Business shutdowns have led to mass unemployment across the nation. The jobless are filing for benefits in unprecedented numbers, including Illinoisans.
Before the pandemic, about 200,000 people applied for unemployment insurance across the country in an average week. That all changed with mass furloughs and layoffs. Carl Campbell is Professor of Economics at Northern Illinois University. He says filings increased greatly in the first three weeks since stay-at-home orders went into effect.
“It’s been 17 million, so about 30 times what it normally is,” he said.
That translates to about 10% of the American workforce. In Illinois, unemployment benefits apply for half a year, but Campbell says the current system isn’t enough.
“So with State benefits, they only pay about half your former wage, and you have to have earned so much, about $1500 in the past year, to qualify. And State benefits usually don’t cover things like gig workers or the self-employed.”
To remedy this, there have been several regulatory changes. One is a provision in the federal CARES Act for freelancers and independent contractors, also known as 1099 workers. It allows them to receive unemployment benefits if their job loss was directly caused by the pandemic. NIU law professor Michael Oswalt says that definition is broad.
“So it includes not just workers who have been diagnosed or are seeking a diagnosis, but someone where businesses have closed because of the pandemic or are home caring for a child who can’t attend school or day care.”
But the federal program that would cover contract workers isn’t expected to take effect until May.
Federal funding has also expanded the types of benefits that the Illinois Department of Employment Security can offer. One grants an additional $600 per week in benefits. Another expands the period for those collecting benefits by another 13 weeks, and the final program provides benefits for independent contractors and freelancers. But there are several obstacles currently facing those filing for benefits. Oswalt says gig workers have an extra burden due to their classification as independent contractors.
“So that means not only that these companies are not paying into the unemployment system, but it puts a burden on workers themselves to document their income and work history on their own," he says. "That takes time, it’s confusing, and it’s a burden in a pandemic.”
In addition, there have been widespread delays in processing applications. State Representative Jeff Keicher says his constituents have reported being stuck on hold when calling in.
“At a minimum, we should be able to have enough employees throughout the state of Illinois that are able to man the phone lines on the front end and at least give a voice instead of frustration to these people that keep getting a busy signal or getting hung up on," he said.
Jennifer Cisco is with the Illinois Department of Employment Security. She says the State is encouraging applicants to apply via the IDES website, reserving the call centers for those who need direct technical assistance.
“We’re asking people to adhere to an alphabetized schedule online that would require people to file on a day that corresponds to the letter of their last name,” she says.
IDES is asking residents to abide by the same schedule when filing via the website. Once the claims are received, Cisco says, the turnaround isn’t too long.
“Applying for unemployment benefits from the time of filing to the time of payment typically takes around 2-3 weeks.”
IDES says it’s increasing capacity at the call center and website so that it can adequately process claims. Keicher says more immediate boosts in capacity would alleviate the frustration.
“We may need training or expertise to actually proceed with the filing of the claim, but these people need answers and direction," he said. "They need someone to hold their hand while they’re going through some of the scariest times they will potentially ever live through.”
Carl Campbell says even when social distancing restrictions are scaled back and benefits are disbursed, the economy will remain in flux.
“Demand’s going to be really down because people are going to be very reluctant to going out to a restaurant or a theater or a sporting event, or anything that involves a lot of people until there’s a cure or a vaccine for the coronavirus.”
And it's anyone's guess when that will be.