An analysis from Bloomberg News found that nearly one-third of new unemployment benefits that were estimated to be paid out to those who lost their jobs during the coronavirus have yet to be disbursed.
Nearly 1.9 million Americans filed for unemployment insurance last week, but if the past two months are any indication, some of them might be stuck waiting for weeks or months to receive their benefits.
Since the coronavirus crisis upended the nation in March, millions of newly jobless Americans are still waiting for their unemployment benefits, due to the historic rush of applications and unprecedented backlogs in state unemployment systems.
Roughly 42 million Americans have filed for unemployment benefits since March, when the coronavirus pandemic shuttered thousands of businesses, leading to layoffs. Congress passed a $600-a-week supplement to state unemployment benefits to help jobless Americans, but the almost-overnight collapse of the American economy overwhelmed state unemployment processing systems, which experts say were outdated and have long been underfunded.
In fact, at least a dozen state unemployment systems still rely on COBOL, an Eisenhower-era computer code, in some capacity, according to The Verge. The reliance on 60-plus-year-old technology isn’t the only issue. Many state unemployment offices remain understaffed, others have been victims of cyber fraud, and many applicants found it extraordinarily difficult to apply in the first place.
“There are states that have actively been trying to improve their systems but for some reasons workers are having more trouble accessing benefits than they had historically,” Michele Evermore, senior policy analyst at the nonprofit National Employment Law Project, told The Hill.
Perhaps no state has had more issues than Florida, where former Gov. Rick Scott intentionally designed the state’s online unemployment system to make it difficult for people to access, the Washington Post reported. The Tampa Bay Times interviewed dozens of Floridians who applied for unemployment, struggled to get their benefits, and in some cases, still haven’t received them more than two months later.
The consequences of these delays have been devastating, as many Americans are struggling to pay their bills and risk racking up debt, and in some cases, falling into homelessness. Shanicka Dormevil, a 34-year-old former insurance agent in Orlando, Florida, told the Tampa Bay Times she’s owed $6,125 by the state. Before the COVID-19 pandemic, she was saving for a house, but that plan is now out the window. “This set me back like years,” Dormevil said. “I will probably never get back to where I was.” The state system shows that she’s active and eligible for benefits, she said, but she’s yet to receive any.
Dormevil is one of millions of Americans who are owed money by their states. An analysis from Bloomberg News found that nearly one-third of new unemployment benefits that were estimated to be paid out to those who lost their jobs during the coronavirus have yet to be disbursed.
The federal government hoped that its small business relief program—which provided loans to small businesses that could be forgiven if used to cover payroll—might stem the loss of jobs, but the Paycheck Protection Program has come under criticism for its complicated and ever-evolving rules, and many business owners have opted not to use the funds on payroll. President Trump is expected to sign a bill into law that makes forgiveness easier to attain, but it may be too little too late to stem the nation’s unemployment crisis.
Complicating matters further is that the $600-a-week expansion is set to expire at the end of July, and Republicans in Congress have said they will refuse to authorize an extension that provides Americans continued relief. Republicans have said they are eager to get people back to work, even as the number COVID-19 cases and deaths continue to rise, and the economy shows few signs of a quick recovery.
Senate Majority Leader Mitch McConnell and others have indicated they’re in no rush to pass further relief legislation and may wait until July to pass another bill, despite efforts from Democrats to provide further help to the millions of unemployed.
At the state level, some leaders have begun taking action to address the backlog of claims.
Oregon Gov. Kate Brown, for example, dismissed the director of the Oregon Employment Department on Sunday, amid revelations that the state still had a backlog of 200,000 unpaid jobless claims on file and no idea how much money it actually owed or to whom.
“In the middle of this pandemic, the continued delays from the Oregon Employment Department in delivering unemployment insurance benefits to thousands of out-of-work Oregonians are unacceptable,” Brown said in a statement. “This is an unprecedented crisis, and the problems at the department demand an urgent response.”
While some states are plagued by more severe issues than others, Evermore, the policy analyst, told The Hill that problems have occurred across all 50 states, and said the “patchwork” response from state to state was so uneven that it might be time to federalize the program entirely.
In the short term, she said states need to provide unemployment systems with significantly more funding to help handle the massive number of claims.