Following eight years working in luxury retail and more than 20 years in finance before that, Francis Rennie is considering retiring in September.
“I can’t do this anymore,” says Rennie, 65, who has been furloughed since March because of the coronavirus pandemic.
It’s not a rash decision, he says. He has waited nearly four months for his first unemployment payment from New York State’s Department of Labor. That’s after spending the better part of a month struggling to access the state’s website and unemployment claim assistance line for help with his application. Finally, he received a notification from the state: It was a letter that arrived in late May stating he had been approved. Since then he has received others reminding him to recertify for his benefits, which he has done each passing week.
“But there’s no payment. Nothing—it’s very frustrating,” he says. Because the state’s unemployment offices were closed, “there was no one you [could] go to and plead your case. I’ve never seen anything like this.”
Francis is one of more than 35 million American workers who have filed for unemployment insurance payments since March due to the pandemic. What’s worse, he’s among millions who are still waiting to receive those benefits. States are dealing with an unprecedented volume of applicants, resulting in long delays, websites crashing, and jammed phone lines. But many researchers and advocates say the pandemic has exposed a truth about the nation’s unemployment insurance system that can’t be ignored anymore: the system is broken.
In some cases, the system is broken by design. In a recent interview with WFOR in Miami, Governor Ron DeSantis (a Florida Republican) admitted the state’s unemployment insurance system is designed to not pay out claims. The state’s Republican leadership has also acknowledged in interviews with Politico and other outlets that they’ve left the system underfunded for over a decade on purpose, opting for cuts in benefits for the unemployed rather than raising tax obligations for businesses. This meant that—rather than receiving 26 weeks of insurance payments—Floridians receive only 12 weeks, while having plenty of hoops to jump through to even get that.
Florida isn’t the only state that’s facing significant problems, says Andrew Stettner, senior fellow at the Century Foundation in New York. “After enjoying a record-long economic recovery following the Great Recession, the nation’s first responder to economic distress—unemployment insurance—is still not ready for duty,” he says.
Legislation, such as the Families First Coronavirus Response Act signed into law in March and in effect until December 31, seemed to mark the move toward shoring up many of the state unemployment systems that have experienced years of disinvestment and underfunding. Congress also in March immediately followed up with the CARES Act, a $2.2 trillion economic stimulus package. That package created new unemployment benefits, including Pandemic Unemployment Compensation, a $600 weekly supplemental benefit that officially lapsed July 31.
In the latest iteration of the HEALS Act, Senate Republicans have proposed to slice PUC by two-thirds to $200 per week for the next two months, and then move from a flat amount to a capped benefit equal to the difference between state benefits and 70% wage replacement. The reduction would have nothing but a dire impact on the more than 25 million Americans currently unemployed and receiving the emergency income boost, according to a new analysis by the Century Foundation.
Unemployment benefits, compounded by the PUC supplement, helped families stay afloat this spring and early summer, paying for food, rent, and other bills. The question now is: What are the unemployed to do? Let’s meet a few of the many who are feeling trapped in a maze with seemingly moving walls blocking their escape to some financial stability.
Mohammad (New Haven, Connecticut): A question of eligibility
At the onset of the coronavirus pandemic, Mohammad—a gas station cashier in New Haven, Connecticut—faced the perfect storm. In April, he was scheduled to have his gallbladder removed, which resulted in him having to take a month-long medical leave. His boss told him he couldn’t hold his job open that long. Mohammad went ahead with the surgery but was laid off. While in recovery, he was exposed to COVID-19. Yet amid his health circumstances, he worried most about how he would care for his wife and two children, including an infant born last fall.
“We live a simple life,” says Mohammad, who immigrated to the U.S. from Afghanistan just over two years ago. “[Still], I have to pay my bills.”
He learned about unemployment insurance through a caseworker assigned to him and his family by Integrated Refugee and Immigrant Services when he first arrived in the United States. At that time, she helped them to get settled in their new home, including cash and food assistance. However, “I [didn’t] want to be relying on government resources,” says Mohammad, who is taking accounting courses at a local community college. “I want to rely on myself.”
Upon being laid off this year, his caseworker stepped in to help again and urged him to apply for unemployment benefits in April, but he was denied because the reason for his unemployment didn’t fit the current eligibility requirements even though he was out of work for health reasons. He also applied for pandemic unemployment assistance, only to find his application has been held up without a reason. It has been pending for several months.
“Why does the unemployment department take such time to review the case?” he wondered. “They could review the case and decide that I’m eligible and give me something, and then go through the rest and give me more, later. It is a really stressful time.”
Anh (Oakland, California): Modernizing old IT systems
A simple computer glitch in the unemployment system can cause a barrage of problems for people applying for unemployment. That’s what Anh, a medical assistant from Oakland, discovered when she shouldered the responsibility of helping her parents navigate California’s Employment Development Department unemployment system. Her parents, Vietnamese immigrants who own a nail salon in Lodi, California, watched business dwindling as news about the pandemic bubbled up. Soon after, it was shut down under the state’s shelter-in-place order.
