Saturday, July 25, 2009

Jobless claims overwhelm the safety net...

Greetings good citizen,

I’m having a little trouble getting started with tonight’s offering. Tonight’s story mirrors yesterday’s offering as not being a ‘new’ news story but an old one that has been ‘recycled’ because the problem is getting worse, not better.

It’s tales like this one that make you wonder how all the morons babbling about ‘green shoots’ remain employed. If you haven’t guessed, it is my outrage over the incompetence on display in this article that made it difficult to pick a starting point.

Are we a society or are we a corporation that is run for the benefit of the owners? That is the question the people of this nation need to be prepared to answer.

Allegedly, a corporation is ‘part’ of a society but somehow our leaders have turned this proposition around, corporations no longer ‘serve’ society, now society serves corporations!

Jobless Checks for Millions Delayed as States Struggle

Published: July 23, 2009

WASHINGTON — Years of state and federal neglect have hobbled the nation’s unemployment system just as a brutal recession has doubled the number of jobless Americans seeking aid.

With millions of jobs lost and major industries on the ropes, America’s array of government aid — including unemployment insurance, food stamps and cash welfare — is being tested as never before. This series examines how the safety net is holding up under the worst economic crisis in decades.

In a program that values timeliness above all else, decisions involving more than a million applicants have been slowed, and hundreds of thousands of needy people have waited months for checks.

And with benefit funds at dangerous lows even before the recession began, states are taking on billions in debt, increasing the pressure to raise taxes or cut aid, just as either would inflict maximum pain.

Sixteen states, with exhausted funds, are now paying benefits with borrowed cash, and their number could double by the year’s end.

Call centers and Web sites have been overwhelmed, leaving frustrated workers sometimes fighting for days to file an application.

While the strained program still makes more than 80 percent of initial payments within three weeks — slightly below the standard set under federal law — cases that require individual review are especially prone to delay. Thirty-eight states are failing to make those decisions within the federal deadline.

For workers who survive a paycheck at a time, even a week’s delay can mean a missed rent payment or foregone meals.

Gegner here, take a trip back with me in the time machine for a look at what went on ‘before’ this mess blew up in our collective faces. Understand that ‘our’ refers strictly to the working schmucks of this nation because the Wo Fat corporation has been reaping the benefits while paying enormous bonuses to the ‘responsible parties’.

Since the early 80’s (when our jobs truly started heading off-shore wholesale) Corporate USA has made quarter after quarter of ‘record profits’.

You’d think record profits would be ‘balanced’ by higher wages but no, half the time you were being told by management they couldn’t give YOU a raise because it would hurt ‘competitiveness’.

After a while, they abandoned this pretense and started telling you to be happy you still had a job…which brings us to today. Now you don’t have a job (along with your pension plan being ‘under funded’) and the states don’t have enough cash to pay you your unemployment check…because they cut how much they charged employers to make themselves more ‘business friendly’!

Understand that incentives for employees disappeared, instead of giving the worker an incentive to produce, the boss got the incentive instead. You work harder for less because if you didn’t, the boss fired you!

No carrot, all stick…produce or else!

No wonder profits were off the charts while they were chopping every third guy’s head off!

So here are our corporate masters, making coin hand over fist, all the time crying about how the high tax rate was killing their competitiveness.

Now the jig is up and surprise, surprise, they weren’t paying enough!

We don’t have to go to the graveyard to dig up some politicians to hang; the fuckers responsible for this fiasco are still walking around.

Just thought I’d share that thought with you…

Kenneth Kottwitz, a laid-off cabinet maker in Phoenix, waited three months for his benefits to arrive. He exhausted his savings, lost his apartment and moved to a homeless shelter.

Luis Coronel, a janitor at a San Francisco hotel, got $6,000 in back benefits after winning an appeal. But in the six months he spent waiting, there were times when he and his pregnant wife could not afford to eat.

“I was terrified my wife and daughter would have to live on the street,” Mr. Coronel said. [Now substitute your own name and see how these shoes fit…]

Labor Secretary Hilda Solis said: “Obviously, some of our states were in a pickle. The system wasn’t prepared to deal with the enormity of the calls coming in.”

The program’s problems, though well known, were brushed aside when unemployment was low.

“The unemployment insurance system before the recession was as vulnerable as New Orleans was before Katrina,” said Representative Jim McDermott, Democrat of Washington, who is chairman of a House panel with authority over the program.

