(Reuters) – A shocking 16.8 million people filed for U.S. unemployment benefits in the last three weeks as the country shut down to stop the spread of the novel coronavirus, overwhelming state labor departments and creating a large backlog of pending applications.
A month after the virus was declared a pandemic, many newly jobless Americans are still waiting desperately for their unemployment checks.
After going weeks without a paycheck, they are falling behind on their bills and drastically ratcheting back spending. The delays come as other federal stimulus, including a small business lending program, also experience hiccups.
The slow federal response could ultimately make the economic hit from the shutdown worse, economists warn here
Zaborah Roane, 48, a laid off daycare worker from Raleigh, North Carolina, said her application for unemployment benefits was still pending Thursday, about two weeks after she applied.
“Every day you just have to see what that day brings to help you decide what your next move is going to be,” said Roane, who was able to buy groceries with help from the National Domestic Workers Alliance, a nonprofit group raising money for workers affected by the virus.
The North Carolina Department of Commerce says people typically receive payment within 14 days of filing their initial claim.
The $2.3 trillion stimulus act signed March 27 includes a $600 a week across-the-board unemployment payout. Some states have started issuing the benefits, but it could take until May in some states for this money to filter through creaky federal and state bureaucracies into the bank accounts of Americans.
STATE OFFICES REV UP
The unemployment benefits program is administered by states using guidelines set by federal law.
States facing a surge in applications are increasing staff, expanding call center hours and changing their application processes to make it easier for people to file for benefits.
Some states, including Illinois, Michigan, New Hampshire and New York, are asking people to apply on certain days of the week based on their name.
Others, including Maine, have told independent contractors, who are supposed to be eligible for benefits under the stimulus package, that their benefits are not yet available but they are coming.
Jason Suggs, an unemployment claims processor for the state of Maryland, estimates that the state has lost two-thirds of its claims processing staff over the past decade to retirement and attrition.
“The first thing someone says to you when you answer the phone is, ‘I’ve been on hold for four hours,” Suggs said on a conference call organized by public sector employee unions.
Simon Tung, 38, and his wife Christina shut down their two Manhattan macaron bakeries and a cat cafe on March 15 and had to lay off their more than 20 employees.
Some employees have not been able to apply for unemployment benefits, Tung said Thursday, while other employees have received full benefits.
Filing their own claims was an odyssey, Tung said. He first filed for unemployment online on March 22, but was notified he needed to call to submit more information.
He called hundreds of times. When he did get through, sometimes he would get a message saying the system was overwhelmed and to call back. On April 2, he received his first direct deposit from New York state – for $0.
“It got to a point where it went from anxiety to frustration to defeat, and you’re just laughing at everything,” he said.
The New York State Department of Labor launched a streamlined application process Thursday with a “call back” system for people who need to submit additional information.
Other workers faced several weeks of anxiety before securing benefits.
Desiré Nesmith, 24, who was laid off as a substitute teacher and child-care worker in Fort Worth, Texas received a payment last week but was immediately told she needed to send the money back after the department struggled to contact one of her former employers.
It was a frustrating turn after weeks of struggling to have her claims processed online. Nesmith placed about 400 phone calls into the Texas employment office on Tuesday alone, she said, before she received a call in the afternoon letting her know the error was cleared up and her payments were approved.
“I was on the verge of tears,” she said of the relief she felt.
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