New year, same old unemployment system

While Gov. Andy Beshear’s response to COVID-19 has resulted in significant economic harm to many Kentuckians – especially hundreds of thousands of workers unable to get critically needed unemployment dollars after being thrown out of work – the governor’s budget proposal does seek to address some of the underlying issues contributing to the fiasco.

Beshear designates $48 million to upgrade the antiquated computer system and outdated software used to process Kentuckians’ unemployment claims.

The flurry of claims during the Great Recession more than a decade ago laid bare the serious inadequacy of Kentucky’s unemployment system to handle an abrupt rise in applicants like we’ve seen since March as 1.3 million Kentuckians – more than 62% of the commonwealth’s entire workforce – have filed jobless claims.

It’s against this backdrop that Beshear has used his emergency powers to issue countless executives orders since March which have affected our entire economy, putting an abrupt halt to a sizable amount of activity in our business sector.

While many business owners may be able to survive the shutdowns, many of their employees likely will be devastated if not financially ruined.

As if it weren’t enough to abruptly be laid off or let go due to the government's response to the pandemic, the state’s unemployment system was totally overrun as hundreds of thousands of desperate workers applied for jobless benefits.

Hundreds who filed claims at the beginning of this pandemic 10 months ago still haven’t received a check.

It seems that somewhere near 90,000 backed-up claims are clogging the system – although State Auditor Mike Harmon reports the Office of Unemployment Insurance is unable to accurately determine either the number of outstanding claims or financial impact of those backlogged cases.

Why would a governor demand such an abrupt shutdown knowing Kentucky’s unemployment system couldn’t handle the flurry of claims, and certainly not all at once?

If such a shutdown was necessary, why wasn’t it at least done in phases to give the system some opportunity to ensure applications got processed and citizens got the help they needed, especially since the challenges presented by the old and insufficient technology has been well-documented for years?

Why didn’t the governor consult more with all sectors of the economy, including experts in the business, financial and educational – as well as the health – sectors before inserting himself and the force of state government squarely in the midst of Kentucky families’ budgets and livelihoods?

“Where no counsel is, the people fall: but in the multitude of counselors there is safety,” Proverbs 11:14 advises.

Politicians could do worse than giving those families yet to receive their benefits a seat at the state’s budgeting table, because they’ve obviously done a yeoman’s job of living within their meager means and keeping it all together during the government’s suffocating response to the attack of the coronavirus.

The real heroes of Kentucky’s COVID-19 response aren’t found in Frankfort’s political class; they’re the tens of thousands of Kentuckians finding ways to provide for their families even though they haven’t received the unemployment checks owed them for months.

Monika Cook, a Franklin mother, showed WZTV reporter Stacy Case her bank statement which showed 22 cents in her account, and told her she’s literally “having to dilute milk with water to make it last longer” while looking at cut-off notices from utility companies and calling the state Labor Cabinet “every day for two months and no one answers the phone” with no hope of Christmas – even a tree – for her family.

Apparently, having a TV reporter on your side will get someone’s attention.

Finally, the Labor Cabinet sent Case an email saying they had found some dollars for Cook.

I wonder when the state will be letting the other tens of thousands know that they, too, will find something in their accounts.

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com and @bipps on Twitter.

The Bluegrass Beacon is a weekly syndicated newspaper column posted on the Bluegrass Institute’s website after being published by newspapers statewide.