Reflecting on A Year of Helping States Get Unemployment Insurance to People in Need

By Alyssa Levitz, Raylene Yung, Robin Carnahan, Waldo Jaquith

One year ago, an unprecedented wave of layoffs and furloughs left millions of Americans unemployed as the COVID-19 pandemic overtook the U.S. Since then, approximately 40 million people have received unemployment insurance benefits, and many more have applied.

This surge in need, and in applications, raised many big questions:

• Why were most states’ unemployment insurance (UI) systems so overwhelmed, so quickly?
• What did governments need in order to deliver benefits to their eligible residents “at the speed of need?”
• And what should be done in this moment to make sure that UI systems and staff are prepared to meet the next crisis when it arrives?

These were not theoretical questions to us. When Alyssa was unemployed in 2020 prior to working at USDR, it took her weeks to figure out which benefits she was eligible for. And she was one of the lucky ones. Alyssa had time to navigate the system and had savings to cover housing and food.

At U.S. Digital Response, we have partnered with nine states, and counting, to support their unemployment assistance programs. We have witnessed how much a state’s approach to these claims critically impacts the lives of our families and neighbors, and a state’s ability to recover. We have watched our government partners be exceptionally creative with the resources they have, even as they are at times stymied by the inflexible systems in place. We believe we can use this time to reset and rebuild.

This post reflects back on the work we’ve done at USDR this past year and makes four key recommendations for our government partners as they rebuild for the future. Getting unemployment insurance right matters. Today, many people have hit or are approaching their one-year mark of receiving UI benefits, and they, alongside their states, will receive new support in the form of the third federal stimulus package. But without immediate action, the underlying problems that have long plagued UI systems will continue to exist.

What Happened: A Flashback to Spring 2020

During past recessions, UI systems were able to meet demand because a comparatively small number of people were laid off over longer periods of time. In 2020, millions of people lost their jobs in the span of a few weeks, creating a huge backlog of claims and putting stress on states’ aging technology. In addition, states had to quickly figure out how to implement brand new benefits programs, like Pandemic Unemployment Assistance (PUA).

To make things even more challenging, most UI claims had to be handled virtually or by phone due to stay-at-home orders. UI systems were built with the assumption that agency employees could help applicants in person. When those employees were unavailable, many laid-off Americans were unable to claim the UI benefits they were owed, because they weren’t able to complete their applications online without additional intervention.

Source: U.S. Bureau of Labor Statistics

For one of our first state partners, we dove deeply into their systems to identify the root causes of their backlogs, which you can read about in this case study. Our investigations found that most problems and delays applicants and state staff face can be traced back to the following three root causes:

1. The process for eligibility determination is hard, slow, and unreliable.
2. Systems are mainframe-centric, not applicant-centric.
3. Humans power the system: too many steps that could be automated still require manual intervention.

Using these findings, we set out to support states in addressing these challenges across the country.

USDR and Partners Begin Connecting the Dots Across State UI Systems

We founded U.S. Digital Response as just that: a responsive organization. And while we understood there were many underlying issues impacting unemployment insurance, we needed to respond to our partners’ biggest priorities:

1. Spring 2020: Figure out how to implement the new unemployment programs instituted and funded by the CARES Act, and understand and begin to address the causes of backlogs
2. Summer and Fall 2020: Address backlogs with surge support and continue to implement new benefits programs
3. Winter and Spring 2020–2021: Implement two new stimulus bills, and plan for one-year benefits extension or reduction
4. Spring 2021 and beyond: Make longer-term decisions about how to rebuild or modernize UI systems and processes

Our first project began in March 2020, when we partnered with several states on thinking through their approach to implementing the new Pandemic Unemployment Assistance program.

In just a few days, a group of USDR volunteers developed PAPUA (Pilot Application for Pandemic Unemployment Assistance), a prototype of a streamlined intake form that simplifies the process for applicants and makes it more efficient for states. Since then, we have engaged with additional states and developed relationships with countless government leaders and NGOs. Our work with our partners has included:

• Building sample PUA applications for multiple states
• Creating an online screener so workers in New Jersey could understand their rights and what benefits they are eligible for
• Helping states understand user flows so they can address backlogs and pain points
• Advising states like Wisconsin on rebuilding their UI programs for the future

Our goal was, and remains, to collaboratively solve problems, get benefits to people in need more efficiently and equitably, and set these systems up to deliver successfully in the future.

In the fall, we formalized USDR’s UI program and began to grow. Reshma Khilnani, Alyssa Levitz, Robin Carnahan, Waldo Jaquith, and Janette Fong have led the program’s efforts, and teams of volunteers have scrubbed in on state requests.

Today, USDR’s dedicated UI program continues to work with state workforce agencies to troubleshoot challenges, expand capacity based on policy changes, and improve the user experience, so they can get the right people the right benefits — faster. These agencies’ employees have been working 60-hour weeks for the past year, operating at the very edge of their capacities, and our task has been to help them in whatever ways that we are able.

We do this work joined not only by our government partners, but also by an extraordinary group of collaborators from across the public, private, and civil society sectors. From researchers, to engineers, to policymakers, staff and volunteers, we’ve seen so many step up in this moment to recognize this as the crisis it is.

