Skip to main content
Tags: jobless | benefits | millions | waiting

Millions of Unemployed Still Waiting for Jobless Benefits

Millions of Unemployed Still Waiting for Jobless Benefits
(Ilnaz Bagautdinov/Dreamstime)

Friday, 15 May 2020 06:40 PM EDT

Millions of Americans who are owed tens of billions of dollars in unemployment benefits are still waiting to receive the help they have been promised two months after the Covid-19 pandemic unleashed a historic wave of layoffs.

Even as job losses continue to mount, states that have ramped up staffing and deployed new computer systems are struggling to handle a surge that has seen 36.5 million people -- about one in five American workers -- file for unemployment since mid-March.

The result is that a key element of the U.S.’s unprecedented fiscal response is running into problems that highlight the difficulty of getting money to people who need it to weather the crisis. The delayed payments also help explain why frustration is growing with state lockdowns and clashing with fresh warnings from public health officials that a pandemic that has claimed more than 85,000 lives in the U.S. remains a major risk.

Bloomberg News contacted all 50 states this week and less than half provided figures on how many people had been paid the benefits they were owed. But in those states alone at least 5 million initial claims filed were yet to be paid. The gap between the initial claims reported March 15 to May 2 and continuing claims is now more than 10 million people.

Economists typically use continuing claims to calculate the number of people actually receiving benefits because the U.S. system normally only pays people after they have made the first weekly certification that they are still without work.

Breaking Points

“For basically six weeks I’ve received nothing,” says Scott Ross, who spent seven years working 60-hour weeks as a restaurant manager in Eldersburg, Maryland. He was let go at the end of March as a result of the state lockdown imposed by Governor Larry Hogan.

The exact number of people waiting nationally for their unemployment benefits is virtually impossible to nail down, partly because of the sheer volume of claims still pouring into overloaded systems. The data are also imperfect: Many states like New York decline to share exactly how many claims have been paid, or lodged but dubbed pending. Some track “unique” initial claims, or a figure that removes duplicates, others don’t.

The story Ross tells is echoing across the country, one that’s stretching many Americans to their breaking points even after Congress approved more than $2 trillion in rescue programs.

It took him six hours to lodge his first claim April 1 and after he received a confirmation letter outlining the $1,000 per week he was due in unemployment benefits, thanks to the extra $600 a week kicked in by the federal government, he thought himself lucky.

Except, despite being confronted with a page “full of green checks” when he logs into the state unemployment system -- indicating everything is fine with his account -- he has yet to receive a dime of the almost $7,000 he now thinks he is owed. And he’s about to fall behind on his mortgage.

U.S. Treasury data also points to a vast gap between the benefits owed and those paid, as well as a scramble to catch up with a mounting backlog of payments.

In April, the Treasury, which funds the payments made by states, paid out an unprecedented $48 billion in unemployment insurance, according to its own data. Economists at the Brookings Institution, however, calculated that, based on the number of claims filed in April, the bill owed that month alone was at least $80 billion and mounting coming into May.

The Treasury and states also had to make up for a lag in payments in March. A separate analysis by economists at the Century Foundation, a nonpartisan think-tank, found that just 14.2% of the 12 million new workers who filed for unemployment in the month received benefits.

Systems in Disrepair

Andrew Stettner, a senior fellow at the Century Foundation, said his estimate based on the data available is that just 60% of the 36.5 million people who have filed initial claims since March 15 have been paid the benefits they are owed. It’s a sign that the money is being funneled out much slower than usual via a system that was in disrepair before the crisis hit.

“We have to be honest,” Stettner said. “Even the strongest advocates of this program have to understand it has not been successful. It hasn’t been able to deliver what it needs to despite the heroic efforts of a lot of individual workers and state agencies.”

The payments have accelerated in May. But according to Jay Shambaugh, director of the Hamilton Project at Brookings, the tens of billions of dollars in back benefits that are still owed to people speaks to what remains a huge need in an economy roiled by the health crisis and lockdowns. The effectiveness of the fiscal response rolled out in the past six weeks remains hard to judge, he said.

The federal government has deployed “a huge amount of money,” Shambaugh said. And yet “we can’t say yet how much of the gap it is filling.”

The shortcomings in the nation’s unemployment-insurance system aren’t just exacerbating consumers’ cash shortages. The longer people go without enough income, the deeper they sink into debt, leaving them in financial ruts that can take years to dig out of.

States insist they are doing everything they can in the face of an unprecedented situation. But in some, more than half of applicants are still waiting for their money.

California, Texas

California reported 4.1 million claims for unemployment from March 8 to May 2 and made payments to 3.3 million, according to data on its website.

In Texas, nearly 600,000 of the 2 million unique claims it’s received since the week ending March 14 haven’t been paid as of May 9.

In Wisconsin, officials are now working their way through a backlog equivalent to 600,482 weeks of unemployment payment for individuals. While in Vermont, 10,631 people, or almost 2% of the population, had not been paid the unemployment they were eligible for as of Thursday because of issues with their claims.

