An NBC News report by Ben Popken said on July 31, 2020:

“A $600 per week lifeline is about to run out of rope, threatening to leave millions of American families at the end of theirs.

“The pandemic unemployment assistance payments, which were approved in March as part of the government’s fiscal stimulus package, known as the CARES Act, are set to expire July 31. For administrative reasons, states have said the last payments will go out this weekend if the program is not extended. Lawmakers are currently debating whether to extend the benefit, with some arguing that the size of the payments eliminates the incentive to work. Others say the benefit has been an economic lifeline for millions who lost their jobs because of the pandemic.”

The report cites a single mother from rural Texas, Sarah, who asked for her last name to be withheld so her children are not embarrassed by others knowing they rely on government assistance.

Earlier this year, Sarah left her job in a densely packed call center when the employer and coworkers refused to follow standard guidelines from the Centers for Disease Control and Prevention on masks and social distancing.

“When it became evident that it would be ‘business as usual’ at the call center and many of the management team were convinced it was all a hoax or being exaggerated, I left,” Sarah told NBC News. Since then, one of her former colleagues has tested positive.

“As badly as I need to go back to work after the extra $600 stops, I won’t risk my family,” Sarah said.

Now she is struggling to put food on the table and make rent, and does not know how she will manage when the funds for the emergency federal program extra assistance runs out. The local food bank only gives out small bags of bakery items, not enough to feed four children ranging in age from elementary to high school.

This month the Texas Health and Human Services Commission revoked her SNAP food benefits after she made $3 above the income limit, because her ex-husband had suddenly paid back dated alimony.

When Sarah contacted the agency, she got conflicting advice and was told it could take over two months to resolve her issue. After being contacted by NBC News, an agency spokesperson said they reviewed her case and found she had exceeded federally established income limits for SNAP but they have now reached out to her to let her know she will be eligible again in August.

The government benefits programs have “failed the most vulnerable of us all, the working class American family,” Sarah said.

According to an analysis by The Century Foundation, an estimated 25 million Americans have benefited from the Federal Pandemic Unemployment Compensation. The program provides additional emergency income on top of an employee’s regular unemployment benefits, which states set at around 50 percent of a person’s previous income.

The program has been criticized for being overly generous to some workers for giving them more money than they made before the pandemic. But technical restrictions in the historically underfunded state unemployment infrastructure mandated a one-size-fits-all approach in order to deliver assistance as quickly and as widely as possible.

Many of the state’s antiquated unemployment systems, some programmed in the obsolete programming language of COBOL, could not handle fine-tuning payments based on a percentage replacement for lost wages, said Chad Stone, chief economist for the Center on Budget and Policy Priorities, a left-leaning research and advocacy institute.

That necessitated a flat rate that would work as income replacement to meet the needs for the greatest number of workers, and their ability to keep paying their bills and purchasing.

A compensation of $600 was designed to make up the difference between the $980 average weekly earnings of employees on private payrolls in March and the $380 average amount of weekly unemployment insurance benefits.

There is consensus in Washington that federal unemployment assistance needs to be continued, but there are differences over how it should be structured. With the U.S. Congress now on summer recess, it may be weeks before any payments resume, and state unemployment offices — especially those with the oldest systems — will still require time to reprogram their computers.

The need for continuation of the $600 was further highlighted on Thursday, after the Labor Department reported that more than 1.43 million workers filed new claims for state unemployment benefits last week. It is the second time in almost four months that weekly unemployment claims have risen, and marks the 19th-straight week that more than 1 million Americans have sought unemployment aid.

Tabitha Griffin, a single mother in Florida, had to shut down the cleaning business she owned when the pandemic hit. For now, she lives in a reduced-rate hotel room along with her 7-year-old daughter. If she cannot afford that, they will have to sleep in her car, she told NBC News.

She has applied for federal pandemic unemployment assistance benefits, but accidentally entered one of her bank account digits wrong. She fixed it and has pleaded with the Department of Economic Opportunity, the state unemployment agency, to reissue her pay, to no avail.

When her backpay comes through, she says she will have enough to find a long-term rental.

Her attempts to contact the agency went nowhere. After being contacted by NBC News, the Florida Department of Economic Opportunity said it would look into the matter. But days later, she still had not heard from the agency.

