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Oregon Employment Department says about half of unemployment claims yet to be paid out

Wednesday afternoon, Oregon Employment Department leaders discussed the agency's challenges and its new strategy to process tens of thousands of backlogged claims.

SALEM, Ore. — Editor's note: This story has been updated with information about the number of unpaid claims.

Unemployment rates are soaring as a record number of Oregonians have lost their jobs. 

But while trying to get the assistance they so desperately need, people keep running into obstacles. For months, we've been hearing from thousands of Oregonians frustrated and stressed about filing for unemployment. 

Many have been waiting weeks for benefits to be paid out, while others can't even get through on the phone. In fact, 38,000 Oregonians are currently still waiting for their initial general unemployment claims to be processed. 

That number does not include Pandemic Unemployment Assistance (PUA) claims, which is a program for people who are not eligible for regular unemployment insurance (i.e. independent contractors, many gig workers).

Wednesday afternoon, Oregon Employment Department (OED) Director Kay Erickson and David Gerstenfeld, a division director with OED, testified about the agency's response during a virtual meeting of the Oregon House Interim Committee on Business and Labor. This was the first time we've heard from Erickson directly since the crisis began.

"Like unemployment agencies across the nation we were not ready for the incredible and unprecedented workload,” Erickson said in the committee meeting. “To our customers: I know in these uncertain times waiting for confirmation can be agonizing. For the thousands still waiting I do apologize."

According to OED, more than 400,000 Oregonians have filed for unemployment insurance benefits in the span of just two months after historically low unemployment.

Erickson and Gertenfeld told lawmakers Wednesday the state has processed 91-percent of all initial claims so far, but obviously there is still work to do. Again, that number does not include Pandemic Unemployment Assistance (PUA) claims.

The state struggles with an antiquated and underfunded unemployment insurance system; OED leaders said they received less in federal funding than it takes to run the program in normal times.

Gerstenfeld told lawmakers just because a claim has been processed does not mean every one of those people is receiving benefits; it can take weeks to process claims and once a claim is processed issues can arise that pause it.

According to Gerstenfeld, more than 440,000 distinct people have filed claims for benefits since March - not including PUA claims and some people filed multiple claims. Of those, Gerstenfeld said a little over 55% - about 220,000 people - have received unemployment payments from OED. 

Of the people who haven't yet received money, OED says many just filed in the last couple weeks and their claims are currently being processed or they haven't had a week in which they can receive benefits. Among those who haven't yet received money, tens of thousands were denied regular unemployment because they were not eligible and have since filed for PUA.

RELATED: Emergency pandemic unemployment benefits now available in Oregon

Rapidly hiring hundreds of new employees while simultaneously learning all the intricacies of the new pandemic unemployment insurance programs and integrating the rules into OED's system have proven to be the employment department's core challenges. PUA, for example, covers many different groups of workers and OED says it is difficult to create a process to fit everyone's situation.

“We have not just many times the number of claims that we normally do and not just different circumstances than we normally do, but the additional programs that have added layers and layers of complexity,” Gerstenfeld told the committee, “And we are asking people who have worked for us for just weeks to be able to quickly navigate those systems using our current technology.”

Common barriers with the onslaught of claims during the pandemic include the longer, more involved process of accounting for wages made in other states; investigating whether the individual is a contract worker or employee; and for some, a worker's reason for being unemployed may disqualify them from receiving benefits.

The employment department went over a lot of information in the meeting - so much that lawmakers didn't even have time to ask follow-up questions. The committee chair said lawmakers will have to send them over to OED this week. 

Erickson discussed how the department is trying to improve their response by creating a new strategy called Project Focus 100.

WATCH: Oregon Employment Director testifies in front of legislative committee

RELATED: Oregon Employment Department director to testify in front of legislative committee

The goal is to process 100% of the 38,000 backlogged claims as soon as possible to get Oregonians the help they need.

OED plans to accomplish this goal by:

  • Continue hiring more staff to process claims quicker
  • Have the most experienced workers focus on the oldest and most complicated claims
  • Communicate about the status of people's more frequently
  • Use technology to improve and speed up service. The department says it's found ways to move claims out of processing traps.

The House Republican Caucus sent a statement, frustrated lawmakers couldn't ask live questions.

"I am incredibly frustrated that lawmakers were not given an opportunity to ask questions of the department’s leadership, including how we ended up in this mess, when the agency realized they had a problem, were they given notification of the governor's executive orders which essentially put tens of thousands of Oregonians out of work overnight, what took them so long to respond and when - exactly - can unemployed Oregonians expect to receive the benefits they have earned,” Oregon Rep. Shelly Boshart Davis (R- Albany) said in a statement. 

“This is just the latest glaring example of lack of accountability under our state’s leadership. This is a deeply human crisis and the state has failed miserably. Oregonians deserve answers.”

Unemployment rates are soaring

The number of initial unemployment claims has dropped off since the beginning of the pandemic and Gerstenfeld said they are hovering right at peak levels during the Great Recession. To put the economic crisis into perspective: OED said at the peak of the recession in 2010 Oregon saw about 150,000 jobs lost; in the span of just two months we've seen more than 400,000 jobs lost.

Every county in the state saw jobless rates increase over the past couple months.

Monthly unemployment rates increased by 10% or more in 18 of Oregon’s 36 counties. 

Lincoln County had the largest increase at 21.5%. Counties with the smallest changes in unemployment were Wheeler, Morrow and Harney counties.

Lincoln County saw the highest unemployment rate in the state at 26.2%. Clatsop, Union and Coos counties also had some of the highest jobless rates in April.

Wheeler County had the lowest unemployment rate not seasonally adjusted. Morrow, Malheur and Lake also saw some of the lowest rates last month.

Non-farm payroll employment dropped dramatically compared to this time last year in every region of the state. Most job losses have been in the Coast region, followed by Central Oregon. The Willamette Valley, Southern Oregon, Eastern Oregon and the Portland metro area also had high job losses.

Portland area job losses

New numbers show the Portland metro area’s unemployment rate soared to 14% in April as economic ramifications caused by measures to combat the coronavirus hit the region. That percentage was not seasonally adjusted.

OED says this is the highest rate since comparable records started in 1990.  

Seasonally adjusted unemployment rates are not yet available because of "extraordinary processing demands," OED says.

In March, the Portland metro area hit record-low unemployment numbers. But after measures to contain the spread of COVID-19 were put in place, the number of people living in the metro area who were jobless almost quadrupled to 186,300 in April.

RELATED: Oregon unemployment rate soars to record 14.2% in April

As business were forced to close or scaled back operations to help with social distancing, 157,800 jobs were slashed last month. Combined with March, that adds up to 163,500 jobs cut, wiping out six years of job growth. 

Every major industry was hit: leisure and hospitality cut more than half of its workforce as travel and tourism came to a screeching halt. Restaurants and bars were among the first and most severely impacted.

Private health care and social assistance saw the second-largest loss with 19,000 jobs cut (12.1%) because elective surgeries, non-urgent care, dental cleaning, and eye exams were on hold through April. 

Finance and insurance industries and company headquarters experienced the mildest blows. 

OED says the Portland metro had the 28th steepest job losses over the course of those two months and sits in the middle of the pack of the nation’s 50 largest metro areas hit.

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