Thousands await jobless aid as leaders blame each other for failure

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Marty Hobe
TMJ4 News
and Bram Sable-Smith
Wisconsin Watch/WPR

As Wisconsin businesses closed this spring to slow the spread of COVID-19, jobless filings and phone calls flooded the Department of Workforce Development — too quickly for staff employees to keep up. But DWD Secretary Caleb Frostman remained optimistic.

In a May 4 email, Frostman told the Unemployment Insurance Division Administrator Mark Reihl to “hang in there.”

“If we can get through May, I think we will be cooking with gas with all the new people on board and call centers up and running,” Frostman wrote.

Three days days later, Frostman emailed Reihl before a meeting: “We have a great story to tell of our staff working themselves to the bone on behalf of claimants and we’ve been putting the pieces in place to build that necessary infrastructure to succeed through COVID.”

Staring down nearly 400,000 unprocessed weekly claims just after Memorial Day, Frostman told a state Senate committee that his department expected to work through the backlog by early October.

Now three weeks into November, a still-raging pandemic is threatening an economic recovery and Gov. Tony Evers has ousted Frostman. Families are still waiting on jobless claims filed last spring. Many have missed bill payments or even worse.

Wisconsin’s unemployment safety net has buckled under the stress test. More than 1 million filed initial claims since March 15. Nearly 93,000 applications for regular and federal pandemic aid had yet to be processed or adjudicated by Nov. 14.

Ben Jedd, a DWD spokesman, noted that 7.7 million weekly claims flooded the department since March 15 — up from 7.2 million claims from 2016 to 2019.

“DWD has been dealing with more than four years of work in eight months,” he said.

Many states have struggled to distribute jobless aid during the pandemic, but Wisconsin fares worse than most. Wisconsin paid 42.5% of all initial claims filed between March and Aug. 15 — far below the 56% national average, according to an analysis by The Century Foundation, a progressive think tank.

“There are people who are talking about suicide. Because they’re just waiting and waiting — because the backlog is so bad,” said Victor Forberger, supervising attorney for the University of Wisconsin’s Unemployment Compensation Appeals Clinic.

“The whole economy is going into a tailspin, because the department is falling through. And I worry about folks — and what’s going to happen if fundamental change doesn’t happen pretty soon.”

Limiting benefits access

The pandemic struck after Wisconsin and other states toughened rules for accessing unemployment benefits — in the name of reducing fraud — and failed to bring to up to date antiquated computer systems. Beginning in 2011, the Legislature under then-Gov. Scott Walker, a Republican, enacted a series of laws that: setting up a one-week waiting period for benefits (temporarily waived during the pandemic), increasing work search requirements for recipients, disqualifying people on federal disability from accessing unemployment compensation and increasing criminal penalties for false statements or representations on applications.

Walker also made claims filing more confusing, Forberger said, by removing guidance that helped people navigate the process.

Online headaches

Meanwhile, DWD’s shift to online-only claims filings have brought headaches to some residents, said Forberger. Beginning in 2017, DWD began requiring most claimants to initially file online and retired an automated phone system for filers.

Nygren said the priority on online claims “made the system better, and actually helped get more applications through the process.”

But the singular option to file claims online can be a problem in a state where 43% of rural areas lack broadband coverage.

“You have technological hurdles galore,” Forberger said, which increases the risk of mistakes that lead to denials.

Call centers ‘doomed from the start’

Wisconsin spent at least $21.2 million through September on contracts to expand DWD call centers and hire staff for claim adjudication and processing. The unemployment insurance division also spent nearly $1.2 million in employee overtime, 10-times levels spent in 2019.

DWD initially assigned experts to answer emails and social media questions, Jedd said. An online chatbot and Frequently Asked Questions posting eventually answered most general questions. Over time, however, email and social media inquiries largely came to involve individual cases, Jedd said, requiring staff to call claimants — and verify identities — before answering their questions over email.

Residents overwhelmed DWD phone lines with 41.1 million calls from mid-March through June. The department answered just one out of every 200 of those calls, according to a Legislative Audit Bureau report released in September.

The call centers were “doomed from the start,” Forberger said.

“If the whole focus is online claims only, and you’ve made this system incredibly complicated and impossible to use, then of course — people are gonna start calling up, because they don’t understand.”

In a letter responding to the audit, DWD Deputy Secretary Robert Cherry, Jr. wrote that wait times and the rate of unsuccessful calls began to plummet in July as the agency added onto call centers.

“After updating our systems and onboarding the additional call center vendor staff, almost all calls have been answered on a daily basis,” Jedd wrote in an email.

DWD through September spent more than $14.6 million on call center staff from two outside firms.

Nearly $12.6 million went to the global firm Alorica, which in 2019 shuttered a Green Bay call center and laid off 157 workers while shifting positions overseas. Alorica began answering calls in May but was not fully staffed until July 19, according to the Legislative Audit Bureau.

Some jobless residents questioned the effectiveness of call centers even when calls reach an operator.

Callers might get a useful answer, said Chenon Times-Rainwater, a 41-year-old small business owner in West Bend, Wisconsin, who waited two months on her claim. “Or you would call, and you would get transferred and transferred and transferred. And it would be a three-hour situation.”

In September, Evers asked Frostman to resign as secretary.

In search of solutions

A group of Democrats released legislation in July to overhaul the state’s unemployment system. The bills would: reverse a ban on benefits for people on federal disability who lose part-time work; permanently eliminate a one-week benefits waiting period; ease work search requirements; and repeal a Walker-era law that eliminated benefits for workers dismissed for “substantial fault” — a violation less serious than misconduct on the job.

Sen. Chris Larson, D-Milwaukee, expects lawmakers will formally introduce the legislation in January when lawmakers return to Madison.