Unemployment Office Errors Are Costing the Poor

Since the state of Wisconsin pioneered the idea of unemployment benefits in 1932, Americans have known they can rely on their state governments for a little help when they're down and out. Except when they can't.

Increased poverty during the recession has revealed many holes in the safety net, including dysfunctional unemployment benefit offices that unfairly cut off people's benefits, nearly allow the benefit fund to disappear and/or rely on "Flintstone-era technology" to handle millions of new claims. One thing is for sure: as the number of first-time unemployed Americans continues to rise, states need to spend less time cutting people's benefits off and more time figuring out how they can better help those in need.

The situation may be the most dire in South Carolina, which has the fourth-highest unemployment rate in the country at 12.6 percent. There, the commissioners that oversee the unemployment benefits fund allowed the endowment to go broke without raising a red flag. The state government plans to borrow a billion dollars from their federal government to fix that little issue. That news came after a 2008 publicity stunt in which Gov. Mark Sanford refused to accept any federal loans, threatening to cut off all South Carolinians' benefits checks. And now comes word that the agency owes $950,000 in penalties to the IRS because it hasn't been paying taxes. The state House plans to discuss the immediate removal of the three unemployment commissioners in two weeks.

Meanwhile, an investigation last month in California revealed that the state had made no effort to use $66 million given by the federal government to replace computer and call center technology that was too old to do the job properly. The money has been in state coffers since it was allocated in 2003, but the antiquated systems are still in place seven years later, as nearly 800,000 Californians suffer delays in their checks. After Congress ordered an extension of unemployment benefits last fall, it took California five weeks to resume sending money to qualified residents. If the call centers and computer systems had been modernized when they were supposed to be, the upgrade would have been completed before the recession began, making it feasible to handle the increased claims. As it is, repairs are starting now, but will take at least several more months.

That state government offices like those that administer unemployment checks are messy bureaucracies should come as a surprise to no one. Most of the time, they manage to do the job and send checks out to people who need them. The problem is, that isn't nearly good enough -- it's like saying the fire department will respond to your burning house most of the time.

Photo credit: americaspower