Jon Margolis is a VTDigger political columnist.
Vermont hasn’t done all that badly with this Covid-19 business. Falling infection rates. Compliance (mostly) with the stay-home/social distancing orders and face mask advice. Almost none of the know-nothing “liberation” protests.
But, oh that unemployment insurance mess: hundreds not getting their benefits, others getting the wrong amount, some getting benefits for a while and then getting cut off. Long waits on hold on the phone or no replies to online applications.
“The continuing delays and mistakes made by (the Vermont Department of labor) are now inexcusable,” said David Van Deusen (via email), the president of the Vermont AFL-CIO, “and the Commissioner and Governor need to be held accountable.”
Holding officials accountable when it comes to their treatment of working people is part of Van Deusen’s job, and how much personal responsibility Gov. Phil Scott and Labor Commissioner Michael Harrington have for the system’s shortcomings is open to debate.
Not everything is. When it comes to unemployment insurance, there are some facts. One is that the unemployment insurance system has been underfunded for decades, making it something of a surprise that it works at all.
Another is that it does work. It is working right now. Imperfectly. Often plagued by negligence or blundering by officials. But effectively. This worst economic downturn since the Great Depression would be far worse were it not for unemployment benefits, which pumped more than $48 billion into the economy last month, according to a study by the Hamilton Project.
For all its flaws, despite all the (often justified) complaints from Vermonters and others about clunky systems and unresponsive officials, unemployment compensation offset “just over half of the (estimated) private wage and salary loss” last month, the study found.
That’s a big difference. And it will be even bigger in May, as more states improve their systems (as Vermont has, if not enough) and now that almost all states are adding the Pandemic Unemployment Assistance (PUA), which sent benefits to more people and added a $600 per week payment.
Another fact is that whatever its flaws, Vermont’s unemployment compensation system is working better than its counterparts in most of the other 49 states.
“Vermont is one of the best states in the nation to get an unemployment check. In terms of processing,” said Michele Evermore, the senior researcher of the National Employment Law Project, “it’s well above average in getting benefits out the door.”
She said Vermont’s benefits (maximum of $513 a week, the 18th highest) are “about average,” and its “recipiency rate is about where it should be.”
The word “recipiency” is not in most dictionaries. It is labor economics jargon for the percentage of unemployed people who get unemployment insurance benefits. Vermont’s recipiency rate at the end of last year was 48.9%, according to the U.S. Labor Department, the third highest in the country. Evermore said that during the pandemic Vermont’s recipiency rate has been 44%.
As if to make things even more confusing, labor economists use another measurement – the “insured employment rate” – to analyze the unemployment insurance system and to estimate how it is working in each state. Where the recipiency rate is the percentage of the unemployed who are receiving benefits, the insured employment rate is the percentage of the entire labor force getting benefits.
Here again, according to the latest figures available (for the week ending April 25), Vermont has a high rate – 20%, the seventh highest in the country.
Bad as it is, the economic collapse in Vermont is not as dire as it is elsewhere. As of May 9, according to government data compiled by the Economic Policy Institute, 63,607 people, 19% of Vermont’s labor force, had filed for unemployment benefits in the previous nine weeks. That was a 356% increase over the “pre-virus period.”
A huge percentage increase. But not compared to the rates of increase in neighboring Massachusetts (634%), New York (987%) or New Hampshire (1,582%). In fact, Vermont had the lowest percentage increase in unemployment of all 50 states. Georgia (4,409%) was highest.
Both nationally and in Vermont, the unprecedented sudden surge in unemployment was certain to overwhelm the systems designed to deal with joblessness. In no state were there nearly enough people, telephone lines, or online capacity to handle the flood of applicants.
The unemployment statistics are all estimates, and most experts think the actual number of unemployed is even higher than the official count of 33 million new jobless in March and April. Another study by the Environmental Policy Institute found that some 12 million more people “could have filed for benefits had the process been easier.”
Evermore said such underestimations were more likely in states like Florida, where the process of applying for benefits has long been cumbersome. Vermont’s “official” count is more likely to be closer to the number who are actually out of work.
That’s little comfort to the unemployed who have gotten neither a benefit nor a response from the state Department of Labor. Nor would it be much comfort to learn that they’d likely be worse off in another state.
But the data indicates that they are, or at least that there would be more of them.
Some of these people have little or no money in the bank. With neither income nor unemployment benefits, many of them find themselves destitute, as is proven by the thousands lining up for free meals at food distribution events.
But it’s important to remember that unemployment insurance is not designed just for the individual beneficiaries and their families. By giving all those beneficiaries enough money to keep buying stuff, it benefits everybody. To the extent that it has not responded to some of those individuals, it is a failure. But by propping up the economy, it is doing its job.
Unemployment insurance is easy (and sometimes fun) to disparage. It could be better managed. But especially in Vermont, it gets the job done.
