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How did Wisconsin's unemployment system get so bad?

The system crumbled during the pandemic
Posted at 6:57 AM, Nov 17, 2020
and last updated 2020-11-17 16:53:49-05

Thousands of Wisconsin residents are still waiting for unemployment benefits, as a backlog that started back in March continues.

Years of neglect and changes to unemployment law led to a complicated system that many found confusing. When they made honest mistakes and their claims were held up, they all tried to call the department at the same time, creating a log jam.

Victor Forberger, a Wisconsin labor attorney that has followed the unemployment problem closely, says those honest mistakes raise red flags on applications, which can lead to an adjudication process.

"As lots of people find out, it's incredibly complicated and you don't understand what's being asked of you," Forberger said. "So you either guess or you make or you call someone to try and get some help."

The I-Team partnered with the nonprofit news service Wisconsin Watch to understand how the unemployment system got to this point.

The Department of Workforce Development, the agency in charge of distributing benefits, says the 1970s-era technology used to process claims is partly to blame for the backlog.

Wisconsin Watch reported that in 2007, then-Democratic Gov. Jim Doyle pulled the plug on a major overhaul to the system, as the companies contracted to do the work were about to go over budget.

In an open records request, the I-Team found that last year, the DWD, now under Democratic Gov. Tony Evers, reached out to at least five companies to demonstrate their claims processing technology to either upgrade or replace the outdated system.

A department spokesperson said, "DWD leadership began looking at multi-year funding options... Unfortunately, COVID-19 hit with full effect before the Department could move forward with any of these options. "

It's not just the software to blame. In 2011, Wisconsin Watch reported that Republicans under then-Republican Gov. Scott Walker enacted a number of unemployment changes, including a one-week waiting period for benefits, disqualifying people on federal disability benefits and increasing criminal penalties for false statements made on unemployment applications.

Thousands await jobless aid as Wisconsin leaders blame each other for failure

Walker also signed a lame-duck law restricting the governor's ability to wave requirements for government programs like unemployment. That passed just before Evers took office.

Forberger said those additional hurdles meant fewer people accessed unemployment benefits.

In 2007, 50 percent of Wisconsin workers had accessed unemployment, according to a study by the National Employment Law Project. In 2016, that number dropped to 32 percent of workers.

"People stopped looking to unemployment benefits when they lost a job," Forberger said. "And they just would go to short term work at your fast food restaurant or other low wage work to make ends meet. So, that essentially low a low wage work can substitute for the appointment system."

He added the neglect towards the unemployment system was reflected in DWD staffing. At the time the pandemic hit, there were only 90 people working in the call center.

A 2014 audit found that during peak times, that call center automatically blocked 80 percent of calls. During the pandemic, the same agency found in a separate audit that just one in 200 calls made it to the department.

"It's like trying to duct tape a support beam is broken in your house," Forberger said. "It's not going to work."

Wisconsin isn't alone in its inability to quickly disperse benefits out to people. Nationwide only 56 percent of claims were paid between March and August, according to an analysis done by The Century Foundation.

However, Wisconsin was well below that national rate, paying 42.5 percent during that time period.

Forberger says one thing the state can do right now is to educate jobless residents on how to navigate the system.

"Other states have done advertising media campaigns to explain this stuff, Massachusetts, the town halls zoom town halls, where people could call up and ask about their claims," he said.

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