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State unemployment insurance programs in disrepair, report says

A report released Tuesday by the National Employment Law Project blames chronic underfunding by the federal government for problems with states' unemployment insurance programs that include extensive backlogs and outdated, unreliable systems.

State unemployment insurance programs, which receive federal funding for administrative costs, were put to the test during the Great Recession, NELP said. Before the recession, about 2.5 million people were collecting unemployment benefits but that figure jumped to 10 million at its peak. 

NELP found that state unemployment programs use technologies that are 26 years old on average and that most state systems rely on antiquated programming languages.

These problems have forced laid-off workers "to navigate extensive backlogs, jammed phone lines and often unreliable online claims systems." That defeats the purpose of the unemployment safety net to provide "efficient claim filing and timely eligibility determinations and payments," the report says.

In particular, the report highlights California as a poster child for poor handling of unemployment insurance claims. The state's unemployment insurance phone system barely functions even after the EDD spent $30 million in 2011 to modernize its phone lines.

Roughly 9 in 10 respondents rated the EDD's phone system "poor," according to a July survey by the agency.

Maurice Emsellem, policy co-director at NELP, said the report is an effort to give context to what's occurring with state unemployment insurance programs. He called the problems across the country unprecedented and the result of "federal government neglect."

The report comes a day before the California Assembly is set to hold a hearing on problems that occurred when the California Employment Development Department launched a $110-million upgrade to its jobless benefits system. 

The update was intended to make the lives of California's unemployed easier, allowing for more self-service options online. But the new software had problems reading old claims data and delayed payment to as many as 300,000 claims, according to internal EDD emails. 

State workers have been working overtime to process claims manually. Lawmakers hope to get answers as to what exactly went wrong with the software update. 


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