Swept up in the flood of jobless claims that inundated the state a year ago, Gaddini and her husband – who also lost his job – spent five months trying to fix their unemployment claims and secure their benefits. Oregon was among the slowest in the nation to pay jobless benefits during the early days of the pandemic.
While Gaddini eventually got some money, the payments vanished again in December amid confusion over which benefits program she should be on. Letters instructed her to call the department to clear up the issues, but the Southeast Portland resident – like tens of thousands of other Oregonians – has been unable to reach the department on its jammed phone lines despite months of fruitless phone calls, emails and outreach to lawmakers.
So Gaddini and her husband, who have a three-year-old at home and are expecting another baby in June, are on food stamps and dipping into their savings while they wait for their payments and struggle to get the attention of the employment department.
“It’s just frustrating that after a year it still doesn’t seem like it’s changed,” said Gaddini, 38. “We still can’t get ahold of them.”
A year into the pandemic, resolving a problem with your jobless benefits in Oregon remains an arduous task. The state remains well below the national average in timely benefits payments, according to federal data, though the employment department says the figures don’t fully capture its progress and performance.
Thousands of Oregonians had their jobless benefits lapse after 12 months on the unemployment rolls. In many cases they can still receive aid, but they need to switch to new programs – which means they need to sort through the department’s byzantine website, which in turn puts more pressure on the agency.
It’s still nearly impossible to reach the agency by phone, Oregon is still among the slowest states at paying new benefits claims, and the department expects it will continue to be hobbled by its obsolete computer system until new technology arrives in 2025.
“I know this is extremely frustrating and it’s not acceptable. We are doing everything we can to move benefits out the door as quickly as possible,” Gov. Kate Brown told The Oregonian/OregonLive in her first interview on the crisis at the employment department since the pandemic began.
The agency has indisputably made progress since the pandemic’s chaotic early days, when laid-off workers commonly waited months to have their claims processed. And, the department’s lapses notwithstanding, the benefits have been an essential safety net during the steepest, deepest recession on record.
Oregon has paid $8.7 billion to 480,000 Oregonians over the past 13 months and, for most of them, the money arrived dependably once the flow began. On Wednesday, it plans to launch a new online form in hopes of making it easier for claimants to communicate with the department.
When claims run into trouble, though, it can take weeks or months to untangle the issues – leaving vulnerable, laid-off workers without any income at all and scrambling to make ends meet.
While Brown commended the employment department’s work under acting director David Gerstenfeld, whom the governor appointed on an interim basis 11 months ago, she acknowledged the state still has a long way to go to fix its chronic issues.
It may be months before she decides who will lead the department in the long run, adding that she will likely wait for a forthcoming state audit before she announces other major changes that could change the trajectory of the department.
“We’re throwing resources at the problem and I know this team,” Brown said. “They work day and night, honestly. I know it’s really frustrating.”
Persistently Slow
Every state struggled to pay jobless benefits last year, when the pandemic brought an unprecedented surge in layoffs. Oregon shed 271,000 jobs in the first month of the pandemic as the state’s jobless rate abruptly jumped from a historic low of 3.6% to a record high, 13.2%.
While Oregon’s job losses were similar to elsewhere in the country, few states had as much trouble dealing with the sudden layoffs. Oregon remains among the slowest in the nation at paying benefits.
Thousands of workers couldn’t get basic claims processed; the state took months to start paying benefits to self-employed workers through a new federal program; and Oregon was the very last in the nation to pay benefits for the first week workers were out of a job, delivering the money in November, eight months late.
There are no perfect benchmarks to measure the department’s performance. The agency says its balky computers have made it impossible to get a firm grasp on the number of backlogged claims, and it says comparisons among states using federal data are problematic because of differences in how states report their numbers and prioritize claims.
In broad terms, though, the federal numbers show a consistent picture: During the pandemic, Oregon was consistently among the slowest at issuing benefits within the three-week window for timely payments.
Nationally, two-third of payments are made within that time frame. In Oregon, fewer than half are, though the state is no longer at the very bottom of the rankings.
Oregon’s issues were well understood, long before the pandemic began.
A History of Failure
A decade of failed leadership at the employment department, documented by two state audits and successive investigations by The Oregonian/OregonLive, prevented the agency from adopting more responsive practices or replacing an obsolete computer system from the 1990s.
That set up Oregon for failure when the pandemic recession hit last year, and set Oregon back again this spring when claims spiked again.
Oregon’s phone lines were flooded once more, the busiest they had been since the earliest days of the pandemic, and scores of unemployed workers found themselves again struggling to understand the complex web of jobless benefits and parse confusing messages from the state.
Particularly exasperating, Oregon’s rigid computers continue generating letters that instruct people to call about their claims – even though the state’s phone lines are jammed and there’s no way to get through.
Incredibly, the department says it’s nearly impossible to reprogram the computers to issue more useful instructions and so it has taken to social media and slipping notes inside automated mailings to direct people to more current information, notably the department’s online “Contact Us” form.
The department says it will take until July to begin shoring up its phones, and that the issue won’t be solved before the end of the year.
David Rutiezer, 52, was a part-time contractor providing tutoring services at Portland Community College before the pandemic. That work went away early in the pandemic but Rutiezer said it didn’t get his first jobless benefits until December, when checks suddenly arrived in the mail without advance notice.
The payments stopped again in January and Rutiezer said he’s at a loss as he considers a GoFundMe campaign, busking online or other unconventional means to pay his bills.
“What can I say? I’m just scraping by and it would really help to have these unemployment payments on time. I can’t even express how stressful it’s been,” Rutiezer said. “I’ve done everything they’ve told me to do. I’ve filled out all their online forms.”
