Thousands Wait In Unemployment Backlog

As Congress approved a new relief package to help people facing unemployment due to the coronavirus pandemic, thousands of Wisconsinites are still waiting on their payments.

Angela Torres of Berlin said she's been waiting since April for word on her unemployment claims. She had to leave her job because of an injury that made her unable to stand for long periods of time at her assembly job. She had surgery scheduled for April, which she hoped would allow her to return to work, but it was postponed because of the pandemic.

She didn't hear anything about her claim until September, she said, at which point she was denied.

"They said I didn't contact my adjudicator, but I didn't know who it was. There was nothing in my portal about it," she said, referring to her online account with the state.

She appealed her claim at the end of September, but hasn't yet had a date set for a hearing, she said.

It's been frustrating, she said. She gets different answers from the claims specialists who answer the phones when she calls.

In the meantime, she's had to file for bankruptcy. The waiting has been hard, she said.

"I've got no income, the tires on my car are bald," she said.

Department still working to clear the backlog

The workforce department is facing a backlog of nearly 27,000 unemployment claimants, down from about 42,000 in mid-December. The state has seen a large drop in those waiting on claims in the last month, due to the implementation of a partnership with Google Cloud.

Amy Pechacek, interim director of the Department of Workforce Development, in November said she hoped the department would be able to clear all the backlogged claims by the new year. When asked this week if the department is on track to meet that goal, Alaina Knief, a communications specialist, said "all claims older than 21 days will be fully resolved or actively in process by the end of the year."

When asked about the backlog of appeals, filed by those who were denied unemployment payments, Knief said the department will "continue to work to reduce" the appeals caseload.

But the department may also face a new challenge, thanks to the passing of a stimulus package this week.

Included in the program was an extension of the federal unemployment programs, such as Pandemic Unemployment Assistance, which was created to provide unemployment to those who may not typically qualify, like self-employed or gig workers, for an additional 11 weeks - meaning they'll be available until March 14.

The package includes $600 stimulus checks for those earning up to $75,000 a year in taxable income, based on 2019 tax returns. But the amount of the checks is in question, after President Trump blasted the stimulus bill Tuesday night on social media, calling for the amount to be raised to $2,000 per person.

The challenging portion of the package for the department, though, will be the additional $300, which will be given weekly to those receiving unemployment. It will likely take the department time to program their system to disburse the funds. Knief said the department doesn't yet know how much programming will be needed.

In the past, it's taken the department weeks and even months to enact new programs - such as PUA or extended benefits - meaning that claimants don't see their expanded payments for quite some time.

If people don't see those benefits soon enough, the stimulus effect on the economy could be more limited than intended, said Noah Williams, a UW-Madison economics professor. That's what happened early in the pandemic after the CARES Act was passed and the money wasn't able to go out soon enough because of programming and the backlog.

"The rationale of expanded benefits was to support people during the height of the pandemic and people weren't able to go to work," Williams said. "It limited the impact of the enhanced benefits."

'A lot of people won't get paid'

Wisconsin hasn't been the only state facing a landslide of unemployment claims since the pandemic began, said Andrew Stettner, a senior fellow with The Century Foundation, an independent think tank that researches issues such as economic, racial, and gender equity in education, health care and work.

But the state is falling low on the ranking of unemployment claims paid out. Between March and Aug. 15, only about 42.5% of claims were paid out, according to a Century Foundation study co-authored by Stettner.

He said it's likely because Wisconsin seems to have become a little more strict with how they approve or deny claims.

"The feeling from some advocates I've spoken to is the program administration became more restrictive, more likely to deny and question claims," he said. "That means a lot of people won't get paid."

With more denials, there are more appeals, which are also backlogged. But it also means that there is more of a burden on other social programs.

"There's more burden on food pantries, more burden on schools, more burden on homeless shelters," he said.

Poverty becomes an issue for the state beyond unemployment, with an impact on the economy when people don't have money to spend. The Wisconsin economy is back to about three-quarters of what it was before the pandemic hit, Williams said.

"Overall, we've fared somewhat better than the national averages," he said. "If you look at overall levels, the pandemic has probably put us behind a few years in terms of growth, but our economy is relatively resilient."

When the economy - and employment - get back to normal depends on the course of the virus, he said. Mass vaccination is going to be needed before life returns to normal.

"It's ultimately the virus that's driving everything," Williams said. "Until that's in the rearview mirror, it's unlikely we'll get back to where we were before."

"The feeling from some advocates I've spoken to is the program administration became more restrictive, more likely to deny and question claims. That means a lot of people won't get paid."

Andrew Stettner

a senior fellow with The Century Foundation