As a direct response to coronavirus pandemic public health protection mandates, an estimated 30 million jobs were lost as of early May. The crisis led to an unprecedented surge of unemployment claims being filed across all 50 states.
The problem is only growing worse as news outlets such as the Wall Street Journal and Business Insider report that states are experiencing system crashes, processing delays, and financial pressure to reopen the economy too prematurely or risk running unemployment trust funds dry. The recently unemployed are frustrated and rightly so.
The Wall Street Journal reports that delayed technology adoption is partly to blame for a delay in jobless benefit access.
Michele Evermore, senior policy analyst for the National Employment Law Project, says that only 16 states have moved from their antiquated 1970s COBAL business computer programming, just four states have upgraded their benefits software systems, and a mere three states have upgraded their tax systems to work at a capacity that could handle the sudden influx.
Experience in disaster-based assistance response is also a capacity limitation. Some states experience natural disasters that impact local businesses on an annual basis, so they have experience updating their systems. But some states don’t.
Arizona, for example, hasn’t needed to deploy a disaster response plan since 1983. And then there is the financial pressure of such historic demand.
“Massachusetts … entered the current recession with just under five months of reserves. Skyrocketing claims, combined with the nation's most generous benefits, have eaten away those reserves … [t]he state's fund will [run out] within six months,” Pro Publica estimates.
Many other states are facing a similar insolvency blow and will need to seek additional federal loans. Despite these concerns over the depletion of state unemployment insurance benefits, there is mercy to be found.
Some states that had originally cut back the length of time that claimants could stay on the rolls to just 12 weeks are returning to a 26-week limit. Meanwhile, CNN confirmed that “the federal government is footing the bill for the temporary $600 boost in weekly payments and short-term expansion of benefits to those affected by the coronavirus and the self-employed.”
Black people as a demographic are particularly vulnerable in times of economic crisis. Those among the millions of people experiencing sudden loss of income, are vulnerable to contracting and dying from the contagion, and/or are considered essential workers reporting to the frontlines are acutely invested in how likely states are to remove stay-at-home orders.
Such a move could be more detrimental to the public than a drain on unemployment trusts would be to exhausted state coffers.