Aging tech means raises for some Americans who lose jobs in coronavirus crisis


WASHINGTON (Reuters) – Some lower-paid U.S. workers could effectively get a short-term raise if they lose their jobs during the coronavirus crisis, thanks to government computer systems that rely on 1950s-era technology.

Aging state mainframes do not have the ability to calculate different payments per worker, which is why the lawmakers who crafted the $2.2 trillion stimulus package opted for an across-the-board increase of $600 for each worker — an unprecedented expansion of the U.S. safety net.

That move sparked a brief revolt earlier in the week by a group of Senate Republicans who argued that it could push workers out of jobs.

But even that one-size-fits-all benefit boost will sorely test the state bureaucracies tasked with putting it in place, experts say.

“Right now I’m worried about states just processing all the claims they need to process, much less having to go in and reprogram their computers,” said Michele Evermore, an analyst at the National Employment Law Project.

State unemployment systems are already struggling to keep up with the deluge of applicants as businesses across the country shut their doors to minimize the spread of the pandemic, which has killed more than 1,000 people and infected more than 75,000 across the United States here

Weekly jobless claims spiked to more than 3 million last week, more than four times the previous record set in 1982. Applicants say they have encountered downed websites and long phone waits.

States will have to reprogram their computer systems to provide the new benefit. More than half, including California, New York and Pennsylvania, still rely on decades-old mainframe systems based on the COBOL language first introduced in 1959.

Past benefit increases have proven difficult. Many states had to set up separate payment systems to handle a $25 weekly increase in 2009, leading to higher administrative costs, according to a review by the W. E. Upjohn Institute for Employment Research.

Congress could avoid those headaches by simply giving states more money and letting them decide how to use it, said Matt Weidinger of the conservative American Enterprise Institute.

But states probably have saved their computer code from the 2009 increase and should be able to quickly deploy it to handle this $600 increase, said Andrew Stettner of The Century Foundation, a progressive think tank.

The benefit boost “is going to be the most impactful thing that came out of this bill. It’s going to keep families whole and that’s going to be so vital for the economy,” Stettner said.

Conservatives warn the increase could pay some low-wage workers more than they earned on the job — which they contend carries the risk of inadvertently driving up unemployment.

Republican Senator Ben Sasse and others who opposed the uniform benefit say they will continue their efforts to change it, even after the bill passed the Senate in a 96-0 vote on Wednesday. The House of Representatives is due to vote on the measure on Friday.

Economists, meanwhile, warn that Congress may need to extend the increase further when it runs out in four months.

“It’s very likely that all is not going to be returned to normal by the end of July,” said Dante DeAntonio, a senior economist at Moody’s Analytics.

Reporting by Andy Sullivan in Washington and Jonnelle Marte in New York; Editing by Scott Malone and Daniel Wallis

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