Record Jobless Claims Are Overwhelming States’ Aging Tech

Laid-off workers struggle to file claims for unemployment benefits; economists say the situation will likely get worse….

Christine Cemelli was at home on March 16 when she got the text. Her husband, a chef at a fine-dining restaurant in New Jersey, had been laid off. Earlier that day, Governor Phil Murphy had signed an executive order restricting the operations of non-essential businesses in an attempt to slow the spread of the novel coronavirus. Restaurants could stay open for take-out and delivery orders only, but that didn’t make financial sense for her husband’s restaurant. Cemelli quickly launched into action.

“Literally, as soon as he texted me that he was getting laid off, I jumped on the computer,” Cemelli recalls. She had seen reports of layoffs around the county in response to the pandemic, and knew that with each hour that passed, it could become more difficult for her husband to claim unemployment benefits.

Cemelli began working her way through New Jersey’s online unemployment application system at 1pm. She got about halfway through the application before an unknown server error kicked her out. None of her work had been saved, so she started again from the beginning.

Ten hours later, at 11pm, she was still trying desperately to submit a claim. The site was even buggier at that point, Cermelli says; she couldn’t make it two pages into the application before it crashed. She woke up early the next morning to try again, but no dice. She encountered the same issues in the afternoon and evening. Cermelli considered trying to apply over the phone, but was dissuaded after family members said they had found that even more difficult. The department was so overwhelmed with jobless claims that it was telling many callers to try again another day.

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It’s a problem countless Americans have struggled with in recent weeks. As the Covid-19 pandemic sweeps across the nation, state and local officials have taken drastic measures to curb the spread of the disease. Nearly one in two Americans are now under orders to shelter in place, forcing the closure of all non-essential businesses and many layoffs. Even businesses that remain open, like the restaurant where Cemelli’s husband Brett works, are reducing their staffs. Unemployment offices are struggling to keep up.

The US Department of Labor said on Thursday that a seasonally adjusted 3,283,000 people filed for unemployment last week, the highest total since the department started keeping track. Unemployment claims rose more than 10-fold from the prior week, and were more than four times higher than the previous record, in 1982. More Americans have lost their jobs in the last week than during the first year of the Great Recession. The employment carnage of other natural disasters, like Hurricanes Katrina and Sandy, doesn’t even come close.

The coming weeks are likely to be even worse, economists say. The figures released Thursday reflect claims from last week, when states like California, New York, and New Jersey issued shelter in place orders. But other states didn’t follow suit until more recently. Surges in unemployment claims in these states won’t be reflected in the most recent federal figures. And as people who lose paychecks cut back their spending, the economic effects will multiply.

“This is not going to be the only spike we’re going to see,” says Betsey Stevenson, former chief economist of the US Department of Labor under President Obama. “We’ll see another rise again in the next week.”

The number of Americans who’ve recently lost jobs is likely even higher, Stevenson says, because some people who had trouble filing claims just gave up. State websites are “just having problems managing the traffic,” she says.

For Cemelli, it would take nearly 72 hours of entering and re-entering data before she successfully filed for her husband’s unemployment benefits, around midnight on March 18. She thinks staying up late helped, because there may have been fewer people trying to get through to the site. “I was amazed when I finally got through,” she said.

Annalisa Plumb of Brooklyn, New York, hasn’t worked since March 13. After Mayor Bill DeBlasio ordered the closure of non-essential businesses in New York City, she was laid off from her job as a waitress. She tried to file for unemployment benefits the following morning, but quickly ran into trouble with the state of New York’s website.

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