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Jobless claims overwhelm state offices

The unemployment rate rose to 7.2 percent in December.

By Ron SchererStaff writer of The Christian Science Monitor / January 12, 2009

Commuters in Boston emerge from the South Station rail hub, many of them headed to jobs in the Financial District. Overall, however, the US economy lost 524,000 jobs last month.

Joanne Ciccarello - Staff

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New York

Officials at state unemployment offices say they've never seen anything like it: Layoffs are happening so fast that those seeking unemployment benefits are overloading state computer systems, jamming phone lines, and making it necessary for administrators to hire temporary workers.

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In some states, it's so bad officials suspect that only half the calls are getting through. Frustrated, the unemployed are e-mailing anyone they can find at the state agencies or are just hitting redial on their phones, sometimes hundreds of times. The problem will get worse before it gets better, say some officials.

"For the last six weeks, we have seen the highest [number of] weekly claims since we've been keeping records in 1985," says Mike Cullen, Colorado's unemployment insurance director.

"And they are increasing at an increasing rate," Mr. Cullen says.

Last Friday, some of this surge at state offices was reflected in the Department of Labor's monthly jobs report: In December, it said, the unemployment rate hit 7.2 percent, up from 6.7 percent in November. And employers shed 524,000 workers after letting go of 584,000 in November.

The job-loss total for all 2008 was 2.6 million, the most since 1945.

"What we are seeing is a portrait of an economy that is cratering," says Stuart Hoffman, chief economist at PNC Financial Services in Pittsburgh. "This explains why holiday sales were so weak, with people so concerned about their jobs, and why consumer confidence is so low."

Usually, if individuals qualify for unemployment insurance, they go online to apply or call their state bureau responsible for processing the paperwork and paying them. However, even the online networks are having challenges. Last week, three states – Ohio, North Carolina, and New York – reported computer problems. Online systems in many other states are slowing because of the sheer volume they are handling.

Although many states have offices to help individuals look for jobs, the state employees there usually cannot help someone applying for benefits.

"We let [the employees] do a simple task on [the office's] behalf, but we don't want them to give out bad information," says Cullen, whose state no longer has offices for those filing for benefits.

Yet many times, the unemployed need to talk to a real person.

That was the case last week for Danielle Saxon of Elk Grove, Calif., a suburb of Sacramento. In October, she lost her job at a company that does home renovation. But her claim form disappeared in the mail, and for two weeks, she was unable to get through to anyone in the state Employment Development Department (EDD).

Finally, after missing two unemployment checks, she drove to a state office with six phones that would ring through directly to state workers. As she waited in line to use one of the phones, she tried to reach someone on her cellphone – in 86 separate calls.