Experts say we have yet to reach the peak of the coronavirus pandemic that has most of society sheltering in place and so much of our industries and businesses idle. The effects of this economic turmoil is headlined by the record number of South Carolinians, and Americans, applying for unemployment insurance, many for the first time in their lives.
Just under a year ago, unemployment statistics were swirling steadily downward into record-low percentages and our state’s employer insurance trust fund was in the best position in its history. However, in just two weeks’ time, non-essential businesses closed, and we saw a massive unemployment surge as applications exponentially multiplied.
The SC Department of Employment and Workforce is a countercyclical agency, meaning when times are good, they operate lean and mean, as good stewards of taxpayers’ dollars. When economic downturns occur, they ramp up resources to provide assistance. Scaling an agency whose primary funding comes from the federal level with the complexity of the unemployment insurance laws, both federal and state, is more like accelerating a semi-truck up a steep hill than a sports car. They paid traditional recipients, added hundreds of thousands more than ever before, will pay them additional funding from the federal government, allow a new multitude of self-employed individuals to get on, rebuild systems to support all these changes, and protect from fraud.
They pivoted to support the onslaught, increasing call center agents from 49 to 260, and took 225% more calls within a two week period. And they will have more than 500 people on the phones in the next week.
The average number of claims the agency processed prior to COVID-19 was approximately 2,000 per week. In the first four weeks, they processed more than 268,000 new claims.
The on-line portal struggled to support all these claims, and had to be completely rewritten to accept all the new rule changes.
Imagine your business serves 1,000 customers a week. One day, 10,000 customers demand services (the first wave of W-2 layoffs). At the end of that day, you find out 10,000 new customers will come everyday that week. And next week, 100,000 more will come, needing a whole new set of rules (think self-employed / independent contractors).
While these numbers aren’t literal, this analogy helps explain the jolt to the system that has been an unimaginable challenge. But that challenge is being met with remarkable agility, while learning to work remotely and creating distancing protocols.
In the beginning of the week of April 12 they paid approximately $175 million in benefits – both traditional state unemployment benefits as well as the beginning of the weekly $600, now retroactive payments, from the first program of the CARES Act.
I am sure that this volume will continue for several more weeks as we move towards the apex of this virus and finally begin to return to some sort of normalcy. As best as you can, I would urge you to please be patient with the staff and the system as they work through incredible challenges under immense pressure.
Founder, Go To Team; member of the SC Department of Employment and Workforce Review Committee