California failed at processing unemployment claims. The good news is there is an effort to fix the system.
Sara Rubin here, still at the edge of my seat about the economic prospects of recovery as Covid-19 surges again. When the economy came to a screeching halt last year as Covid-19 became a global pandemic, unemployment skyrocketed. We thought, or at least hoped, that it would be a short-lived shutdown while the virus came under control. Now that we’re in a surge, I worry about what’s next, especially in a system that’s still struggling to catch up.
I was certainly wrong about the duration of the pandemic and the lasting damage it would do to our economy. But when I think back to the uncertainties of those early days, there was one thing that we were right about: California’s Employment Development Department (EDD) was woefully unprepared to handle an influx of unemployment claims. I heard horror stories from friends and from Weekly readers, who shared a litany of complaints.
“I waited 13 weeks to be paid,” one reader wrote.
“Don’t get me started! Filed in APRIL! Still haven’t heard anything. Everything has been ‘pending’ since May,” one shared in July.
“18 weeks pending,” wrote another. “No emails, texts or mail from EDD at all. Basically it's a shitshow and people are suffering. EDD doesn't care.”
Our representatives in Sacramento also heard the horror stories, and a lot of them. They took action—with staff taking on extensive caseworker roles to help people get through the EDD system. And while yes, the staff for our representatives in the Capitol are supposed to help us solve problems with state agencies, ideally the troubleshooting should be resolved for difficult-to-process cases, not run-of-the-mill claims.
In an effort to speed up processing unemployment claims, EDD did away with some of its usual gatekeeping rules. That led to a different problem thanks to EDD’s new, more lenient stance—widespread fraud, largely among jail and prison inmates, collecting what could be $20 million in fraudulent unemployment claims. Meanwhile, many legitimately unemployed people still struggled to get their checks.
The disastrous EDD situation prompted California State Auditor Elaine Howle to do a deep dive. Her report, titled “EDD's Poor Planning and Ineffective Management Left It Unprepared to Assist Californians Unemployed by Covid-19 Shutdowns,” was released Jan. 26 and illuminated a long list of flaws in the agency’s preparedness.
In fairness, nobody was prepared for the Covid-19 pandemic. But EDD’s lack of preparedness struck just about everybody as unacceptable. The notion that a sudden recession could lead to a spike in claims is not a crazy one, and it’s not specific to a pandemic.
State Sen. John Laird, D-Santa Cruz, decided to take the findings of the audit a step further. Given that the auditor can’t actually require an agency to change its ways, simply illuminate the flaws, he wanted a legislative fix for the inevitable next time. When I met with Laird via Zoom a few months ago, his bill, SB 390, was brand new. Now, it’s hopefully on the brink of passage (the Legislature has until Sept. 10).
SB 390 would require EDD to put into place certain practices meant to address the auditor’s findings—things like plans to staff up quickly and meet technology needs, in the event of a next time. Because, as Weekly Senior Correspondent Mary Duan writes in the cover story of this week’s print edition, “of course there will be a next time.”
Duan’s cover story is a close look at some of the failings of the EDD during peak unemployment, including horror stories from people trying to get their checks, and stories of fraudulent schemes. But there’s a hopeful note: It’s ultimately about a lawmaker looking at a massive problem and trying to fix it. Here’s hoping he succeeds.
-Sara Rubin, editor, firstname.lastname@example.org