In March 2019, Californians filed 160,384 new unemployment insurance claims, according to data from the United States Department of Labor. A year later that number was 739 percent higher—more than 1.3 million state residents filed for unemployment in March 2020.
Percentage-wise, Santa Barbara County saw a similar spike and then some. In March 2019, county residents filed 1,623 new, or “initial,” claims, according to data from the state Employment Development Department (EDD). In March of this year, county residents filed 17,246 initial claims—a 963 percent increase year over year. For every initial claim made in March last year, county residents made 10 this year.
But just because someone applies for unemployment insurance doesn’t mean they’ll get approved, and it certainly doesn’t mean the checks will start rolling in the next day. Central Coast elected officials told the Sun that they are now devoting a large portion of their staff time to helping their constituents troubleshoot the faulty and overwhelmed EDD system.
“In the last four days we’ve gotten over 500 contacts from constituents having issues with EDD,” Assemblymember Jordan Cunningham (R-San Luis Obispo) told the Sun on May 1. “It never really operated well, even before this crisis.”
Now, Cunningham said, the immense strain on the already troubled system is making it difficult for new claimants to secure unemployment benefits, even those who clearly qualify. Cunningham said that nearly all of his constituent services staff are working on unemployment-related casework.
Assemblymember Monique Limón (D-Santa Barbara) painted a similar picture with what her Santa Barbara County constituents are facing.
“At this moment, the top casework issue in terms of policy and agency issues is our EDD,” Limón told the Sun.
Limón said that, given the unprecedented numbers of first-time claimants, constituents’ concerns initially centered on questions about the system itself. Then, she noticed a shift: As more people began applying, they started running into issues with the online application platform crashing, convoluted applications, and call lines that were always full.
In response to the increase in callers, the EDD expanded its call center hours from four hours a day, five days a week, to 12 hours a day, seven day a week. But Cunningham said that his constituents continue to experience long wait times, and Limón said she is still hearing from folks who are confused about how to receive the benefits they qualify for.
“We’re having conversations about how to maximize or leverage these different pots of money, both at the state and federal level, but sometimes they’re not aligned,” Limón said.
While unemployment benefits are handled through EDD, a state agency, the federal government is temporarily giving an additional $600 per week to those who qualify for unemployment benefits. Other federal initiatives include the Paycheck Protection Program, which loans money to businesses for expenses like payroll, utilities, and rent, with potential for loan forgiveness.
But Sandra Dickerson, CEO of Santa Maria-based company Your People Professionals, said that from her observations, there’s some dissonance between the two federal programs that’s creating problems for both workers and their employers. Your People Professionals manages the human resources needs of more than 50 local businesses from a range of industries.
“We’ve been very engaged because, as the HR department, we’re dealing with a lot of layoffs, processing final wages if that’s applicable, and for many of them we get and process the unemployment claims,” Dickerson said.
She said that some workers are faced with choosing between staying home, where in some cases they’re making more on unemployment with the added federal dollars, or going back to work, where they may be more likely to catch the virus.
“I have someone, for example, who was only working part time. She’s making about 2 1/2 times on unemployment what she makes when she’s working part time because of that federal addition,” Dickerson said. “How does that employer call that person back to work and ask her to give that up?”
That being said, many jobs provide many benefits that unemployment insurance doesn’t, such as health insurance, U.S. Rep. Salud Carbajal (D-Santa Barbara) told the Sun. He said that paying for health insurance when you’re unemployed can cost anywhere from $400 to $1,000 a month.
“People didn’t ask to be laid off and didn’t ask to be having a pandemic crisis,” Carbajal said, adding that the federal boost to state unemployment benefits is “about putting workers first and about helping make sure they are safe.”
He continued, “that’s why the federal government provided the Paycheck Protection Program and economic injury disaster loans to businesses so that they could also stay on their feet.”
While Dickerson said the Paycheck Protection Program has potential to help businesses, in some ways she believes it creates complications.
In order to have their loan forgiven, businesses must use 75 percent of it on employee wages. Furthermore, Dickerson said that by June 30 businesses must restore their employee count to what it was before the shelter-at-home mandates in order to obtain maximum loan forgiveness. But if a business temporarily shuttered, lost revenue, or has overhead costs that exceed the other 25 percent of their loan, this could be unsustainable.
“The concept is that they’re supposed to hire people back, but they don’t actually have any work for them,” Dickerson said of her clients. “Then they still have all of the rest of the overhead costs of sustaining that business and there’s no money flowing in to cover that. … So you have to make a decision: How many people do you bring back to get at least part of that loan forgiven, versus looking longer term if you don’t have enough revenue to sustain that?”
Dickerson said that from her perspective, these issues are rooted in the federal government not acting quickly enough when the crisis started.
“We need to support small businesses and help them survive this. At the same time, we need to ensure wage stability for employees,” she said. “Planning ahead of time and ensuring small businesses the availability of these forgivable loans—that would have prevented so many employees from ever even going on unemployment.”
Cunningham also noted that not enough business owners were able to secure the loans they needed: His office estimates only about 10 percent of constituent business owners were funded.
Carbajal said that there’s “no black-and-white solution here. We’ve never been faced with a pandemic the way we’re faced now. This is the time where we come together and we try to come out with things that we can all find common ground on.”
Reach Staff Writer Malea Martin at mmartin@santamariasun.com.
This article appears in May 7-14, 2020.