Anh first sought out a Paycheck Protection Program loan, but funding for the program during the initial round in April had been depleted by the time she found a lender. At the same time, she closely monitored news reports about the CARES Act, hoping it would be implemented soon. She waited as long as she could to apply on her parents’ behalf, as they dipped into their savings to cover rent for their business and home, and to pay other bills.
“My parents were getting antsy,” she says. “As their daughter, I felt like I really needed to step in and do a lot to help them.”
Anh also had to tackle her own application in mid-March after her hours as a medical assistant were reduced, but she wasn’t too concerned. She had applied for unemployment in 2017 so she was familiar with EDD and the system. Still, she heard the state had a history with technical glitches. “This time, it was so hard because there was no clear timeline or information on anything,” she says.
She ended up applying twice for PUA for her parents, which was when the major problems really kicked off, she says. During her first attempt to submit their application, it was unclear if PUA had been implemented by the state, and therefore they were denied. On her second attempt, only her father’s application was approved for $806 a week—$206 plus the additional $600 payment. Her mother’s application, on the other hand, wasn’t approved because the EDD portal had a glitch in its computer system that incorrectly processed her birthdate. That set off a host of cascading bureaucratic and technical issues, including flagging her mother’s account for identity verification.
Her mother’s application is still pending, and the couple is trying to make do, living off of what’s left in their savings and her father’s unemployment benefits. “They’re really nervous. My mother calls me literally every day asking if I’ve heard anything,” says Anh. “There’s nothing I can tell her.”
Nakita (Chicago): Feeling safe at work
Nakita left her position as a certified nursing assistant at a senior living community once Illinois issued its stay-at-home order in March. For her, there was no other choice. The neighborhood daycare had closed, so she had nowhere to leave her two children. More importantly, she didn’t want to potentially expose her family to COVID-19—especially her mother, who is immunocompromised. And the chances of that happening were high, she says, since she worked with a population susceptible to the virus.
“So why do I have to jeopardize the health of everyone around me—my children, my mother, my fiancé, and even those I work with?” asks Nakita. “I shouldn’t have to make a decision between my life, my family’s life, and needing to make a living.”
She held off until June to apply for unemployment insurance with the Illinois Department of Employment Security because she had enough in her savings to care for her family. She also recently received a refund for her 2019 taxes and the federal stimulus payment provided through the CARES Act—both of which she says took care of some basic necessities.
When she did file for unemployment, it struck her as odd that she was required to report her quarterly income, dating back 18 months. That included time she spent last summer working for Amazon.com Inc., which she expected would nullify her claim. So far, her last employer has yet to respond. “So, I’m still here waiting,” says Nakita.
That doesn’t mean she’s sitting around doing nothing. She’s on the hunt for a new job and has continued taking course prerequisites in nursing, though in the current environment she has been examining all of her future options.
“I’m not going to lie—this pandemic has frightened me,” she says, “even though I love helping people and want to get back to work.”
Destiny (Chicago): $600 a week versus returning to work
During the fall of 2019, Destiny landed a seasonal job at a local zoo, working in one of its many cafés. Her hours were just enough to support her and her three children until news about the coronavirus pandemic hit. Her hours were reduced at first. Soon after, the zoo shut down under the state’s stay-at-home order, as did many of Chicago’s entertainment and recreational venues. She was furloughed with no idea of when she would return.
She immediately applied for unemployment in March, as her employer advised. She was approved, but she didn’t receive her first benefits payment until May, which was backdated to March and included the extra $600 a week. “I thought maybe it wasn’t going to happen,” says Destiny, who was able to get financial assistance through community-based organizations and her mother while she was waiting. “It was a big relief to get it. I didn’t know how the system would work, or anything like that.”
In the last month, Destiny returned to work under new safety protocols. She’s now serving small treats and other food items at one of the zoo’s outdoor carts, instead of inside a café. She makes less doing this than if she simply stayed home. “Honestly, I’d rather work than collect unemployment,” she says.
Destiny echoes the voices of many who have gone back to work, or even searching for a job in this chaotic market. Her eagerness to work dispels the conservative view that the extra $600 unemployment payment discourages people to return to work or even hunt for a job. A recent study from Yale University economists also has shown that workers, mostly making low wages and receiving low benefits, “did not experience larger declines in employment when the benefits expansion went into effect,” the report reads. Those unemployed people returned to their previous jobs at similar rates as others, according to the report.
In fact, there was “no evidence that more generous benefits disincentivized work either at the onset of the expansion or as firms looked to return to business over time.”
For Destiny, the supplement didn’t sway her from her focus. “I want to work,” she says. “I have things I want to do with my career and for my kids.”
Monée Fields-White is currently a research fellow with the New America New Practice Lab focused on human-centered design policymaking for economic well-being. Based in Los Angeles, she’s also an award-winning writer and journalist, whose career spans over a decade developing a broad spectrum of stories on a national and global scale.
New America has partnered with the Century Foundation to build a data dashboard that tracks the performance of state unemployment insurance systems across a number of key indicators. Find it here.