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Jobless benefits mess hurts workers, economy

Oregonians thrown out of work by coronavirus restrictions and then left without unemployment benefits are paying the price for years of failed leadership from state officials who should have fixed a broken system but didn’t.

Those officials include Gov. Kate Brown and her two predecessors, Ted Kulongoski and John Kitzhaber, plus a succession of Oregon Employment Department directors, the last three of whom were fired or forced out.

An in-depth analysis by The Oregonian details the state’s failure to upgrade a computer system that uses 1993 technology, despite securing $80 million in federal money to pay for it — in 2009.

When Kate Brown was secretary of state, her auditors issued reports sharply critical of the department’s culture and its technology. Lawmakers were told as early as 2012 that the computer system desperately needed replacement, but nothing was done. That year and again in 2015, auditors warned that the system could not handle a surge in claims or respond to changes in federal programs.

All that came to pass when the pandemic hit, and Brown ordered the economy shut down. But despite early indications that emergency unemployment benefits were not reaching those who needed them. The system could not handle even regular claims for benefits, which soared from a few thousand a week to 89,000. The department also was unable to accommodate the expansion of eligibility to include self-employed people.

Congress also gave the states money to waive the one-week waiting period for benefits, but Oregon’s ancient computer system couldn’t handle that change. Hundreds of millions of federal dollars can’t be delivered to those who need them.

This colossal failure didn’t hurt just jobless workers. It has cost the state’s economy as well. Those at the bottom of the economic ladder — especially those who suddenly lose their income — spend every dollar they can get on necessities such as food and shelter, which helps the businesses and landlords who provide those necessities.

All of this started happening in March, but Brown took no action until the end of May, when she fired the director she had hired in 2016. The new director, longtime department manager David Gerstenfeld, has reportedly been far more open with the media and with the public in his two months on the job than his predecessor, Kay Erickson. That’s a plus, but it won’t replace the computer system or get benefits to claimants any faster.

While the department has finally processed nearly all its outstanding claims, Gerstenfeld says tens of thousands that must be “adjudicated” remain unpaid. Exactly how many is not clear.

And those “waiting week” payments? Still unpaid. If the department can’t figure out how to do that by the end of the year, it could lose the federal money — maybe as much as $300 million.

That’s $300 million Oregon’s unemployed workers — and its battered economy — could put to good use.

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