Advocates: Shapiro must fix Pa.’s ‘broken’ unemployment system | Wednesday Morning Coffee

An already fragile system ‘crumbled’ during the pandemic. A new report offers a path to fixing it

By: - November 30, 2022 7:04 am

Jobless workers demonstrate in Miami Springs in support of continued federal unemployment benefits in the pandemic economy. (Joe Raedle/Getty Images)

If it’s true that the COVID-19 pandemic tested all of us in ways we never anticipated, few were tested more than the thousands of jobless Pennsylvanians who found themselves negotiating the commonwealth’s unemployment compensation system as lives and livelihoods literally hung in the balance.

The already fragile system “crumbled” during the public health emergency, a new report by the labor-friendly Keystone Research Center in Harrisburg asserts.

And while the number of claims has returned to pre-pandemic levels, the system is still rife with problems, and it’s up to the incoming Shapiro administration to fix them.

For instance, the state:

  • Made only 32 percent of first-time [unemployment] benefit payments within 15 days, ranking 49th out of 50 states.
  • Made 56 percent of payments within 70 days, ranking 48th nationwide. And nearly half of unemployed workers wait more than 10 weeks before receiving their first payment.
  • Ranked 44th for the average age of first appeals—244 days, about twice the U.S. average of 127, the report’s authors wrote.

“Unemployment insurance is vital to [Pennsylvania’s] workers and economy. It keeps food on the table and a roof over families’ heads when workers lose jobs. It sustains buying power so that our economy doesn’t spiral down. With an already unstable economy, Pennsylvania must be able to rely on its unemployment system,” Stephen Herzenberg, the center’s executive director, and one of the report’s co-author’s, said in a statement.

(Getty Images)

In response to the challenges of the pandemic, the state launched its “Benefit Modernization” or “BenMod” system in June 2021, when 170,000 people were still collecting benefits, instead of waiting until the end of enhanced federal benefits three months later, when the number of claims fell by nearly half, according to the report.

The new system makes applying for assistance “extremely challenging,” particularly for those who are not tech-savvy, the report’s authors wrote.

“Even so, most claimants must use BenMod because jammed phone lines prevent filing through UC Service Centers,” the report’s authors wrote, adding that the “state’s experiences with BenMod are the latest evidence of the hazards of wholesale contracting of IT systems to for-profit vendors. Pre-Wolf [administration] examples include wasting $170 million on an IBM contract.”

In an appearance before a legislative panel last February, state Labor & Industry Department Secretary Jennifer Berrier told lawmakers that the commonwealth’s challenges had been exacerbated by staffing issues and fraud, WGAL-TV in Lancaster reported.

“We are under attack by very sophisticated foreign fraudsters who are looking to take advantage of Pennsylvania’s UC system and also the people who live in Pennsylvania,” Berrier told lawmakers, the station reported.

Berrier told state House Democrats that fraud was one of the reasons Pennsylvanians had to wait so long to even learn whether their unemployment payment would be processed, the station reported.

State Rep. Sara Innamorato, D-Allegheny, said Tuesday that her office had been “flooded with calls from unemployed workers during the pandemic because they couldn’t get the help they needed from the unemployment system.”

Pennsylvania Gov.-elect Josh Shapiro speaks to supporters in Montgomery on Tuesday, 11/8/22 (screen capture)

The report offers three, guiding principles to Shapiro, the current state attorney general, to both fix the system and to make it more equitable, after he takes office in January 2023.

The state should:

  • Provide quality, timely, transparent, and humane service to workers by, among other things, “[ensuring] that all claimants, including non-English language speakers and the technologically challenged, can access the system and apply for benefits,” the report’s authors wrote.
  • Build a strong financial and technological foundation for unemployment insurance by “[creating] a solvent system without cutting benefits or eligibility by expanding the wage base on which employer [unemployment insurance] wage taxes are imposed.”
  • And “improve benefits and reemployment supports” by “[broadening] eligibility [requirements] so that more workers receive unemployment insurance benefits,” the report’s authors wrote.

“For the last three years we’ve had to help countless people fight to get the benefits they are owed, and we continue to do so every day,” Barney Oursler, the director of the Mon Valley Unemployed Committee, said in a statement. “The problems with unemployment insurance can no longer be blamed on the pandemic. The system has failed and it needs to be rebuilt.”

Now, lawmakers have “an opportunity to right the wrongs of the past through legislative action,” Innamorato said. “With this report’s release we have a path to restore workers’ confidence in the unemployment system and build a safety net that provides timely, transparent, and humane service to workers.”

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John L. Micek
John L. Micek

A three-decade veteran of the news business, John L. Micek is the Pennsylvania Capital-Star's former Editor-in-Chief.