Now the number of unemployed Americans has doubled since 2007 to 15 million and the program is more than tripling in size. About 9.5 million people are collecting benefits, up from about 2.5 million two years ago. Spending is expected to reach nearly $100 billion this year, about triple what it was two years ago.

Given how suddenly the workload has increased, some analysts say the delays might have been even worse.

“Payments are later than they should be, and later than they used to be, but states have been overwhelmed,” said Rich Hobbie, director of the National Association of State Workforce Agencies, which represents the program’s administrators. “Considering the significant problems in the program, unemployment is responding well.”

The recovery act passed in February provided states an additional $500 million for administration. It also suspended interest payments through 2011 for states paying benefits with federal loans. [Ahem! Once again the public is being billed for a benefit employers are supposed to shoulder! I’ve read the whole article and no where will you find so much as a proposal that employers make the ‘taxpayers whole’.]

Unemployment insurance began as a New Deal effort with dual goals: to sustain idled workers and stimulate weak economies. States finance benefits by taxing employers, typically building surpluses in good times to cover payments in bad. [Naturally, politicians seeking to make their states more ‘business friendly’ scuttled that arrangement.]

In 2007, the average state paid about $290 a week and aided 37 percent of the unemployed.

As downturns over the last 20 years proved infrequent and mild, states cut taxes, and the federal government, which pays administrative costs, reduced its support by about 25 percent. The states’ performance sagged. [‘Sagged’! Sixteen states downright collapsed! Dragging society closer to the day when the streets run red…]

In a recent report to the Department of Labor, Ohio said its computer problems “kept the system performance at a snail’s pace.” Louisiana said its call center was staffed with “temporary workers, with little knowledge” of unemployment insurance.

North Carolina said a wave of retirements had left it “unable to maintain pace or volume of work.” Virginia wrote “performance continued to be very stagnant” and called the odds of improvement “bleak.”

By 2007, 11 states were paying benefits so slowly they violated multiple federal rules, up from just two at the start of the decade.

While most eligibility reviews can be done by computer, about a quarter require a caseworker — to ensure, say, the applicant was laid off, rather than quit.

In the last year, states processed just 61 percent of these cases within three weeks — well below the federal requirement of 80 percent. More than a half-million cases, 6 percent, took more than eight weeks, and 350,000 took more than 10 weeks.

Of the 12.8 million eligibility reviews that have occurred during the recession, 4.6 million took more than three weeks. That is 2.1 million more than federal rules allow. [Not that there appears to be any penalty for failure to comply…]

Appeals take even longer, with 28 states violating timeliness rules, many of them severely.

Perhaps no state is as troubled as California, which has not met timeliness standards for nine years. As in most other states, its 30-year-old computer runs on Cobol, a language so obsolete the state must summon retirees to make changes.

Yet a major overhaul in California has been delayed for five years, with $66 million in federal funds still waiting to be spent. In part, the shelved project was meant to upgrade the call centers, which were “completely swamped” last winter, a legislative analyst wrote, with “desperate unemployed Californians dialing and redialing for hours.”

Deborah Bronow, who runs the state’s unemployment insurance program, said, “The systems were antiquated to begin with,” and “we were unprepared.”

In April, Gov. Arnold Schwarzenegger declared a state of emergency, saying the failure to efficiently process checks posed “extreme peril to the safety of persons and property.” [Understand, this is the same guy that was sitting on $66 million in federal funds and did nothing to upgrade the system.}

California has not met federal standards for adequate reserves since 1990. Still, it cut taxes and raised benefits in the last decade. It is now paying benefits with federal loans, with its debt projected to reach nearly $18 billion next year.

Among those hurt by delays was Mr. Coronel, the San Francisco janitor who lost his hotel job in January. With the phone lines jammed, it took him two days to file an application and a month to learn it had been denied.

Then the waiting really began, as Mr. Coronel filed an appeal and heard nothing for three months. Luckless as he applied for new jobs, he borrowed to pay the rent, then moved in with his mother, and joined his pregnant wife in skipping meals.

“The worst day was when my daughter was born,” he said. “I had no clothes for her, and no car seat.”

While federal rules require states to decide 60 percent of appeals cases within a month, in recent years, California has met that deadline for just 5 percent. A report by the state auditor last year found the appeals board rife with nepotism and mismanagement.

Mr. Coronel won the appeal, but is soothing a marriage strained by a six-month wait. “It’s extremely stressful when you don’t know how you’re going to support your family,” he said.

