story does not mean that all Michiganders are easily
applying for benefits. There are still consistent reports of backlogs
and delays even as the state is lauded for its response. But her story
is a reminder that some people—millions of people—have been
successful at accessing UI.

While we consider how millions of Americans are shut out of the UI
program, we should also consider that the program is operating as it
should be _to some extent_. Right now, the country needs a program
that will put money in the pockets of Americans. Sure, the UI program
needs improvements and needs to be modernized to support more workers.
But for millions of Americans, UI is getting them money they need.

ALTERING THE UI SYSTEM to better support workers should be a high
priority given the crisis, but it should also be a high priority in
order to prepare for the next crisis.

Improving the program is tricky because there is no consistent user
base that can advocate for the program. Think about Social Security
and Medicare, which have millions of seniors and public-interest
groups like AARP concerned about shoring up the programs and defending
them from possible cuts. UI’s base, by contrast, is wide-ranging and
constantly shifting. There can be no coordinated effort of recipients
agitating for the program because being on the program is temporary.
Most of the workforce is a potential recipient, but UI is of no
concern until the unthinkable happens. And the fact that UI doesn’t
support independent contractors and gig workers certainly doesn’t
help. The program is complex, and there just aren’t as many people
who are familiar with the murky details of UI like they are with more
popular public-assistance programs. For instance, one state policy
organization I reached out to for this story told me they had no one
on staff who could speak to how the state’s system works.

States should take up modernization efforts on their own—not just
technologically, but policy-wise as well. It’s not 1935, and the UI
program should reflect the realities of the current labor market.
Obviously, the gig economy is a huge part of that. And many people
rely on an array of ever-shifting low-wage and part-time work that
also doesn’t meet the traditional eligibility requirements for UI.
Sometimes, people may have to leave a job to take care of a sick
family member. (Welcome to 2020.)

The federal government can standardize UI and offer states incentives
to build better programs. The current crisis may be opening a window
to make improvements, particularly for independent contractors and gig
workers. “The pandemic [UI] programs [are] temporary, but hopefully
[will lead] to a more permanent fix to some of these exclusions,”
says Stettner with the Century Foundation. Or the government could
just federalize the program. The need for a functional UI program
nationwide is particularly important given its role as an automatic
stabilizer during crises. UI is currently a mosaic of vastly different
state programs, but the federal government could ensure that workers
receive the benefits they need by taking control
[[link removed]] of
the program and using the federal taxes already levied on employers to
finance it. UI, after all, was created alongside Social Security, a
federal program in which eligibility rules are the same for everyone.

The U.S. could also expand little-known provisions, like work sharing,
in which employers reduce salaries across the board instead of laying
people off, and the government steps in to pay the difference. This
benefits workers, of course, but it helps employers too because they
can keep their employees even during a crisis. It’s also less
expensive for the government than paying full UI benefits to each
worker. Work sharing is currently supporting workers in Germany:
Nearly half a million
[[link removed]] companies
are deploying the tool, affecting about 20 percent of the German
workforce. In the U.S., only 27 states and the District of Columbia
[[link removed]] have
work-sharing provisions on the books, and we can’t even be sure if
employers are well versed in what work sharing is and what it can do
for their businesses.

One has to wonder if many of these progressive policies or
federalization can be enacted without a groundswell of worker
advocacy. Right now, a significant portion of the population is
currently receiving UI benefits, and many more are eligible and trying
to access them. During the Great Depression, there was mass
organizing and militant protests
[[link removed]] by unemployed
workers. We didn’t see anything on that scale during the Great
Recession, but as we all know, these are unprecedented times, and the
scale of the crisis is perhaps bigger than we can now fathom.

“This is the point where workers get sick of waiting for their
benefit and just decide that unemployment insurance doesn’t work,”
says Michele Evermore, senior policy analyst at the National
Employment Law Project.

“Or,” she says, “they come together and demand something
better.”

_Kalena Thomhave is a Michigan-based freelance writer on poverty and
inequality, and a former Prospect writing fellow._

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