What We Must Do Right Now

While each state is unique, the pandemic has laid bare common underlying issues, and USDR is in a unique position to be able to draw patterns across our patchwork of state-run systems. As we reflect on the past year, the following are key learnings we are sharing with states and the federal government to ensure our country is better prepared to deliver unemployment benefits in the future.

Solve Incremental Problems Now, Don’t Wait to Completely Rebuild

Feelings around UI systems over the past year include stress, anxiety and frustration, among both claimants and administrators. Every state we have worked with is overwhelmed by backlogs of claims, concerns about fraud, and outdated technology, which makes pinpointing problems and potential solutions feel like playing a game of whack-a-mole. It is tempting to believe that one big overhaul of the system can solve all of these challenges at once, if we can wait a few years.

But we’ve also witnessed feelings of purpose and dedication, and the desire to make effective changes in months, not years. We can do a lot of good with the tools at hand right now, and systems are best modernized in iterative, incremental steps.

When we begin working with a state, our team digs into our partner’s technology, as well as each user’s journey (claimant, agency and employer), to isolate discrete problems that can be fixed now, rather than waiting to entirely rebuild their UI systems. In several states, we analyzed the entire UI claim process, to identify the biggest contributors to the claims backlog, so we could focus on those highest-impact areas for immediate improvement.

Many state UI technical systems are built on aging foundations and need to be thoughtfully and incrementally updated to meet modern user needs. To meet those needs, USDR can help UI teams use human-centered design to identify and isolate problems, address specific pain points, and significantly reduce the challenge of managing backlogs.

Use Technology to Enable State Employees to Make the Biggest Impact

The dramatic spike in UI claims starting in March 2020 created massive backlogs in many states’ systems, and overwhelmed agency employees who did their best to work through them.

While technology cannot solve everything, it can do a tremendous amount to automate manual and repetitive tasks, freeing up employees to focus on tasks that cannot be automated. One of the most common services that USDR, as a non-conflicted organization, has provided to states is vendor evaluations — helping them select technologies and shape system improvements that increase scale and reduce backlogs. For example, we helped states choose the right partners to create chatbots and online appointment schedulers, freeing up customer service employees to focus on areas where they could make the biggest impact.

USDR has also helped states adopt new identity verification technology. At the beginning of the pandemic, one of the primary reasons unemployment benefits were delayed was because without an in-person appointment, people had no way to prove their identities. Labor agencies fell back on replicating in-person processes over the phone, which took an average of 20 minutes per applicant. But new technology automated that once time-consuming identity verification process, again, freeing up staff to focus on resolving more complicated issues with claims.

Next Up: After Today’s Fires Are Out, Change the Status Quo

While we’ve focused on helping our partners put out today’s fires, we are also working together to make UI systems better prepared for the future. Many of the problems UI systems faced in 2020 were the same ones they faced in 2008, just larger in scale. To ensure we do not find ourselves back here again, we need a macro shift in how unemployment insurance works across states. The status quo is not working for unemployed people, or those who are working so hard to get them the benefits they need.

“Insource” the Mission

Without intending to, many state UI systems are outsourcing their missions by hiring a single vendor to run all of their technology, and hoping for the best (while paying a lot of money). This often feels less risky at the moment of contract, but leads to extreme risk in the long-term, as systems fail and in-house teams do not have access to the data or knowledge to fix them.

To take control of their destinies, states need to begin to hire in-house technologists who understand how their systems work, and who care, above all, about the experience of end users. That means agencies should directly employ or leverage in-house engineers, designers, user researchers, writers, etc. — all of the expertise required to provide active and deep oversight of vendors’ work, and to direct that work towards the highest-value needs.

We have worked with inspiring states that are building teams of technical staff who care deeply about the experience of the people using their systems and who want to build technology that works for them. For example, our New Jersey partners anticipated that people would be confused about the array of new unemployment benefit programs and might apply to the wrong one–or even give up–and miss out on money they were due. To help workers find their way to the right programs, we collaborated with them to create a simple online entry flow that guided them to the right application.

We hope to see many other states take this path, and know it will take meaningful team investment to pull it off. We are really excited to be partnering with the state of Wisconsin, which recently announced that it will be working with 18F, an agency within the federal General Services Administration’s Technology Transformation Services to modernize its system.

Change How Unemployment Insurance is Funded

To change the status quo, we must look at how UI administration is funded at both the state and federal level. Currently, UI systems get funding from their state based on their workloads, which is inversely related to the health of the economy. Money floods in during recessions and is tough to get when the economy is flush. But it is during these recovery “down times” that systems can be thoughtfully improved for the long-run.

Federally, Congress and the White House Office of Management and Budget should shift their approach. Rather than providing states with large one-time grants during recessions, which often go towards mission-outsourcing multi-year technology contracts, federal funding could instead be granted incrementally. This would incentivize building systems iteratively, rewarding states that build efficient, user-friendly and equitable systems with additional funding.

Now is the Time

Governments have expanded access to benefits like unemployment insurance for millions of Americans in response to COVID-19, and that expansion has revealed the challenges governments face with their current systems. We have seen our partners from across both sides of the aisle and every section of the country decide to meet the moment by building better systems for their staff and residents. In the next phase of this crisis, and as preparation for the future, they want to be ready.

If you are a state or collaborating agency who could use help with your unemployment insurance systems, or an organization also working to help improve access to these benefits, please reach out by filling out this brief intake form. We have a team ready to assist, and will be in touch within 24 hours.