On Saturday night, the State of California dropped a damning report about how the state has dealt with — some would say not dealt with — the tidal wave of unemployment claims it has experienced since counties and businesses were shut down due to the coronavirus pandemic.
The report revealed that the state Employment Development Department’s backlog of unemployment insurance claims is growing by 10,000 a day during the COVID-fueled recession. That’s just the backlog.
On Monday, Gov. Gavin Newsom sought to address the issue.
“This system is an old, 30-year-old system,” he said. The computers and software that help it run “need to be strewn to the waste bin of history.”
Newsom said that the report came out this weekend because he didn’t want to wait to begin implementing its recommendations. “The reset began this weekend,” he revealed. The reset process is expected to end on October 5.
Among the actions being taken:
-Implement a new automatic ID system. Newsom said the software could “substantially eliminate fraud.”
-Process improvements, including redeploying more experienced staff in senior roles
-Providing people information in a mobile-friendly manner
“We believe this will fast track what would otherwise be a manual process that could take up to 60 days,” said the governor.
Newsom said he expected to have “substantially addressed” the backlog within 90-100 days. The goal is to have new applicants not impacted by the backlog.
The report is the result of a strike team commissioned by Newsom. Yolanda Richardson, Secretary of Government Operations, and Jennifer Pahlka, former US Deputy Chief Technology Officer, lead the team in an attempt to determine needed reforms at the Employment Development Department.
From the report:
Ultimately, UI claims processing is a logistics and workflow problem. Every action (nightly system batches, manual review, waiting for claimant information) runs at a fixed speed (time per item), with a relatively fixed throughput (total items per time). In some cases steps can be sped up, or throughput increased…
But, it asserts:
As long as the inbound rate of claims per day exceeds what the slowest, lowest throughput part of the system can complete in a day, the backlog of undetermined claims will grow unbounded until the new claims rate decreases.
EDD’s maximum number of claims manual processing of claims never exceeded 2,400 per day in 2019 or 2020, according to the report. New Unemployment Insurance data show that right now, more than 20,000 claims per day are sent to be manually processed, mostly for identity verification.
As Deadline’s Dave Robb reported exclusively earlier this month, initial unemployment claims from Californians previously working in the state’s arts, entertainment and recreation sector slowed in August, falling to the lowest levels since the pandemic shut down venues across the state in mid-March.
The decline of initial claims in August also coincides with the termination of the $600-a-week federal unemployment benefit that ended at the end of July.
During the past five weeks, nearly 33,000 out-of-work Californians in the sector have filed for unemployment insurance, raising the total number to more than 260,000 statewide since the pandemic began. Prior to the U.S. outbreak, an average of 730 workers in this sector applied for unemployment benefits during the first nine weeks of 2020.
The Lost Wages Assistance money approved by President Donald Trump via executive order is expected to arrive in Californians’ mailboxes any day now. The funds – taken from the Federal Emergency Management Agency – are only expected to last for about four to five weeks.
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