Financial Focus: Unemployment Blues

By Professor Anthony Rivieccio MBA PFA

When one got laid off in a few years ago, you didn’t have to stand in any lines at the unemployment office.

The unemployment office was in cyberspace.

Today, State Departments of Labor offer the convenience of filing jobless claims by telephone and internet. While success has varied from state to state, most people who filed claims would start to receive assistance in three weeks or so.

Welcome to Coronavirus 2020, where now it might take you three weeks just to apply.

The phone lines are jammed. You might get disconnected. Or even worse. After completimg your claim and press the enter button, you’re told: “Try again. Your application did not go through.”

As of this writing, US employment claims hit 10 million. How big is that? Let me put it this way, the population of the City of New York is 8.3 million. The State of New Jersey has nine million residents. In essence, two percent of the country’s adult working population is no longer working.

In two weeks, the US unemployment rate has risen from 3.7 percent to 4.4 percent — a 18 percent increase. And it will rise even higher.

Thanks to Congress and President Donald Trump, jobless workers will receive $600 extra on top of their state UI benefits — for up to 4 months.

Federal lawmakers extended the UI benefit for an additional 13 weeks to make the average State benefits last, at least, 24 weeks (or more depending on your State) .

Finally, the new pandemic unemployment assistance program expands eligibility to those who are unemployed and for the first time covers independent contractors, the self-employed and gig economy workers.

Unemployment Headaches in New York

Last week, the NYS Labor Department received more than 8.2 million calls, compared to 50,000 in a typical week. Its online filing system had 3.4 million visits, compared to 350,000 normally.

Governor Andrew M. Cuomo provides a coronavirus update during a press conference in the Red Room at the State Capitol. Credit: Mike Groll/Office of Governor Andrew M. Cuomo.

The agency has dedicated 700 people to the unemployment insurance hotline and is training hundreds more. It has extended call center hours, added 20 additional servers to boost its website capacity and is processing applications on Sunday.

The state is also asking people to file on certain days, based on the first letter of their last name.

Still, even late at night, the agency’s homepage warns it can take more than an hour to apply.

Gov. Andrew Cuomo recently told CNN: “The state system was not keeping up with the demand.” “I apologize for the pain. It must be infuriating to deal with,” he later said.

“The site is so deluged that it keeps crashing because you literally have hundreds of thousands of people at any time trying to get on the site,” Cuomo said.

“It’s compounding people’s stress,” he said. “You’re unemployed, you’re trying to get on some darn website. You can’t get through the website.”

So hold on and keep trying. My guess is in 2-3 more weeks, when things settle, I am sure many more will be able to get through. However, you must be vigilant.

The best news, you can apply until December. The bad news, count and spend your money wisely until then.

Professor Anthony Rivieccio, MBA PFA, is the founder and CEO of The Financial Advisors Group, celebrating its 24th year as a fee-only financial planning firm specializing in solving one’s financial problems. Mr.  Rivieccio is an Adjunct Professor of Business, Finance & Accounting at the City University of New York and Monroe College. You can reach Anthony at 347.575.5045.

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