California’s unemployment rate continues to soar after jobless claims increased statewide last week for the fourth consecutive week.
California workers filed roughly 68,100 jobless claims the week ending Aug. 14, up 2,600 from the previous week, the U.S. Labor Department reported Thursday, the highest level in three months.
While claims climbed in California, which has among the highest unemployment rate in the nation, unemployment claims fell nationally. For the same week, 348,000 workers filed initial unemployment claims nationally, a decrease of 29,000 from the previous week.
And nearly a year after Gov. Gavin Newsom appointed a strike team to overhaul the Employment Development Department (EDD), hundreds of thousands of jobless Californians still haven’t received payments, an issue of high importance cited by voters as a reason to recall Newsom.
Last fall, the strike team presented recommendations for the agency to implement. Since then, it has completed about half of them. EDD has put in place an identity verification system, rife with privacy and usability concerns noted by critics and claimants, expanded the use of an automated system to process claims, which users say isn’t reliable, and expanded options to help claimants by creating chat bots online and text messaging services.
Still, all mail hasn’t been processed through a document management center, all quality controls haven’t been put in place, and updates to the call center system haven’t been completed.
The EDD was able to quickly hire temporary workers to help answer phones and eliminate an initial backlog of 1.5 million claims.
However, as of July 31, the agency still had a backlog of 216,000 claims that hadn’t been approved within the 21-day required period to be processed. In the week ending July 31, the agency received 3.4 million calls, records show, but its call center was only able to answer 248,000.
The agency still processes claims manually and not all have been moved to electronic systems, including about 14% of new claims, the Los Angeles Times reports.
Earlier this year, Newsom also pledged $342.9 million to improve EDD over two years to expand its workforce, upgrade its technology and reduce fraud, among other measures. When announcing the funding, he said, “We are making a big, bold commitment in terms of benefits management upgrades and addressing issues of language access in this budget proposal.”
But these actions come too little to late, his critics argue. His unsuccessful attempts to reform the EDD or recover wasted taxpayer money has been a focus of campaign ads and public speeches by candidates running against him.
“Newsom’s Employment Development Department spent over $30 billion in fraudulent payments to criminals and prison inmates, while forcing hundreds of thousands of struggling, out-of-work Californians to wait months for their money,” Orrin Heatlie, a retired Yolo County sheriff’s sergeant who led the recall movement, argues.
The EDD reports that at least $11 billion was paid out in fraudulent claims and an additional $19 billion identified as suspicious are under investigation. It recently named former U.S. Attorney McGregor Scott to serve as special counsel to investigate the largest employment fraud in the state's history.
Last November, Scott, a former U.S. attorney for the Eastern District of California, launched an investigation with nine county prosecutors into California unemployment fraud. They expressed alarm by the number of prison inmates who received payments who were ineligible to receive them because they had not been employed. The prosecutors estimated at the time that fraudulent claims involving 21,000 prison inmates alone cost taxpayers roughly $400 million.
“State unemployment systems last year were under attack by sophisticated international and domestic organized fraud schemes,” Scott said in a statement.
At a recent debate at the Richard Nixon Presidential Library and Museum in Yorba Linda, Republican candidates weighed in on how to fix the EDD.
Conservative commentator Larry Elder said he would replace EDD’s antiquated information technology systems and change how claims are processed, adding, “It is a disgrace that Gavin Newsom’s draconian coronavirus restrictions forced Californians out of their jobs and homes, while the EDD paid up to $31 billion to fraudsters and criminals.”
Former San Diego Mayor Kevin Faulconer said he would make the EDD a top priority technology project; businessman John Cox said he would replace EDD management.
Republican Assemblyman Kevin Kiley said he co-authored several bills to reform the agency, including a measure to end the inclusion of Social Security numbers in EDD mail.
“Unfortunately, Governor Newsom failed to act with any sense of urgency,” Kiley said. “He refused to prioritize EDD reforms in his `historic state budget, choosing instead to put Band-Aids on a broken system.”
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