Article
November 10, 2020

How Bureaucratic Failure Takes a Toll on American Workers

by: Julia Pollak, Labor Economist, ZipRecruiter

An Unemployment Insurance Disaster

In the weeks following the President’s coronavirus national emergency declaration, fewer than one in a hundred calls to state unemployment insurance call centers in Wisconsin were answered, according to a recent audit. In California, the situation was even more dire. A recent assessment determined that no more than one in a thousand callers got through in the Golden State.

More than half of the states’ unemployment insurance websites crashed in the early days of the crisis. Some were dysfunctional for weeks. According to media reports, Florida’s outdated CONNECT unemployment insurance system (which Florida Governor Ron DeSantis himself described as a “jalopy”) was plagued with problems. In many states, the newly jobless had to wait months to receive state benefits for which they had paid through taxes on employers and wages, or supplemental emergency benefits which Congress had authorized. CNBC reports that after two months, some states still haven’t paid the $300 unemployment insurance boost created as part of an executive measure.

The Broader Problem of Low Bureaucratic Quality

Frustrated man on phone
The U.S. GAO has long warned of aging legacy systems that create delays, lead to errors, and present information security risks.

Perhaps state governments can be forgiven for finding themselves flatfooted in the face of a once-in-100-year crisis. But in many cases, the problems with state unemployment systems pre-date the pandemic. Before the novel coronavirus struck, Illinois’s unemployment insurance agency was struggling with severe staffing shortages, numerous audits had flagged problems with Florida’s unemployment system, and 28% of callers to Michigan’s unemployment call centers were on hold for so long, even in normal times, that they gave up before reaching a representative.

Of course, low bureaucratic quality and outdated information technology infrastructure are not confined to state unemployment systems. Government Accountability Office reports have long warned of aging legacy systems in the Defense Department, Internal Revenue Service, Social Security Administration, State Department and elsewhere, that create delays, lead to errors, and present information security risks.

Closer to home, we’ve all seen the images of long lines at early voting sites this year and in past elections—or we’ve stood in those lines ourselves. We all remember the embarrassing launch of Healthcare.gov in 2013. And if we’ve set foot in a Social Security Field Office recently, it will come as no surprise that 4 million Americans waited over an hour in lines at such offices in 2019.

It is faster to register a new business in 21 other countries than it is in the U.S., including New Zealand, Canada, Australia, Denmark, the Netherlands, Singapore, and the United Arab Emirates. Many business owners and occupational license holders and home builders will tell you that doing things the right way in America involves a great deal more bureaucracy than they expected—much of it grindingly slow and unnecessarily onerous.

It is faster to register a new business in 21 other countries than it is in the U.S.

 

We save the best treatment of all for our guests. Back in 2014, when I sponsored my mother’s green card, I was shocked to discover that average processing times exceeded 15 months. Since then, the situation has only grown worse. Many foreign workers in the country legally who have already been approved for a green card know it could be decades before they actually receive it.

Low Government Effectiveness Hurts Low-Income Americans and Small Businesses Most

Lengthy lines, waits, and backlogs at government agencies don’t merely cause frustration. They can impose enormous costs—and even drive some people to desperation. Especially in poorer communities, many people don’t have the cash on hand to survive lengthy delays or the privilege of being able to receive financial help from family. So delayed assistance can lead to spiraling fees, fines, and penalties, and a cascade of costly decisions. They can also reduce trust in government, which in turn reduces the effectiveness of government policy responses. One key recent example of this is widespread unwillingness to cooperate with government coronavirus contract tracing efforts.

Low-income Americans are particularly vulnerable because they often cannot afford the private alternatives to deficient public services—like private home security companies, private schools, and private healthcare providers. And small businesses often lack the means to hire law firms or bankroll lobbying efforts.

A Silver Lining Amidst the Crisis

Female dispatcher
We are seeing some states and agencies adopt digital technologies which have improved the overall effectiveness and resilience of government.

The story is not all doom and gloom. Some states and agencies have adopted digital technologies in recent years which have improved the overall effectiveness of government and made them resilient in the current emergency. For example, 911 response

times are getting faster thanks to the adoption of new software tools and integration of data across agencies. Those improvements no doubt saved lives when COVID-19 outbreaks sent demand for ambulances soaring.

States, like Minnesota, that invested in state-of-the-art unemployment insurance infrastructure before the crisis were able to send out a steady stream of payments and keep newly unemployed workers, their landlords, and the businesses they patronize afloat. Mississippi, Rhode Island, Maine and Connecticut modernized their unemployment systems in 2017 and rolled out a streamlined solution in the cloud. North Carolina and New York also switched to newer cloud systems, which were easier and faster to adapt and scale when the pandemic struck.

Let’s hope that by exposing instances of extremely low bureaucratic quality in our social safety net will accelerate reform and modernization efforts.

 

The present crisis may accelerate the adoption of best practices. There’s nothing like an embarrassing failure draw the appropriate level of scrutiny and force a change. The 2014 waiting times scandal at the Veterans Administration, for example, led to increased oversight and resulted in reforms that have improved various measures of service quality. Mississippi officials say the impetus for that state’s unemployment system upgrade was Hurricane Katrina, which pushed the state to overhaul a large number of legacy systems, with the help of federal grants.

Let’s hope that by exposing many instances of extremely low bureaucratic quality in our social safety net programs, the pandemic will lead us to accelerate long overdue reform and modernization efforts. The result could be a better response to employment shocks for decades to come.

Rebuilding Stronger Systems After the Crisis

Some of the nation’s best and brightest policy researchers have developed practical, feasible recommendations for doing just that. The National Employment Law Project (NELP), for example, has sketched out a possible roadmap for repairing unemployment systems. Some of the technology upgrades they recommend states undertake urgently include fairly basic user experience improvements that are standard across the private sector:

  • Mobile-responsive unemployment insurance websites and applications
  • 24-7 access to online and mobile services
  • The ability to email supporting documents or upload them by phone (instead of the requirement, in some states, to send them by fax!)
  • Updated password reset protocols
  • The ability to go back and fix errors in applications
  • The ability to save partial applications and complete them later
  • Websites and applications translated into Spanish and other common languages
  • Callback systems and online chatbots that answer common questions

NELP also has some larger recommendations for the federal Department of Labor (DOL), including funding for the state’s modernization efforts, tied to stringent accountability standards; investment in DOL’s IT expertise; and the creation of a federal task force to evaluate the performance of federally funded programs, create robust standards and metrics, disseminate best practices, and help states band together to achieve these goals efficiently at scale.

One final word of warning: the government should be wary of handing over too much power to the robots without also investing in talent and training. Automated decision-making often fails in a crisis when the circumstances are new and changing. Modernization is an ongoing process, so highly trained staff, at headquarters and in call centers alike, will be indispensable to any successful and durable modernization effort.

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