“To have a child and feel like you’re failing them is the worst thing I have ever felt,” Griffin said.

The situation is especially critical for some unemployed workers who have been relying on the federal assistance to cover their ongoing out-of-pocket medical expenses.

Amy Leyendecker is a 46-year-old with Type 1 diabetes living in New Mexico. She needs daily doses of insulin to avoid going into a life-threatening coma. In 2018, she lost a foot to amputation after trying to ration her insulin to stretch it out. With a note from her doctor, she went on unemployment in March from her part-time cashier job after her employers encouraged anyone to do so who did not feel safe working through the pandemic. Since then, the $600 per week has enabled her to cover her monthly medical costs.

“We don’t know how long this will go on, so I don’t know month to month if I will be able to afford to live. This month, I am good unlike many many others. Next month? I guess we will see,” Leyendecker said.

A ‘perfect storm’ for chaos: Unemployment system’s failures were a long time coming

Another media report from the U.S said:

Delays in unemployment benefits also indirectly affect other social services, such as Medicaid, creating what one expert called “a perfect storm.”

The May 13, 2020 NBC News report by Olivia Solon, tech investigations editor for NBC News in San Francisco, and April Glaser, reporter on the tech investigations team for NBC News in San Francisco, said:

In New Jersey, a 60-year-old programming language became the scapegoat for years of neglect after the state’s unemployment website struggled to handle the flood of unemployment claims spurred by coronavirus lockdowns.

In Florida, there have been extreme cuts over the last decade in the unemployment system. The state’s onerous process seems designed to deter applicants, including eliminating in-person or phone options to apply for unemployment insurance and funneling them through a badly designed and underfunded website. As a result, the state has struggled to handle the influx of claims.

In Ohio, the unemployment system hadn’t recovered since the Great Recession. Strained by almost a million new applicants over the last six weeks, phone lines have been clogged for hours, and the website has been crashing or timing out. Some applicants reported that they were rejected because they didn’t meet eligibility criteria that had been waived during the pandemic.

Similar situations are playing out in Michigan, California, New York and elsewhere across the country.

Newly laid-off workers have overwhelmed unemployment offices in numerous states, leading to frustration and delays in applying for and receiving benefits. Each state has its own story, but many share two themes: budgets cut by state legislatures and starved by the federal government, and old, inefficient systems that can often create more work for applicants and processors.

But the damage is not limited to unemployment offices.

Delays in unemployment benefits also indirectly affect other social services, such as Medicaid and cash and food assistance, as workers lose employer-provided health insurance and income.

“It’s the perfect storm,” said Leo Ribas, a partner at the Change and Innovation Agency, which has helped several states modernize these social services. “There are more families, overtaxed resources, a combination of bad processes and antiquated IT,” or information technology.

He described how the crisis has forced states to reconsider how they deliver services to comply with social distancing guidelines, which means having employees process cases online or on the phone.

“They are building the plane as they fly,” he said.

Unemployment insurance is a temporary benefit program to help people who are out of work for reasons beyond their control, like being laid off because of the economic downturn resulting from the pandemic.

To qualify, applicants usually have to show that they worked at their last job for a certain amount of time and that they are actively looking for work, although many states have waived certain eligibility requirements during the current crisis to help the millions of Americans suddenly thrown out of work. Normally, most states allow unemployment insurance for up to 26 weeks, but a recent relief package passed by Congress grants people 13 additional weeks.

While states have the biggest role, the underfunding behind ailing unemployment systems isn’t only a matter of state budgets. Although states administer unemployment benefits, funding comes almost entirely from the federal government, and one of the main sources of that funding is the federal unemployment tax.

The last time the figure was adjusted for inflation was in 1983.

“Unemployment insurance provides a striking illustration of how defunding the administrative capacity of the program itself has really limited the sort of response that both the federal government and the state can provide in this economic crisis,” said Alexander Hertel-Fernandez, a professor of public affairs at Columbia University who studies state political networks.

During a typical year, the if-it-ain’t-broke-don’t-fix-it approach most likely would not cause too much disruption in people’s receiving their benefits. However, the COVID-19 pandemic created a surge in demand for social services that has never been seen before as the number of first-time unemployment claims soared to 33 million.

Nicole Rodriguez, research director for New Jersey Policy Perspective, a nonprofit think tank, said the state’s unemployment system is just one area that has been allowed to deteriorate.

