Another 837,000 Americans sought unemployment benefits last week, according to government data released Thursday, a 4% decrease from the week before. As the coronavirus pandemic passed the six-month mark, the numbers showed a labor-market swoon that shows little sign of easing.
Since mid-March, 61.9 million claims have been filed nationally, including more than 8 million from California. The state Employment of Development Department’s aging systems and inadequate call centers have been so inundated that the agency is refusing to accept new unemployment claims until Tuesday — a pause it hopes will allow time to launch an easier application process.
For months, California has accounted for a quarter or more of national claims while making up only 12% of the U.S. population, so the state’s pause could affect the data, a significant economic barometer that can move the stock market, for last week and this week. When the state employment agency resumes processing applications next week, the figures could likewise rise, experts said.
Department of Labor economists punted on the issue in Thursday’s report, repeating the previous week’s numbers from California in the new report until more meaningful data could be obtained. California saw 226,179 new claims for unemployment in the week that ended Sept. 19.
The pause to allow system upgrades is the result of recommendations of a task force assembled by Gov. Gavin Newsom. The group includes Jennifer Pahlka, the founder and former executive director of the nonprofit Code for America who has also worked on digital revamps of federal agency software.
Mark Schniepp, the founder of the California Economic Forecast, said he expected that when we see the actual numbers from the pause, there will be fewer claims for the last two full weeks of September, and the numbers will “blip” upward after Tuesday.
California’s effective rate of unemployment based on the weekly numbers is more than 15%, Schniepp said, a level where it has been stuck for the past two months.
“California is not progressing in the recovery and is severely lagging in the nation,” he said. “This is largely because we are nearly the most shut-down state still.” The state’s new four-tier system for reopening businesses based on county health statistics is “agonizingly slow and still very restrictive,” he added. Schniepp does not expect things to improve for the rest of the year.
San Francisco Chief Economist Ted Egan said past months’ jobless numbers hint at a labor market recovery, but unemployment insurance claims continue to point toward “bad news.” But, he added, because of the stresses the state employment department has been under and the two-week reset, “There’s an awful lot of noise in the data.”
EDD spokeswoman Loree Levy said the staff will still process existing work to establish new claims, and claims under certain programs will continue to be automatically filed. The agency said when it introduced the two-week reset that those who lose jobs during the period will ultimately not see a delay in payments, because it expects their applications to be dealt with more quickly when processing resumes.
Key to the revamp is a new identity-verification system from ID.me, a McLean, Va. company that has done work for the Department of Veterans Affairs, the California Department of Motor Vehicles and other government agencies. Levy said the ID.me system will verify identities more quickkly than under the old system, under which four out of every 10 claims required manual checking.
Andrew Stettner, a senior fellow at The Century Foundation and expert on unemployment insurance, said the ID.me system could potentially be a more effective way to combat fraud by organized crime groups that use identity theft. Traditional measures have caused people to be wrongly accused of fraud and slowed claims, without getting to the root of the problem, he said.
Paula Manildi had a relatively positive experience with getting her benefits until May. After receiving eight weeks of full unemployment benefits, the self-employed information technology professional in Oakland started getting forms from the state that suggested she might have been overpaid.
With her biggest client, a Berkeley used clothing store, shuttered during the pandemic, Manildi sent messages about hours worked and dollars earned from other jobs to the employment department. She submitted forms in July, hoping she would learn how much she needs to pay back to the state. Months later, she has yet to receive a response.
“The state needs money. We know it needs money. How long is it going to take for them to figure it out?” Manildi said. “Having a gig worker on unemployment is different for them, so they probably don’t a system set up to say: ‘Give me this money back.’ But until they give me some form of communication, I’m scared to fill something out and mess up the works.
“I know they can’t answer the phone. They get way too many calls. I suppose I could write to them, but to me, that’s just way to get lost in the shuffle.”
Now off unemployment and back to creating reports and otherwise supporting her business clients, Manildi, a computer programmer, tries to keep her sense of humor about the state unemployment website that has caused so much anguish during the past six months.
“Granted, their website is awful,” she said. “You press a button, and nothing. Then, you press it again, and it works. Without knowing that you have to press it twice for some stupid reason, it can be frustrating.”
Rusty Simmons is a San Francisco Chronicle staff writer. Email: rsimmons@sfchronicle.com Twitter: @Rusty_SFChron
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October 01, 2020 at 08:01PM
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