Report: Wisconsin unable to handle coronavirus unemployment crush

(The Center Square) – Wisconsin quickly fell behind in last year’s unemployment crush, and a new report says the state never recovered.

The Center for Research on the Wisconsin Economy, led by UW-Madison economist Noah Williams, released a report Monday that details just how bad things have been in the state.

“Only 3-in-10 Wisconsin workers who applied for unemployment insurance over the past year have been paid, and in recent months the rate has dropped to 1-in-8,” the report states. “Further, many of the unemployed workers who were paid endured long delays, with 30% waiting ten weeks or more for payment.”

Williams says Wisconsin was flooded with unemployment claims last April as the coronavirus shutdowns began. Once the state fell behind, Wisconsin never recovered.

“The COVID pandemic led to mass unemployment and an expansion of benefits to aid unemployed workers, but problems in administering benefits severely limited their effectiveness,” Williams said. “Wisconsin in particular was unable to handle the volume of claims, leading to a decline in payment rates, a vast increase in delayed payments and a deterioration in ensuring accurate payments were made.”

While all states were late in processing claims, Williams’ report says Wisconsin was far later.

“From July through November more than 20% of all first payments nationwide were delayed more than 70 days. The problem was even more severe in Wisconsin, where in the month of July 2020, nearly 50% of first payments to unemployed workers in Wisconsin had been delayed more than 70 days, the highest share in the nation,” the report states.

And it’s not just late payments. CROWE’s report details just how bad Wisconsin has been at overpayment, and payments to fraudsters.

“The national [overpayment] average over this period was 6.4%, while Wisconsin’s rate was 26.6%, second only to South Dakota at 27.4%. Those two states are outliers, with all other states at 20% or less,” the report states.

“Over the past year, there have been increasing reports of fraudulent unemployment claims and identity theft. The Department of Labor Inspector General estimated that 10% of federal unemployment insurance payments since March of 2020 were improper largely due to fraud,” the report notes.

The report says Wisconsin’s unemployment “system has largely stopped detecting [fraud].”

Gov. Tony Evers has promised an overhaul of the state’s unemployment system, including a $90 million, years-long upgrade of the computer system at the Department of Workforce Develop.

Williams and CROWE are suggesting something different.

“Given the continued poor performance of the state system, more dramatic measures should be considered. The state made notable improvements once it contracted with Google to help work through the backlog of cases” the report states. “The state should consider outsourcing its unemployment services management to a private provider on a permanent basis.”

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