Leadership in Crisis
While nearly 500,000 Oregonians have been unemployed and collecting jobless benefits at various times in the pandemic, the recession has meant nearly a year of nonstop work for Gerstenfeld, the agency’s acting director.
A lawyer with a decade of experience in the department, including nearly nine years administering its unemployment insurance program, Gerstenfeld took over as acting director in May. He speaks with a technocrat’s precision and authority about even the most arcane elements of the benefits programs.
The 11 months he has spent running the department have been a dramatic reversal from the period just before he took over. Gerstenfeld’s predecessor, Kay Erickson, was plainly overwhelmed by the severity of the crisis and refused for weeks to speak to the media.
Lawmakers and Brown herself say they could not get clear answers from the department’s prior leaders about how it planned to deal with the mountain of unpaid claims as the agency spiraled downward.
By contrast, Gerstenfeld is steady and lucid.
In legislative hearings and on his weekly media calls, he patiently explains to lawmakers and journalists how the benefits programs work and scrupulously argues the merits of various ideas for improving them. He makes a point of expressing sympathy for those awaiting their benefits and steadfastly defends his staff’s efforts.
“I understand the skepticism but I think if you look at the data you can see ongoing improvements,” he said in a recent interview. “We’re miles ahead of where we were at the start of the pandemic.”
From the moment he was thrust into the job last May, Gerstenfeld has set a methodical pace for correcting the department’s lapses. He’s managed the department as it has ballooned from about 350 employees before the pandemic to about 1,500 now.
From paying self-employed workers to adjudicating complicated claims to paying workers for their first week after their layoff, Gerstenfeld has set about identifying lapses and establishing a timetable for overcoming them.
And in that piecemeal fashion, the department has slowly worked through many of its thorniest issues and gradually improved the timeline for processing and paying claims. Gerstenfeld has won bipartisan praise from lawmakers for his responsiveness and accessibility as the department has accelerated billions of dollars in payments to jobless Oregonians.
After months of delays, Oregon made steady progress through the winter at addressing backlogged claims. Last month, the department said it was processing 99% of new claims within three weeks (though actual payments sometimes took longer.)
Challenges Return
However, things turned south again in the spring, as people who had been unemployed for a year began saw their benefits expire and began seeking to enroll in other programs that would extend their aid. That produced a flood of new questions and calls, and a fresh set of delays.
Instinctively conservative, Gerstenfeld has resisted taking bold steps like a callback system for workers seeking to have their questions answered. He held off committing to pay a weekly jobless bonus former President Donald Trump authorized last summer.
When businesses that laid off employees during the pandemic were hit with sharp payroll tax increases, Gerstenfeld balked at reforms to the system that collects taxes to pay jobless benefits. He warned that could put the state’s trust fund at risk, but eventually came around and worked with lawmakers to craft a plan that will save employers $2.4 billion over a decade.
Fraud has been a constant threat during the pandemic in Oregon and in other states. Identity theft is up tenfold but Gerstenfeld has refused to disclose how much Oregon has lost to fraud during the pandemic, or address what the state is doing to stop thieves who steal the identities of state employees to make false jobless claims.
Gerstenfeld says that providing any information about fraud could make the state a target but lawmakers are exasperated by the secrecy, noting that Washington, California and many other states have disclosed their fraud losses and the steps they are taking to stop the thieves.
“They’re not being clear. They’re not being transparent. They’re saying, ‘Just trust us.’ And I don’t think that serves people,” said House Republican leader Christine Drazan, R- Canby.
Fresh problems this spring with the department’s computers, phones and responsiveness have made it clear that Gerstenfeld’s reforms haven’t overcome the agency’s fundamental shortcomings.
Communication lapses have been the department’s defining failure, Drazan said. She said the erroneous instructions and confusing information automatically mailed out by the state’s unyielding, obsolete computers have added to Oregonians’ stress, anxiety and confusion.
“My constituents were being directed to do things that the agency knew would fail,” Drazan said. “And that is inexcusable, from my perspective.”
And yet Drazan credits Gerstenfeld with making enormous strides to coral the department’s bureaucracy and being candid about its shortcomings – a marked contrast to the leadership in that preceded him.
“He was so much more clear and responsive,” she said. “That, all by itself, is progress.”
While Gerstenfeld has played an essential role in managing the employment department through the crisis, Drazan said she considers him a “transitional leader.” As Oregon plans for a post-pandemic future, she said the employment department needs a more dynamic leader who has a vision for how to change the department and make it more responsive to the people it is supposed to serve.
“I think they will need to look beyond Mr. Gerstenfeld, though he has done a yeoman’s job, in the next few months,” Drazan said.
The governor said she won’t make a decision on permanent leadership until sometime after the pandemic has receded. In the meantime, Brown directed the department to set a timeline for improving its phone systems and adding clear, concise instructions in outgoing mail to counter the automated and outdated information the computers generate.
The department is finalizing a contract with a vendor to replace those antiquated computers and Brown said she hopes it will be signed by the end of May. And the governor said she will look to a pending departmental audit by the secretary of state for guidance on the future of Oregon’s jobless benefits program.
“It is my hope that this will help provide a roadmap for how we can be better prepared for the future and lessons learned from the pandemic,” Brown said.
This won’t be Oregon’s last recession, and whether it’s economic turbulence, wildfires or earthquakes, the governor said she wants to begin the process of preparing the state to better cope with catastrophe so it can be an engine of recovery rather than an impediment to it.
“Our agencies have to be more resilient,” Brown said. “They have to be more nimble and flexible. And they have to be able to adapt quickly.”
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