In the early 1930s, when the U.S. government was debating what would become America's unemployment insurance program, the American Labor Legislative Review made this argument:
"The fundamental case for unemployment protection lies in the fact that under a democratic form of society we are forced to prevent any large-scale starvation. It is practical sense to build a system which will gather the funds in good times and disburse them in bad times."
Whether our Depression-era forefathers anticipated that bad times could include a global health pandemic is unclear. But in the past month, the COVID-19 crisis has tested the program they built at a scale and scope no one ever could have imagined.
Since March 16, the Minnesota Department of Employment and Economic Development (DEED) — which oversees our state's Unemployment Insurance Program — has seen twice as many applications for unemployment benefits than we saw in all of 2019.
We have processed over 450,000 applications for unemployment in less than one month. Before the crisis began, we had around 66,000 active accounts.
Usually, recessions develop over a period of months, and unemployment insurance programs have time to scale up to meet demand. But COVID-19 has had the effect of creating a recession overnight, testing our system in an unprecedented way.
Across the country, state unemployment insurance systems have been crashing under the load. In at least 10 states, online platforms have gone down or crashed completely. In most states, payments have not even been issued yet.
In Minnesota, we've managed to keep our system stable and have successfully processed initial payments for more than 90% of eligible applicants within days. Last week, we became the first state in the country to issue the extra $600 weekly payments passed by the federal government COVID-19 relief package — and this week we also implemented the 13-week extension on unemployment benefits, which will immediately help about 8,000 more people.