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Jobless claims overwhelm state offices

The unemployment rate rose to 7.2 percent in December.

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After two hours and 45 minutes, she finally got to use one of the six phones, but she had to redial 115 times to get through to a state employee.

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"I am very frustrated. I have a car payment, car insurance, and a phone bill all overdue," she says. "What am I supposed to do?"

Her story is similar to ones elsewhere. In Ohio, the Department of Job and Family Services ordinarily handles about 7,500 calls a day. Two weeks ago, it started getting 80,000 calls a day, says Brian Harter, a spokesman.

To deal with the deluge, some states are trying to hire more workers. That's the case in Pennsylvania, which this past fall started hiring 600 permanent workers and 300 temps to help it cope with a 16.4 percent increase in new claims. In addition, the state is spending more money on its computer systems. "Our servers have been upgraded and expanded, and we are now upgrading our mainframe," says David Smith, a spokesman in Harrisburg, Pa.

In addition, Pennsylvania, which may see a big boost in claims after Alcoa lays off 15,000 workers, has expanded the hours of its workers in the unemployment office. Filers can even reach state workers on Sundays.

Although claims are high nationally, they are not at their peak – reached in 1982 when 695,000 people filed initial claims for unemployment in one month.

But in prior downturns, there were more offices for people to visit to get questions answered. In fact, the states could use an extra $546 million to administer their programs, estimates the National Association of State Workforce Agencies (NASWA).

"The problem is lack of resources [to hire] more employees and [modernize] computer systems," says Rich Hobbie, executive director.

For the past two years, Rep. Jim McDermott (D) of Washington has sponsored the Unemployment Insurance Modernization Act, which includes $7 billion to expand coverage and a one-year, $500 million payment to states to improve administration. Several press reports indicate the legislation is expected to be included in President-elect Obama's economic stimulus program. It was already reintroduced last Thursday in the House.

The states, however, are split over supporting it because it would require the expansion of coverage to include such categories as some part-time workers, people who have compelling family emergencies, and workers enrolled in state training programs.

Some Republicans say they are opposed to the expansion. Some business groups, concerned their unemployment costs will rise in the future, are also against it.

Unemployment advocates, however, say the basic unemployment act, written in 1935, needs updating. "It is woefully out of date," says Andrew Stettner of the National Employment Law Project in New York. "It will give the states an immediate boost to fill a gap in their unemployment insurance programs."

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