Unemployment Relief May Be Hard to Come by for Some Kentuckians
The coronavirus has catapulted the number of unemployment claims in the United States to the highest numbers in recorded history. Unfortunately, Kentucky is no exception. The most recent data available indicates that for the week of April 18, 2020 there were 103,548 new unemployment filings in Kentucky, almost 4 times more than at the peak of recession (25,057).
The Tax Foundation created an interactive chart for each state comparing new and continued unemployment claims to the average weekly claims from the 2008 recession. Kentucky has experienced over 100,000 new unemployment claims each week of April, but data on continued claims shows that Kentucky has only been able to accommodate a fraction of that number. The unemployment numbers are truly unprecedented. We are embarking upon uncharted territory, and how Kentucky handles unemployment claims during this crisis will have a lasting impact on our economy for years.
Even before the new strain on unemployment from the coronavirus, Kentucky was one of the worst states for timely unemployment payments. By law, unemployment checks should be distributed within 14 to 21 days of processing, but only 74 percent of payments in Kentucky were distributed within that timeframe in the last quarter of 2019. This puts Kentucky in 47th place, followed only by North Carolina, Nebraska, and Virginia. The national average is 87.1 percent, 13 percentage points higher than Kentucky.
The Kentucky Office of Unemployment Insurance (OUI) is overwhelmed to say the least. Prior to the pandemic, OUI had 12 employees tasked with answering around 1,000 calls a day. Now, the agency receives over 25,000 calls a day. In an update to Kentuckians on April 20th, Lieutenant Governor Jacqueline Coleman explained that since March 8th of this year, there have been twice as many unemployment filings than in all of 2018. Roughly, 13,000 new unemployment claims are filed each day in Kentucky. Over 20 staffers from three different Cabinets and the Governor’s Office are helping to address these problems. Other notable data points from the Governor’s press release include:
15 people addressing the backlog of unpaid claims
250 people working on adjudication, appeals, e-claims, etc.
Total number of claims since March 16th are over 550,000
Total amount paid to Kentuckians since April 5th is approaching $1 billion
Week of March 12: 306,267
Week of March 19: 293,231
Governor Beshear has assured the public that more people have been hired and are training to tackle this influx of claims, but many Kentuckians have grown frustrated with the delay. As a result of the shut down, many new jobs are now eligible for unemployment benefits–including independent contractors such has uber and lyft drivers, substitute teachers, and those that are self-employed. This has contributed significantly to overwhelming an already dated unemployment system.
Research by Kentucky Center for Investigative Reporting found that Kentucky’s unemployment services, or Kentucky’s Electronic Workplace for Employment Services (KEWES), was implemented in 2000 but is run on software developed in the 1970s. Legislators tried to modernize the system in 2018, but these updates are costly and very few states have successfully updated their systems. The latest request for proposals to modernize the system was released on March 6th, the same day the Governor issued a state of emergency. It is unlikely that updates to the system will provide much relief to our current state of affairs, but the Governor assures Kentuckians that if they are eligible, they will eventually get the unemployment relief they are depending on.
More than 550,000 Kentuckians have filed for unemployment over the past two months, a staggering 19 percent of the state’s labor force, according to recent analysis by NBC. According to the analysis, Kentucky has the 6th highest percentage of workforce unemployed. As a state that has been particularly hit by a decline in the coal industry, many market experts are unsure how Kentucky will recover—especially in rural areas like Appalachia.
As far as what to do next, Lt. Governor Jacqueline Coleman asks residents not to reapply or file a new claim if one has already been submitted. She said that addressing the Kentuckians who have waited longer than two weeks for their first payment is her first priority, as well as increasing the capacity of the unemployment office and call centers. In such an uncertain time for Kentuckians, the general consensus from state leadership seems to be “hold on.” Kentuckians should be uneasy that the only program in place to address their needs as a result of this shut down is struggling to handle the situation at hand.
As of April 28th, 37,000 unemployment claims filed in March still had not been resolved.