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Unemployment Claims Crash Multiple State Websites

Economics / Recession 2008 - 2010 Jan 08, 2009 - 09:41 AM GMT

By: Mike_Shedlock

Economics

Best Financial Markets Analysis ArticleAs pink slips mount, so do calls to state unemployment centers. Those calls are pouring in so fast that state unemployment claim systems are overwhelmed .

Electronic unemployment filing systems have crashed in at least three states in recent days amid an unprecedented crush of thousands of newly jobless Americans seeking benefits, and other states were adjusting their systems to avoid being next.


About 4.5 million Americans are collecting jobless benefits, a 26-year high, so the Web sites and phone systems now commonly used to file for benefits are being tested like never before.

Even those that are holding up under the strain are in many cases leaving filers on the line for hours, or kissing them off with an "all circuits are busy" message. Agencies have been scrambling to hire hundreds more workers to handle the calls.

Systems in New York, North Carolina and Ohio were shut down completely by technical glitches and heavy volume, and labor officials in several other states are reporting higher-than-normal use.

New York's phone and Internet claims system started to buckle on Monday afternoon and was out of service completely for the first half of Tuesday while as many as 10,000 people per hour tried to get in, said Leo Rosales, a state Labor Department spokesman.

Callers to Michigan's main phone line handling applications for jobless benefits got an "all circuits are busy now" message Tuesday afternoon. Officials in Michigan, which had the nation's highest jobless rate at 9.6 percent in November, recently began urging applicants to seek benefits through a state Internet site instead. Michigan counted about 473,000 people as unemployed in November, up from about 370,000 a year ago.

Unemployment agencies from Kentucky to Alaska also are reporting long hold times for callers and slowdowns for those filing online because of higher volume. Several states have added staff to their call centers to handle the surge, including Ohio, Oklahoma and Washington.

Pennsylvania has hired temporary workers and expanded the hours of its unemployment benefits hot line to accommodate a surge in the number of calls, going from 600 employees to more than 800. Officials hope to eventually have 1,100 workers answering calls.

New Mexico has extended call-center hours, upgraded the phone system and added 15 workers. Even so, "We still are receiving reports of people's inability to get through," said Carrie Moritomo, a spokeswoman for the state Department of Workforce Solutions.

In Kentucky, where claims rose to 40,400 in November from 23,400 a year earlier, a flood of new filers overwhelmed the state's unemployment Web site and phone lines on Monday, when more than 8,000 people filed initial claims, said Kim Brannock, a spokeswoman for the Kentucky Education Cabinet, which oversees the state unemployment office.

North Carolina Benefits Site Crashes

There are numerous other reports all saying pretty much the same thing. Please consider North Carolina unemployment claims crash website

Unemployment is up so much in North Carolina that the state's Internet site for benefits crashed twice this week under a rush of claims.

Once the system was back up, the state set one-day records both for the amount of unemployment benefits paid and for the number of transactions, officials said Tuesday.

The number of people trying to sign up online for new or continuing benefits was as much as triple pre-recession levels Sunday and Monday, the Employment Security Commission said. That volume, together with a phone line problem, overwhelmed the agency's computers and prevented some people from filing claims.

Michigan Calls Go Unanswered

The Grand Rapids Press is reporting Unemployed in Michigan grow frustrated by long lines for benefits .

Here's a tip: Get to the unemployment office before 3 p.m. After that, the doors are locked and nobody gets in.

Tuesday, it didn't really matter, though. The one-story office building at 3391 Plainfield Ave. NE was crammed with hundreds of jobless people, from the counters to the double-glass doors out into the parking lot.

Just before 3 p.m., you would be the 637th person in line. Soon, another 10 or 20 more people would shove in behind you before the security guard locked the door.

This is the face of unemployment in Michigan.

This is life in a state with the highest jobless rate in the nation, where 449,000 people are out of work.

For those who never have filed for unemployment, the first question is: Why don't these people just pick up the phone or dial up the state's Web site?

Every client who walked out Tuesday told me they tried all that. Day after day, they couldn't get through.

The phone was always busy or hung up on them.

The Web site either crashes or takes an hour and a half to load up a page, said Steve Waybrant, 52, of Wayland, even though he has high-speed Internet service.

Like hundreds of other people this week, he climbed into his car and drove to the Plainfield office.

His wait time: 4 hours and 45 minutes.

Michigan Governor Promises To Fix System

Amidst rising concern from the Governor, Michigan promises to fix unemployment system delays, backlog .

Even as people for the third straight day waited in line four or five hours to resolve unemployment issues, officials Wednesday scrambled to prop up the backlogged state unemployment insurance system.

Gov. Jennifer Granholm is "very concerned" and directing that resources be made available to ease the crunch, spokeswoman Megan Brown said.

Frustrated when days and weeks of telephone calls go unanswered, people are driving from across West Michigan to the problem resolution office on Plainfield Avenue, on the city's north side.

The Press Wednesday called the system 30 times over seven hours and got busy signals 28 times. One call went through early in the day and the caller was on hold seven minutes after that. The other that rang gave a recorded message directing callers to the agency's Web site, then disconnected.

News of the state efforts, particularly adding staffers by February, gave little solace to some of the unemployed waiting in a light snow Wednesday afternoon.

"February? That does no good right now," said Steve Corbitt, 48, of Battle Creek, who had been waiting three hours and figured on at least another hour.

Ohio Jobless Claims Site Crashes

Cleveland.Com is reporting Ohio jobless claims crash state Web site .

Ohio's Internet site to sign up for unemployment benefits crashed today because of high demand.