“Over the last decade, every single New Jersey department was cut to the bone, and it’s been hampering the state’s ability to provide ordinary services and run programs people expect during normal times,” Rodriguez said. “Now, in a crisis, we are seeing how bad those cuts were.”

Rodriguez’s organization has conducted research showing that although funding for the state’s labor department has remained stagnant since the Great Recession, it is operating with 25 percent fewer employees than it was in 2008.

The backlog in processing cases means the real unemployment rate could be much higher than has been reported.

According to a survey by the nonprofit Economic Policy Institute, for every 10 people who successfully filed for unemployment insurance benefits over four weeks in March and April, an additional three to four people tried and failed to submit claims.

The process for filing for unemployment benefits varies among states, but options include filing online, over the phone, via mail or in person (or a combination). There have been plenty of technology failures, including crashed websites and clogged telephone lines, but in many cases, the bottlenecks are caused by limits on the number of staff members trained to review cases.

But there’s a stark difference between states that have taken steps to modernize their systems — not just in technology but also in the processes that can cause bottlenecks — and those that haven’t.

Some states, including Texas, Nevada and Washington, modernized how they deliver Medicaid, cash and food assistance before the pandemic hit, but the programs are administered by different departments from the ones that handle insurance benefits. Still, thanks to recent upgrades, those states have been able to stay on top of their workloads, Ribas said.

They have been successful because they redesigned the human workflow rather than just upgrade the technology to avoid automating “a really bad process,” he said.

“You can put bots in place to answer your phone, but they are not going to tell you if you are eligible or not eligible for Medicaid,” Ribas said. “Agencies are trying to resolve the symptom, but in reality they need to focus on calculating benefit eligibility so that people don’t need to call back three, four, five times.”

Technology has emerged as something of a patsy for the broader problems of unemployment systems.

When an unprecedented surge in applications for unemployment benefits in early April crippled New Jersey’s ability to process claims, Gov. Phil Murphy blamed an ancient and clunky mainframe computer system and asked for help from any software developers familiar with a six-decade-old programming language called COBOL.

Murphy’s comments triggered a flurry of media reports decrying the absurdity of a state’s using such old technology. Hundreds of COBOL programmers came forward to offer their services.

COBOL, it turned out, did just fine. Weeks after Murphy’s statements, NBC News could find no evidence of any COBOL volunteers being deployed to help New Jersey shore up its IT systems. A spokeswoman for the state labor department said the call for COBOL programmers was issued “metaphorically” to highlight the age of some of the systems.

Overall, the systems have performed “very well” apart from two outages in mid-March and one on Sunday, the spokeswoman said, and they seem to have been caused by capacity problems with the public-facing websites, as 930,000 residents — 1 in 5 workers — filed claims in the last six weeks.

COBOL may have been a victim of its own success, said Mar Hicks, a technology historian at the Illinois Institute of Technology.

“For many years, these systems were stable enough to trundle along with little or no maintenance. So the people who maintained them were fired or laid off,” Hicks said. “It’s a labor problem.”

Now isn’t the time to be making radical changes to legacy systems, said Todd Schroeder, Google’s director of global public-sector digital strategy.

“I don’t think that’s in anyone’s best interest, because that’s just going to require more time and effort, and isn’t necessarily going to get us to serving this new population of folks that are eligible for these benefits quickly,” he said.

States that have not invested in the digital infrastructure that supports critical government functions should be looking at what is happening in the unemployment insurance system as a “North Star,” he said. Google is working with New York, Georgia, North Carolina and Illinois to ensure that state unemployment websites are not paralyzed by the spike in demand.

“If we don’t bolster the critical unemployment need, there will be other critical functions that span from that,” Schroeder said.

Hicks warned that the finger-pointing at specific technologies or programming languages is being stoked by a range of interested parties, including the consulting firms that stand to benefit from lucrative digital transformation contracts, as well as those that make money by maintaining the status quo.

“There’s a great tradition in American society of profiting off a crisis, and we’ve been seeing an awful lot of that,” Hicks said in reference to the technology companies that are pitching their services as a panacea. “They would be remiss if they didn’t try to take advantage of this opportunity by saying, ‘We have the right answer, and trust us to fix these systems.'”


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