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.
In fact, Minnesota’s unemployment insurance program has a long history of leading the country.
A big part of it has to do with our seasonal economy. Given our harsh weather, Minnesota has always had to scale our program up and down when seasonality affects worker’s prospects. In a typical year, we may have 25,000 active accounts in October, and have to flex up to handle 100,000 by January — then back down to 25,000 in the spring.
Most warm-weather states remain flat throughout the year.
To accommodate those yearly spikes, our program has been built on a technology-first approach, since technology scales faster than hiring people. Our website, while nothing flashy, has been built to handle the entire application process online without ever speaking to a person in our call center (though you can do that if you need to).
The seasonality of our economy also has made Minnesota’s program more generous. Since it is designed to replace wages for workers who annually find themselves separated from work due to weather, our benefit amounts are generally higher and our threshold for qualifications are lower than in many states.
But perhaps the most distinguishing factor of Minnesota’s unemployment insurance program is its approach to customer service. Minnesota was the first state in the country to start tracking wait times in our call center; in normal times, customers would typically wait no longer than 30 seconds to get someone on the phone.
While many government programs are designed to first prevent fraud, and only then focus on customer service, Minnesota’s program managed to build fraud protection and customer service into the same organizational culture.
The unemployment insurance team’s unofficial motto is, “Everything we do inside the building is for the people outside the building.”
But our ability to meet demand in the last month has been challenged as never before.
Even with a solid foundation, unemployment insurance was never built to meet the scale of an entire economy being put on pause.
We’ve seen our call wait times soar to over an hour, and the normal processes of adjudicating claims and managing eligibility requirements have had to be streamlined to ensure we get Minnesotans paid as fast as possible.
To flex our resources, we’ve added more than 50 new staff to help with processing, while moving staff to work from home as quickly as possible to keep them safe. We’ve asked customers to apply on particular days based on their Social Security numbers to manage loads. We’re processing applications on Sundays for the first time ever. We’ve added two additional servers to manage website load. And we’ve had to shut down the information line at times so that staff can take that time to process claims.
None of these changes are coming easily. But in a crisis of this proportion, perfect cannot be the enemy of the good.
If there’s anything the COVID-19 pandemic has given us, it’s the opportunity to rethink once again how this 85-year-old benefit program can adapt to the modern era.
Deeper investments in technology are critical. We need to build the system on the cloud so that we can better manage surge capacity. We need to make the system more mobile-friendly so that modern applicants can apply more effectively from their phones. And we need to add stronger language support across the system so that language barriers aren’t an unnecessary hurdle to getting benefits.
All of those changes are underway, though they’ll take us some time to implement.
Meanwhile, the team continues to work around the clock to get answers to every single applicant as fast as possible. While its creators may never have imagined that unemployment insurance would need to be stretched to these levels, it’s our responsibility to make sure this foundational social safety net is working well for all eligible Minnesotans, and we won’t stop until we get there.
Steve Grove is the commissioner of the Minnesota Department of Employment and Economic Development (DEED).