Want to fix unemployment systems? Try the Domino’s model

Written by Benjamin Freed

From the first weeks of the COVID-19 pandemic, state unemployment insurance systems were overwhelmed by record increases in requests for help, often pushing agencies to adopt new service delivery technologies. Some of these solutions are successful enough to be replicated elsewhere, according to a guide released last week by think tank New America.

The guide is meant to be a “game guide” for state governments to truly modernize their unemployment systems so that they are not caught off guard when another recession strikes.

“If you were just replicating the 20 Best Things States Do, you would be doing a lot of good,” said Tara Dawson McGuinness, founder of New America’s New Practice Lab and one of the report’s authors. “Unemployment insurance has helped millions of people get through this pandemic. But the peak showed that we need to do more to make this really work and to make us want help. “

“You can give people their status”

One of the solutions highlighted by the report is a complaints tracking tool developed by the Rhode Island Department of Labor and Training, which officials refer to as the “Domino’s pizza follower.” Domino’s, the pizza chain, has been offering its delivery customers since 2008 a website – and later, a mobile app – that show status of their pies, wings, cheese breads and cinnamon twists from their entry in the oven until their arrival on the doorstep.

At the start of the pandemic, Rhode Island was processing unemployment claims on a mid-range IBM computer known as the AS / 400, a model first released in 1988. It was capable of processing up to 74 claims. simultaneously. But as COVID-19 increased and the economy came to a halt, the tiny state of New England suddenly had to offer benefits to 200,000 people who had lost their jobs, easily surpassing the AS / 400.

The agency found a solution by developing an automated claims recertification system on an Amazon Web Services cloud, which was able to scale to pandemic-level demand, said Marina Nitze, another author of the New America report. This new system, she said, helped shed some light on worried Rhode Islanders about when they would receive their payments.

“You don’t have to replace the mainframe, but you can give people their status,” said Nitze, who is also a former US Department of Veterans Affairs chief technology officer. “They just want to know what to do next. “

States have adopted other tactics in an attempt to make claims processing more efficient. California, where a “strike team” last year made numerous recommendations to clear a massive backlog of applications, is now sending applicants SMS updates on their status. North Carolina, meanwhile, has adopted a new process in which claim statuses that require some sort of action by the claimant – such as uploading a document – have been placed at the top of the list. queue to speak or chat online with a live agent.

Reducing people’s frustration with unemployment systems makes it easier for agencies to process claims and pay benefits, rather than dealing with multiple claims from people calling over and over again, Nitze said.

“When you have a clear claim status, you reduce frustration,” she said. “The more frustrated people are, the more they try to access different channels, so your work staff has to go through this survey 27 times.”

“There is going to be another recession”

Likewise, states should also experiment more with how unemployment benefits are actually paid, according to the New America report. In particular, the playbook advocates the prospect of same-day benefits delivered through consumer apps like Venmo or Square’s Cash App, which Michigan used in a recent pilot.

Nitze told StateScoop that these apps can make it easier to pay unemployment benefits to unbanked workers who can’t get direct deposit. But the app’s approach has yet to be perfected: According to the New America report, some unemployed Michigan workers struggled to receive their full benefits after state payments exceeded the maximum payment of Cash App, an issue made more difficult by Cash App’s lack of customer service. line.

Despite the many unique innovations during the pandemic, the New America report finds that unemployment systems in most states remain far from “modernized”. (Nitze also noted that the National Association of State Workforce Agencies defines the term “modernized” as if an unemployment insurance system can calculate benefits based on a person’s recent tax payments or income, rather than specific technological capabilities.)

The report urges state employment agencies to simplify application requirements for applicants, install system monitoring tools to help officials be aware of increases in demand, and “throttle the mainframe” with Incremental development processes – often cloud-based – rather than massive attempts to remove legacy systems. .

“There is going to be another recession,” Nitze said. “We have to develop an elastic capacity in our system, so when the next recession hits, we’re not looking for it from scratch. “


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