‘It’s a travesty.’ Ky’s unemployment system continues to trip up those who need help the most.

Last week, we learned that planned upgrades to the state’s constantly struggling unemployment insurance system would be delayed even longer because the state had to cancel a planned contract with a company that stopped returning its calls.

Whoops! Turns out the Education and Labor Cabinet officials had hired a company called Sagitec based in Saint Paul, Minn. But the Kentucky officials started to worry they were being ghosted. They canceled the contract, then they found out that two of the company’s principals had been recently indicted by a federal grand jury. That means the cabinet has to start all over, pushing off any computer modernization for another two years.

But why should today be any different? Unemployment is one of those topics that we forget about until we really, really need it, and then we realize how much the state of Kentucky has really, really screwed it up. Remember the mile-long lines we saw outside the state Capitol in June 2020 as thousands who lost their jobs due to COVID-19 tried to get help? Only crisis shows us the extent of the problems, and by then, only the most vulnerable citizens are affected. Elected officials don’t have to depend on the insurance payments to eat and pay rent.

Just ask Natalie White. She’s the single mother of two, one of whom is special needs. She worked at a Lexington bar until it shut down in March of 2020 when COVID swept the state. She had paid into the system for years, so applied and was granted unemployment until her workplace reopened and she could return to her job. She’s one of more than a million Kentuckians who filed for the insurance during COVID.

Then this summer, White received a letter telling her she owed $15,000 back to the state. Apparently she missed the deadline to fill out a waiver to continue getting payments even though she was in good mental and physical health. She needed to work in the evening in order to take care of her kids and couldn’t find another job during COVID. She soon figured out that the state had mailed her the documents after the waiver deadline had passed. The bill is now up to $29,808. Think about that. A bar manager who somehow has to find $29,000 to pay back a system that was supposed to support her in the midst of crisis. White showed me the morass of paperwork she has had to deal with, and described the phone calls that aren’t answered and emails that aren’t returned.

The system is incomprehensible and it’s incomprehensible that we expect so many people to wade through it.

“They do it on purpose to confuse you and keep you trapped,” White said. She has heard of many other people in the same situation but always for different, tiny reasons. And while there are always fraudsters, “there’s no way this many people messed up or took advantage of the system.”

Decades of neglect

The worst part of all of this is that it didn’t have to happen, but is the result of negligence and bad decisions for more than a decade by politicians and policy makers of all stripes.

We could have fixed it in 2011, when the Obama administration offered money to states to upgrade their systems after the Great Recession of 2008, according to Jared Bennett of the Kentucky Center for Investigative Reporting. The American Recovery and Reinvestment Act promised states funding “if they adopted reforms to cover more part-time, seasonal workers and anyone leaving a job for a compelling personal reason, such as domestic violence or a family move.”

But Kentucky wouldn’t make those changes because it would have cost businesses more. So they left $90 million on the table and continued on with an archaic system. Kentucky was one of only 11 states that chose not to do the funded upgrades.

It didn’t help when in 2017, then-Gov. Matt Bevin, constantly trying to shrink the size of government, closed 31 regional UI offices, leaving just 20 statewide.

And we saw exactly how well that worked in 2020, when the system was flooded again. Now we may be facing another recession, and we’re two more years away from upgrades. In addition, one of the General Assembly’s top priorities, House Bill 4, will cut benefits even more, promising only six weeks of payments to those who lose their jobs. Previously, workers could get up to 26 weeks.

“It’s an absolute travesty,” said Jason Bailey of the Kentucky Center for Economic Policy. “When you think about how much suffering there has been because of these decisions, it’s horrific.”

Bailey further pointed out that while there are many who think government is too big and cumbersome, ignoring its most basic services hurts the most vulnerable among us. But that also hurts all of us because people who can’t buy groceries or pay rent are a drag on the entire economy. All because of an outdated computer system.

Natalie White is facing several appeals. A lawyer turned down her case, and ultimately, she may lose because she didn’t keep up with the arcane rules and was not able to find the help she needed to comply with them. So then we’ll have a mom requiring even more government help because she has a debt she owes the government that is supposed to help her.

An employment spokeswoman said she would look into White’s case, and sent general information about the waivers, which people must fill out to continue getting payments.

I’m sure that unemployment employees are also frustrated with the computer system and by not having enough staff to help all the people who need it. The villains, as always, are those least affected, the politicians and policy makers who create these systems in the first place.

White knows she has taken a risk by contacting the press. But as she said, “I just want to be a voice for all these people who are going through the same thing.”

If you are continuing to have problems with Kentucky’s unemployment system, contact Linda Blackford at lblackford@herald-leader.com.