Nationally, the program is the worst financial shape since the early 1980s, when back-to-back recessions left more than half the states borrowing from the federal government. Tax increases and benefit restraints gradually rebuilt the funds, then states changed course and pushed taxes well below historical levels.

From 1960 to 1990, the tax rate averaged about 1.1 percent of overall payroll. Over the last decade, it fell to 0.65 percent. That represents a tax cut of 40 percent.

Measured against a decade’s payroll, that saved employers $165 billion. But by 2007, when the recession began, the average state had just six months of recession-level benefits in reserve, half the recommended sum.

“The attitude became, ‘We don’t need a firehouse — we can buy hoses when the fire starts,’ ” said Wayne Vroman of the Urban Institute, a Washington research group.

Some Republican analysts defend the tax cuts, saying they helped both employers and workers, by spurring the economy and creating jobs.

“Lower tax rates make it easier to attract business,” said Doug Holmes, president of UWC, a group that advocates on behalf of employers. “We don’t want to spend a whole lot of time beating ourselves up because we didn’t raise taxes enough. Nobody anticipated a recession this size.” [Whocoodanoode?]

A big reason the reserves fell, Mr. Holmes said, is that the jobless now spend more time on the rolls — 15 weeks in recent years, up from 13 weeks several decades ago. Each extra week costs the program about $3 billion a year. The solution, he said, is stronger job placement provisions. [Yeah, like anyone is hiring!]

But others see an irresponsible past that now promises future pain.

“Workers who had nothing to do with the funds becoming insolvent are going to be asked to pay for that with benefit cuts,” said Andrew Stettner, an analyst at the National Employment Law Project, a workers’ rights group. “That’s the worst thing states can do — it takes money straight out of the economy.”

Among those who say timely benefits are essential is Mr. Kottwitz, the Arizona cabinet maker, who lost his job just before Christmas. He filed a claim and promptly received a debit card, with no money on it. It took him weeks to reach a program clerk, who told him to keep waiting.

“They said, ‘We’re behind — be patient,’ ” he said.

With little savings, no family nearby, and a ninth-grade education, Mr. Kottwitz, 42, had limited options. He got $100 a month in food stamps, collected cans and applied for jobs. When his landlord put him out, he moved to a shelter so overcrowded he spent his first few nights on the ground.

“I felt like I was the scum of the earth,” Mr. Kottwitz said.

In March, the shelter referred him to Ellen Katz, a lawyer at the William E. Morris Institute for Justice, an advocacy group, who secured his benefits. By the time the money arrived, Mr. Kottwitz had lost nearly 40 pounds. His first stop was an all-you-can-eat buffet.

Now back in an apartment, he said he was sharing his story in the hope that someone might read it and offer him a job.

“You think that someone would have seen this coming and been more prepared,” he said.

How many of you think Mr. Kottwitz has a valid point? I certainly agree with him! The part that is most remarkable is how few thought the ‘great moderation’ was ever going to end…even after the ‘sub-prime’ disaster.

Naturally, once you’ve bet ‘one way’ it becomes difficult to admit the people you were hailing as geniuses only yesterday indeed turned out to be morons.

It wasn’t ‘different’ this time, it’s the same as it ever was.

This is what pisses me off so much about the freaking fruitcakes and their ‘invisible’ green shoots! Or yesterday when the markets added 180 points, pretty much for nothing!

They weren’t so brave today, where they?

Which leaves us with another question good citizen, are you frightened?

You damn well better be because the nut jobs running this coconut stand are freaking out of their minds!

Worse, this isn’t a situation that will straighten itself out. There’s no way in hell these idiots will ‘accidentally’ turn this ship around. I also don’t have any faith that ‘spirit in the sky’ will save any of us at the ‘last minute’.

This isn’t TV, this is the real deal. If we don’t grab the wheel soon the survivors will be left to pick up the pieces.

Once again we see the ‘incompetence’ card being played to cover for the greed of the selfish few, and it sickens me.

It’s time for the adults amongst us to take the stick away from the kid and show ‘em what it’s used for.

Thanks for letting me inside your head,



  1. Thanks for another excellent post!

  2. You are most welcome! I try to keep it interesting as well as 'diverse'. There are lots of things going on. Sorry if I have failed to acknowledge any earlier comments. It's been mighty quiet around here.

    I'll be more 'attentive' in the future!