Thanks to 'System Set Up to Fail,' Study Shows Number of Unemployed in US Likely Far Higher Than Reported

A person files an application for unemployment benefits on April 16, 2020, in Arlington, Virginia. (Photo by Olivier Douliery/AFP/Getty Images)

Thanks to 'System Set Up to Fail,' Study Shows Number of Unemployed in US Likely Far Higher Than Reported

"It was made complicated so people would get discouraged and give up."

The U.S. economic fallout from the coronavirus outbreak might be far worse than already reported according to a new study that claims unemployment numbers across the country may be a third higher than previously reported due to archaic and faulty benefit infrastructure that has kept an estimated up to 12.2 million Americans from filing claims.

"This study validates the anecdotes and news reports we're seeing about people having trouble filing for benefits they need and deserve," the Economic Policy Institute's Ben Zipperer toldReuters of the results.

Zipperer, the lead author of the study, cited survey results from around the country showing decaying digital infrastructure and hard to follow rules in state after state have kept millions from filing claims for unemployment.

"The results are horrifying," EPI director of Policy Heidi Shierholz tweeted of the survey.

As Zipperer and co-author Elise Gould wrote:

For every 10 people who said they successfully filed for unemployment benefits during the previous four weeks:

  • Three to four additional people tried to apply but could not get through the system to make a claim.
  • Two additional people did not try to apply because it was too difficult to do so.

These findings imply the official count of unemployment insurance claims likely drastically understates the extent of employment reductions and the need for economic relief during the coronavirus crisis.

By EPI's estimates, the survey results reflect between 7.8 to 12.2 million people--and possibly up to 8.9-13.9 million people--who have not been able to file for benefits but who have tried to unsuccessfully.

According to the report:

All told, additional 7.8 to 12.2 million people could have applied for benefits had the process been easier. This estimate is conservative, because some of the 1.6% of respondents (3.7 million people) who tried to apply but were rejected may have had their applications rejected because states were unable to process applicants with expanded eligibility under the CARES Act, such as newly covered self-employed workers. When we extrapolate our survey findings to the full five weeks of UI claims since March 15, we estimate that 8.9-13.9 million people could have filed for benefits had the process been easier.

In its report on the survey results, Reuters spoke to Orlando-based worker Jim Hewes. Hewes, now out of work, has found it impossible to file for benefits due to Florida's archaic and unworkable system.

"It's almost set up to fail," said Hewes. "It was made complicated so people would get discouraged and give up."

Florida has rejected thousands of claims for ineligibility based on "arbitrary" rules, State Senator Jose Javier Rodriguez, a Democrat representing the Miami area, told Fox 35 Orlando.

Rachel Alvarez of Naples told Reuters that she had exhausted her savings but that the state's unemployment rules were barring her from relief, leaving the 44-year-old restaurant server with limited resources with which to care for her three children.

"I have nothing," said Alvarez. "As much as I don't want my kids to see me stress out, each one has seen me cry."

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