- Associated Press - Saturday, November 21, 2020

MADISON, Wis. (AP) - As Wisconsin businesses shuttered this spring to slow the spread of COVID-19, jobless filings and phone calls flooded the Department of Workforce Development - too quickly for staffers to keep up. But DWD Secretary Caleb Frostman remained optimistic.

In a May 4 email, Frostman told 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 Democratic Gov. Tony Evers has ousted Frostman. Families are still waiting on jobless claims filed last spring, with many missing bill payments or worse.

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The nonprofit news outlet Wisconsin Watch provided this article to The Associated Press through a collaboration with Institute for Nonprofit News.

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Among those waiting: 50-year-old Karrie Suhr, who worked at a public pool in Cedarburg and expected to work at Milwaukee’s Summerfest before the pandemic hit. She filed her claim in June and has yet to receive benefits. During that limbo she learned her cancer had returned.

“I had to borrow money from my family just to pay my own health insurance to make sure that I was covered for all these cancer treatments,” Suhr said. “So that’s been very emotional.”

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

Ben Jedd, a DWD spokesman, noted that 7.7 million weekly claims flooded the department since March 15 - compared to 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 poorer 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.”

The pandemic struck after Wisconsin and other states toughened rules for accessing unemployment benefits - in the name of reducing fraud - and failed to upgrade antiquated computer systems.

Just 32% of unemployed Wisconsin workers accessed benefits in 2016, down from 50% in 2007, according to a 2017 National Employment Law Project study. Nationally, the rate of covered unemployed workers fell from 36% to 27%.

“The systems in various states were at best neglected and at worst sabotaged,” said Michele Evermore, senior policy analyst with the nonprofit.

Beginning in 2011, the Legislature under then-Gov. Scott Walker, a Republican, enacted a series of laws that: created a one-week waiting period for benefits (temporarily waived during the pandemic), increased work search requirements for recipients, disqualified people on federal disability from accessing unemployment compensation and increased 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.

Also behind the backlog: DWD’s 1970s-era technology, a vulnerability that lawmakers in both parties have long understood but never fixed.

DWD planned to overhaul its computer system more than a decade ago, but Democratic Gov. Jim Doyle’s administration pulled the plug in 2007 as the project fell behind schedule and over its $24 million budget.

The department’s IT system requires sequential programming, meaning that new benefits programs - such as those adopted by Congress during the pandemic - must be programmed one at a time, delaying processing.

DWD reached out to at least five companies in 2019 to demonstrate replacement software. Cost estimates ranged in the “tens of millions of dollars,” Jedd said, and DWD was exploring a funding strategy when the pandemic halted its progress.

Rep. John Nygren, R-Marinette and co-chair of the Joint Committee on Finance, has criticized Evers’ DWD for not formally seeking funding to upgrade the system in its most recent budget request.

While the department did not specifically make such a request, Frostman, in a Sept. 15 letter accompanying the budget request, vowed to work with Evers on funding.

Speaking to reporters in late-September, Evers said DWD was still evaluating an upgrade plan.

Meanwhile, DWD’s shift to online-only claims filings have created headaches for 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 focus 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.

Wisconsin spent at least $21.2 million through September on contracts to expand DWD call centers and 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 involved 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 rate of unsuccessful calls began to plummet in July as the agency expanded call center capacity.

“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.”

DWD through July added a total of 681 call center workers, including new hires and shifts between departments and divisions, records show. The department added a smaller number of adjudicators and claims processors (525) who could work through glitches.

Said Times-Rainwater: “It tells me that they spent a lot of money for no progress.”

Evers in mid-September asked Frostman to resign as secretary.

“It is unacceptable that Wisconsinites continue to wait for the support they need during these challenging times,” he said, blaming Republicans for making it “harder for folks to get these benefits.”

Department of Corrections Deputy Secretary Amy Pechacek has assumed Frostman’s role until a new secretary is appointed.

A group of Democrats in July unveiled legislation 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.

The Republican-controlled Legislature has drawn criticism for doing little to address the claims crisis - or the pandemic. It has not passed a bill since April 15, making it the least-active full-time legislative body in the country, according to a WisPolitics.com analysis.

Nygren has unsuccessfully called on Evers to use $40 million in federal pandemic stimulus funds to offer low-interest, forgivable loans to people waiting on benefits.

The program would serve only a fraction of those with 93,000 claims still pending or in adjudication, according to a Legislative Fiscal Bureau memo. About 10,800 people could get loans of roughly $3,700, for example.

As residents await any fixes to Wisconsin’s unemployment insurance woes, Forberger said DWD should follow states such as Massachusetts, which in March began holding virtual town halls to explain the bureaucracy.

In Cedarburg, Suhr now has some income trickling in after starting part-time work at a school this fall. But it’s not enough to pay her medical bills as she continues her wait. She expects more folks to feel similar frustration in the coming months.

“COVID is getting worse, and I feel like more and more people are going to probably be applying for unemployment,” she said.

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