Computers alone won’t fix unemployment system, says labor chief

Lawmakers politely pressed New Jersey’s labor commissioner to address continuing challenges in the state’s unemployment system at a budget hearing Tuesday.

The response of the unemployment system during the pandemic was the dominant recurring theme in the Senate budget committee meeting, but lawmakers said they understood why it was overwhelmed by the colossal surge of unemployment claims – over 1.5 million since March, as many as six months as had been filed in prior three years.

Call centers were added, staffers from other departments were temporarily transferred to help and the volume of claims receded from records to a regular recession, but still 30,000 to 40,000 laid-off workers are in limbo waiting for their unemployment claims to be resolved.

Labor and Workforce Development Commissioner Robert Asaro-Angelo said there are various bureaucratic reasons for those unresolved claims unrelated to any technology shortcomings. He said new computers for the unemployment system would be nice but won’t solve the core issue – a complicated and rigid federal unemployment program.

“Computers can’t cut red tape, which is why in the end full relief will only come with a federal solution,” Asaro-Angelo said.

Asaro-Angelo said the number of inputs and factors to determine eligibility are almost infinite.

“It doesn’t matter how nice a computer system you have,” he said. “In the end, individual claimants’ issues aren’t about technology. They’re about the phalanx of eligibility standards they need to meet to get through. And that’s why it’s so hard to write computer programs for them.”

Asaro-Angelo said the full modernization of the unemployment system may cost at least $200 million over five or six years, though he’s hoping the federal government would pay for it.

Lawmakers were sympathetic, but after a half-year of having their legislative offices flooded by calls from upset constituents, some said that six months into the crisis, other problems such as not calling back residents at promised times still persist.

“And they’ll wait all day by the phone and the call doesn’t happen. That’s a problem,” said Sen. Declan O’Scanlon, R-Monmouth.

In response to a question, Asaro-Angelo said the state is unlikely to reopen state unemployment offices for in-person visits this year because significantly more people can be helped over the phone or through email than in person.

“I know that people feel like they want to be there in person to talk to somebody – ‘Oh, I just need this one problem resolved,’” Asaro-Angelo said. “But in the end that would be slower serving the large group of claimants that we have. I just know that.”

Asaro-Angelo said even before the pandemic, the state had winnowed its number of in-person sites down to 10.

Payroll taxes paid by businesses are based in part on how much money is in the unemployment fund. That could mean a tax hike next summer, as the balance has dropped to a point where the tax will go from the best of six columns to the worst. Almost $4.7 billion in state benefits were issued since March, in addition to about $10 billion in federal benefits.

Asaro-Angelo said New Jersey in late August began borrowing money from the federal government to pay unemployment benefits. As of Sept. 11 it owed $27 million, interest-free through January. Fourteen other states and the Virgin Islands have borrowed almost $30 billion combined.

“We are hopeful that there’s going to be relief for trust funds,” Asaro-Angelo said. “We are not the only state requesting this, clearly. Other states have way bigger problem than we’re going to have.”

Sen. Steve Oroho, R-Sussex, noted Gov. Phil Murphy also wants to make permanent a corporate tax surcharge.

“To the extent that the employment tax goes up on the employer side, that could be a very hefty, significant hit,” Oroho said.

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