Jobless in Colorado: Staying afloat during hard times
After she lost her job, Tamara Ames thought she had done everything right heading to the Internet to file her claim for unemployment benefits and updating her job search every other week, just as she was supposed to.But last week, after her latest payment didnt show up, she found herself on the wrong end of an unemployment benefits system that is being taxed as it never has before. Before she was done, she spent nearly five hours in an effort to get a state worker on the phone so she could figure out the problem.She ultimately discovered that a computer glitch had tripped her up. Not that understanding the problem made her feel better about it.Most people dont have five hours to not look for a job, Ames said.Thats the bad news about Colorados unemployment system, the local battlefront in a cascading national economic calamity. The system, most everyone agrees, is simply under siege. This year, it is expected to face a record number of claims and to pay out a record $500 million to $600 million in benefits.But theres also good news.Reforms instituted a generation ago appear poised to keep the system solvent even as other states see their unemployment programs go broke. And work is under way to improve the departments Web site this spring, which should make it more user-friendly and ease the strain on the phone system.We will likely end up with significant, positive changes in how we do business that will benefit us going forward, out of the economic downturn, said Don Mares, executive director of the Colorado Department of Labor & Employment.Solvency surchargeIn the 1980s, state lawmakers set out to protect the states Unemployment Insurance Trust Fund it is used to pay benefits to people who lose their jobs after watching it go broke in a recession.The result was an additional tax, dubbed a solvency surcharge, that was designed to kick in whenever the trust funds balance fell below 0.9 percent of the wages paid in the state. The calculation is made each year on June 30, and in 2004, after three years of recession, the tax kicked in.The result: Colorados unemployment trust fund grew to $672 million last fall, just as the latest recession was taking hold. That allayed fears that Colorado could again find its unemployment fund out of money.And although unemployment insurance is mandated by federal law, it is up to each state to administer the program.Five states already have seen their trust funds go insolvent, and 14 more including California, New York, Florida and Texas are expected to do the same this year, according to the National Employment Law Project, which tracks unemployment and other worker issues.Colorado is far from that point, said Mike Cullen, Colorados director of unemployment insurance.It would take a deep recession that went on for several years before we would go insolvent, Cullen said.His assertion is backed up by various scenarios that have been considered, including a moderate or even severe recession, said Alex Hall, the departments chief economist.Certainly with all the information we have available at this time, and what we feel are reasonable scenarios, including scenarios that take us into a pretty deep recession, we feel that the surcharge is providing that stability and revenue for the unemployment insurance trust fund, and that solvency will not be an issue for us, Hall said.Strain on the systemEven so, what Colorado is facing is staggering when compared with recent years.In a typical year, for example, the Department of Labor and Employment processes between 115,000 and 120,000 unemployment claims. In 2008, that number jumped to 166,000, and this year its expected to reach as high as 200,000.The state paid out $407 million in unemployment benefits in 2008, plus another $100 million in benefits mandated by a federal law signed last summer by President George W. Bush.This year, Colorado expects to pay between $500 million and $600 million in state benefits.All of that, plus 4,000 to 5,000 phone calls a day and 2.5 million wage records filed each quarter, are handled by a staff of 466.And although Mares is looking for creative ways to get more help, including the possibility of borrowing workers from other state agencies, real relief will come when the economy gets back on track.How long the recession lasts and the ultimate strain on the states unemployment system is, at this point, a matter of educated speculation. Stone pointed out that many experts believe it will be mid- to late-2009 before the economy turns and nations gross domestic product begins to grow.In other recessions, actual job growth has lagged six months behind that.So, Stone said, were talking 2010 before the jobs really start coming back.Still, Colorado has something going for it that it didnt during the last recession in the early part of the decade.We do have a very strong diversified economy, which gives us an advantage over what we experienced in 2001, when we were really heavy in high technology, dot com and telecommunications types jobs, Stone said.Performance a concernBut while the money isnt a concern, the performance of two aspects of the system the phones and the computers are. Both are critical, because someone filing a claim has only two options: Do it over the telephone, or do it on the Internet.And in January, the average wait time for people calling was close to two hours, Cullen said.Others who have tried to make a call to the unemployment office in downtown Denver say theyve waited as long as five hours.Mares recognized how frustrating that must be for people after he read several letters from people who all said essentially the same thing: You have no idea what this is like.So Mares directed his top staff to get on the phones every day and try to get into the system. Now, he said, they have a better feel of the kind of frustration that Cheryl Turner experienced when she spent 40 minutes on hold one day before ultimately being disconnected all as she was trying to determine whether her son was eligible for an extension of benefits.Ultimately, she found help through the Web.But thats the rub: Some things cannot be done on the Web. Replacing a lost personal identification number can only be done over the phone. The same with canceling a claim after finding employment, or changing an address.Mares has directed his staff to look for ways to modify the system so that some of those things can be done on the Web, eliminating the need for someone to get on the phone. He expects some of those changes to be up and running later this spring, and he is hoping the legislature will begin setting aside money later this year to modernize the departments computer system, portions of which date to the 1980s.Even with those challenges, Mares believes his people do great work, once they finally connect with someone filing a claim.Take the case of Ames, who lost her information technology job in October and began collecting unemployment benefits in December, after she exhausted her small severance package.She filed online. She filed her updates every two weeks as required. Then, in late January, a benefits check didnt show up. She waited a few days, then decided to call.She picked up her phone at 7:45 a.m. 15 minutes after the call center opened and spent more than two hours constantly hitting redial before she finally got into the queue. When she got through, she was on hold for 2 1/2 more hours.Ultimately, once she got to a human being, she found an empathetic voice and the help she needed. And she said she recognizes the amount of work done by the departments workers.It is astonishing, Ames said. Thats why I could never be upset with them.Dos and dontsThe Colorado Department of Labor and Employment is charged with a variety of functions, including administration of the states unemployment insurance program, more than 60 workforce centers around Colorado and workers compensation.
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