1.2 Million Unemployed Still Waiting for Benefits: Analysis

1.2 Million Unemployed Still Waiting for Benefits: Analysis

Millions of unemployed Americans will start receiving an additional $300 per week in jobless benefits, thanks to the $900 billion coronavirus relief bill signed into law on December 28. But about 1.2 million unemployed workers will be left out in the cold, according to an analysis by The Washington Post, because their applications for benefits are still hung up at their state unemployment offices – and, in many cases, have been for months.

According to the Post, about 703,000 applications for unemployment aid are currently in appeals at the state level, and another 529,000 people are simply waiting for states to make decisions on their initial applications for benefits. Some of the applications date back to last March, when the Covid-19 pandemic was beginning to shut down the economy.  

The holdups have various causes, including efforts to cut down on fraud, but share a common theme of understaffed and underequipped state unemployment offices. “We are still dealing with twice the normal number of claims even today, nine months into the pandemic, while simultaneously continuing to plow through the record onslaught of claims that came in the door from March to June,” a spokesperson at the Ohio Department of Job and Family Services told the Post.

A system with a lot of cracks: The benefits system for workers who lose their jobs struggles to function properly even under the best of circumstances, and the pandemic has pushed it to the breaking point. Few states can handle the sheer number of applications they have received, and many state systems are running on poorly designed or outdated software.

On top of that, Congress created new unemployment programs and new rules in response to the pandemic – a welcome development for those who received benefits, but another challenge for already overburdened unemployment offices. According to the Post, the majority of people waiting to receive their benefits have applied for Pandemic Unemployment Assistance, a temporary federal program that is designed to help the self-employed, gig workers and parents who cannot work because their children’s schools are closed. Some state officials reported that uncertainty about eligibility for the new program was contributing to the delays.

No additional help for states: An early version of the Covid relief package included $1 billion for states to use to update their unemployment systems, but those funds didn’t make it to the final bill, leaving states to struggle with massive caseloads and sometimes unclear regulations on their own.

“It’s crazy our computer systems couldn’t be programmed to do the right thing,” Glenn Hubbard, former chief economist for George W. Bush, told the Post. “Something will happen again some day and we shouldn’t be in this position.”