And on Monday, the phone lines were down, though state officials said there might have been other issues with the phone lines besides high volume.

"There's an unusual amount of claims," said Brian Harter, spokesman for the Ohio Department of Jobs and Family Services which oversees the unemployment benefits. "The same thing is happening in North Carolina."

The continued high demand for jobless benefits has nearly exhausted Ohio's unemployment funds, and in November state officials asked the federal government for $550 million to cover claims over the next few months.

The Ohio Department of Job and Family Services recently got approval for the credit line of $550 million, which will provide enough money for Ohio to make unemployment compensation payments through February.

"We can begin tapping into it once our fund is completely broke," Harter said. "As of Jan. 5, our trust fund balance is $16,182,989.54."

The drop in the fund has been precipitous. In November, when the request was made, the unemployment fund had about $277 million, compared with $571 million at the same time a year ago.

What's Driving The Surge In Claims

For a detailed look at rising unemployment numbers and what's driving this surge in unemployment claims, please see Massive Jobs Contraction In Small and Medium Sized Businesses .

More Aid To The Jobless

As benefits run out, Obama Considers Major Expansion in Aid to Jobless

President-elect Barack Obama and Congressional Democrats are considering major expansions of government-assisted health care insurance and unemployment compensation as they begin intensive work this week on a two-year economic recovery package.

One proposal, as described by Democratic advisers, would extend unemployment compensation to part-time workers, an idea that Congressional Republicans have blocked in the past.

Other policy changes would subsidize employers' expenses for temporarily continuing health insurance coverage to laid-off and retired workers and their dependents, as mandated under a 22-year-old federal law known as Cobra, and allow workers who lose jobs that did not come with insurance benefits to be eligible, for the first time, to apply for Medicaid coverage.

Mr. Obama has pledged to “create or save” three million jobs over the next two years. In his address, he omitted the word “save,” suggesting he would create three million jobs, a goal that many economists consider unattainable under current conditions.

His plan, he said in his address, would “put people back to work today and reduce our dependence on foreign oil tomorrow” through spending and tax incentives to double production of renewable energy; make government buildings more energy efficient; build and renovate roads, bridges and schools; and modernize health care technology.

Obama Flunks Math Test

Obama wants to cut taxes by $300 billion, create 3 million jobs, extend unemployment benefits, and otherwise wave a magic wand and spend ourselves to prosperity on a total budget that is now up to $850 billion.

On December 24th, Caroline Baum took a critical look at Obama's then $750 billion plan in Obama's Job-Creation Program Flunks Basic Math .

Obama has been working with his advisers so that the proposed $750-billion-and-counting package of tax breaks and spending on infrastructure, education, health care and unemployment insurance is ready to go on Day One.

There are currently about 10 million unemployed workers in the U.S. (The Bureau of Labor Statistics defines as unemployed those persons who didn't work in the week of the monthly employment survey, were available for work and made an effort to find work in the previous month.)

“If we write a check for $75,000 to each of the unemployed, we won't have anyone ‘unemployed,'” said former Treasury Secretary Paul O'Neill.

O'Neill did the math so you don't have to. Each job “will cost $250,000, which doesn't suggest much labor intensity for the dollars spent,” he said. “It makes me wonder if any of the planners or commentators are good at arithmetic.”

They're not good at arithmetic. And one wonders about their facility with economics.

If putting people to work is the goal, we could get rid of all the heavy earth-moving equipment and go back to digging ditches with shovels.

Why stop there? If it takes one man two days to dig a trench three feet deep and 30 feet long with a shovel, how long would it take 100 men using spoons?

Good Keynesians, such as Princeton University economist Paul Krugman, are worried about finding enough viable, shovel-ready projects. The size of the required stimulus is “so big that it's actually going to be hard to find enough things” to spend it on, Krugman said in an interview with Japan's Asahi Shimbun.

“In this crisis lies an opportunity to create the jobs that America needs, doing the work that America needs,” said Larry Summers, Obama's top economic adviser, at a press conference yesterday.

With all due respect to Dr. Summers, without the proper incentives, government doesn't know what kind of jobs to create.

So why do politicians persist in making the same warmed-over arguments for government spending to create jobs?

“Because even if the arguments are fallacious, they have an enduring appeal,” writes Gregory B. Christainsen, professor of economics at California State University, Hayward, in an essay in “Cliches of Politics.” “The employment at the site of a public works project is visible.”

In other words, everyone can see the roadwork under way and understand the government's role in it.

What is unseen -- remember Frederic Bastiat's “broken window?” -- is the loss in private employment, the jobs that would have been created if the government hadn't taken the spending power away from the private sector. Those losses unfold over a longer period of time, Christainsen says.

It's said, or used to be said, that government's role is to create an environment that encourages private job creation. That used to mean a backdrop of low taxes and light regulation.

With the public clamoring for more stringent rules to prevent a recurrence of the current crisis, it doesn't seem as if a business-friendly backdrop is even on the table.

Maybe that's why the government has to do the private sector's work.

The size of the required stimulus is “so big that it's actually going to be hard to find enough things” to spend it on, Krugman said in an interview with Japan's Asahi Shimbun.

I used to be amazed at such nonsense from Krugman. I have since learned to expect it.

I must say however, that it's refreshing to hear any economist say anything that that makes any sense when it comes to the problems we are facing. Gregory B. Christainsen, professor of economics at California State University, displays a rare amount of common sense at a time when the Fiscal Insanity Virus is rapidly spreading at every college and university campus across the country.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Click Here To Scroll Thru My Recent Post List

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

© 2009 Mike Shedlock, All Rights Reserved

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