In Maryland, 135,533 of the 494,728 claims that had been submitted as of Wednesday are still being reviewed and haven’t paid, with a further 31,545 claims denied and subject to appeal. In a typical year the state would process 2,000 new claims weekly. Last week alone it saw a record 109,263.

Facebook Groups

With many people unable to get through to state hotlines and speak to officials, alternatives such as a Facebook Groups have sprung up. In Maryland one with more than 21,000 members has become a place to trade tactics for navigating the state phone system and a new online portal launched in April at the middle of the crisis.

Elinor Walker, a 60-year-old lawyer from Rockville, Maryland, watched her contract work disappear as a result of the crisis and, though she was receiving unemployment for a time, saw her payments evaporate as well when a new computer system was introduced in April.

“As far as I’m concerned it’s a pretty deep pile of manure and I am still looking for the pony,” she said.

On Friday her luck finally turned when after weeks of trying she got the payment she’d been waiting for.

The flood of claims is leading to what advocates for the unemployed say has been an increase in officials denying benefits for unexplained reasons and delays in those decisions.

Ringing Phones

In the state of Washington, officials say they have received almost 1.8 million unemployment claims since early March but paid benefits to just 751,149 people as of a report released May 14. The state says that the 1.8 million claims have actually been filed by a little over a million unique individuals, pointing to a problem with duplicate filings that has plagued many states thanks in part to overloaded systems that cause people to file multiple times.

Juliana Repp, managing attorney at the non-profit law firm Unemployment Law Project in Spokane, said the phone had been ringing almost constantly since March. There has been an increase in people denied benefits with no explanation, but a lot of callers simply want to know how to get through overloaded hotlines.

“I don’t see it letting up,” Repp said. “My other phone is ringing here.”

At the New York State Bar Association, which has set up a service to connect people seeking help with pro-bono lawyers, staff have seen cases in which people who filed for unemployment in mid-March were officially denied benefits only last week.

New York officials insist they are doing their best to cope.

‘Glue Trap’

“This is a massive crush on our system and all unemployment systems around the country,” Roberta Reardon, the New York labor commissioner, told reporters this week.

Part of the problem, she said, was a “federal glue trap” that had seen officials in Washington recommend independent contractors and gig workers, eligible for benefits for the first time, file for regular unemployment before changing their advice, leading to people having to file twice.

For that reason and others, Reardon insists that the number of pending claims in the state is a meaningless statistic. Yet withholding the numbers has also allowed Governor Andrew Cuomo to present what people still waiting to be paid feel is an inaccurately rosy picture. In response, the protest hashtag #PendingPurgatory has taken off among New York social-media users.

Will Barclay, the Republican minority leader in the state assembly, said he has been inundated with calls from constituents, some of them telling him they have been waiting as long as six weeks just to get a call back from the state. His criticism now is aimed at New York’s labor department refusing to release the number of pending claims.

“They should have at least an idea of how many claims have been submitted,” he said.

Shutdown Orders

For some, problems with the unemployment system have fed suspicions about government orders that have shut down the economy. But they also illustrate how a bipartisan congressional effort to extend and increase unemployment benefits to cushion the economic blow isn’t working for many Americans.

In Baltimore, Tabitha DiMattei, the 29-year-old mother of a 2 1/2-year-old, was furloughed from her job in events marketing April 14. She had been dutifully abiding by state orders to stay inside since mid-March. Her longshoreman husband, who has kept his job at the Port of Baltimore, is the one tasked with doing anything outside the home.

And yet there are no signs of the $936 a week she expects in unemployment -- a figure that would have largely matched her salary before the crisis -- or explanations why it is missing. It has made her question what the whole quarantine exercise has been for. Those questions will only grow if she is unable to go back to work in July as she expects.

“If that doesn’t happen, God knows what will happen,” she said. “The frustrating part is the last thing you want to do is stress over your finances when you are stressing over your health and your family’s health.”

Mike Ricci, a spokesman for Maryland’s governor, said the state was doing what it could to fix problems with its computer system and to add operators for the unemployment hotline. Yet the apparent reality is that it could take months to work through the backlog of cases needing adjudication. A single case can take three weeks, Ricci said.

“We need to do better, no question,” he said. “It will improve. I just don’t know how quickly.”

© Copyright 2024 Bloomberg News. All rights reserved.

Millions of Americans who are owed tens of billions of dollars in unemployment benefits are still waiting to receive the help they have been promised two months after the Covid-19 pandemic unleashed a historic wave of layoffs.
jobless, benefits, millions, waiting
Friday, 15 May 2020 06:40 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.

Interest-Based Advertising | Do not sell or share my personal information

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
© Newsmax Media, Inc.
All Rights Reserved
Download the NewsmaxTV App
Get the NewsmaxTV App for iOS Get the NewsmaxTV App for Android Scan QR code to get the NewsmaxTV App
America's News Page
© Newsmax Media, Inc.
All Rights Reserved