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Tess Vigeland: The unemployment rate in this country shot to 8.1 percent last month, a 25-year high. Some 4.5 million people have lost their jobs since the recession began in December '07.
Once folks are laid off, the next stop is the unemployment office. Unemployment insurance is a federal-state program funded by payroll taxes. It's a safety net that dates back to the Depression. But as Marketplace's Jeff Tyler tells us, that net is getting stretched to capacity.
Jeff Tyler: Most states no longer have unemployment offices where you wait in a long line to apply for benefits. It's all done over the Internet or the telephone. But there's still a line.
Unemployment office automated message: We expect to be able to take your call in approximately 42 minutes.
There's so much demand that the automated phone systems are crashing.
Andrew Stettner: Many states are serving twice as many people as they were a year ago.
Andrew Stettner is deputy director of the National Employment Law Project. He says overburdened states are having trouble processing all the claims.
Stettner: The claims load is through the roof from Nebraska to New Hampshire. I mean, it's really everywhere.
In Chelmsford, Mass., software engineer Peter Nelson was laid off after 22 years on the job. So he called Massachusetts' division of unemployment assistance.
Peter Nelson: Based on my social, it told me to call back the following Thursday, because that was the day for people with my social security number to apply.
On Thursday Nelson called back.
Nelson: There was a message that said their system was too full, and I should call back some other time. Now, remember, I only had this one day to do it. So I tried several more times that day, with the same result.
For problems like this, Andrew Stettner recommends reaching out to your local union or state legislator or member of Congress.
Stettner: All of those people will have another line into the Department of Labor. And it's not fair or right that someone who complains to a number of places gets their problem resolved faster, but it's just the way it works in reality.
Not always. Peter Nelson contacted his state representative. That got him a call back from an official who personally walked him through the automated phone system.
Nelson: She put me into the queue. I waited in the queue for 64 minutes. And then I got the same message saying that they were too full and I'd have to call back another time.
Eventually, he did get through and completed the application process. The lesson? Advocate Andrew Stettner says, in general, you're better off applying online.
Stettner: Even if you're someone who doesn't have good Internet access or have trouble with it, go to a library and try to get some help. You're going to have more luck filing and certifying online than you have by going in by the phone.
Once you're in the system, you're not necessarily out of the woods. Last January, Todd Krost applied for benefits in Michigan. He was told to expect a check in seven to ten days.
Todd Krost: Well, ten days passed, and no check in the mail, or no direct deposit into my bank account.
When he finally reached a person, he was told that unemployment claims were taking six to seven weeks to verify.
Krost: They say that they will back-pay me, but, you know, the bills didn't stop coming in.
Delays have been even longer in other parts of the country. In Florida, some have waited for months. Many states don't have enough workers to process all the checks. The federal stimulus bill will help reduce that backlog --
it provides millions for states to hire more people. But it won't protect you if there's a problem with your application. Stettner says people aren't necessarily notified if something's wrong. They'll receive unemployment benefits for a few weeks, and then, suddenly, the checks stop.
Stettner: You could be in a Kafka-esque nowhere zone. Something is stopping your benefits, you can't figure it out, and you can't get in touch with anyone.
In California, problems are resolved here, at the Unemployment Insurance Appeals Board. Manuel Lopez made a mistake on his application. When asked if he'd looked for work that week--
Manuel Lopez: I put 'no' because I had to go to the social security office and take care of all my social security. I was just honest.
The mistake cost Lopez two-weeks of benefits worth about $900. In other parts of the country, it can take up to a year to resolve an appeals claim. Others are forced to wait even if their claims are considered valid. You typically can't collect unemployment benefits if you're also getting severance payments. Peter Nelson discovered a way around this. His former employer asked him to sign a 'Release of Claims.' Basically, it's a promise not to bad-mouth the company.
Nelson: At the time, I was actually kind of grumbling. I was saying, 'Why do I have to sign this? I would never disparage them.' But they said, sign it anyway. And I did. And it turns out they did me a big favor.
In Massachusetts, by signing that Release of Claims, Nelson can collect his severance and his unemployment benefits at the same time. At least hypothetically. Because of the backlog, he expects the unemployment benefits
will kick in just about the time his severance runs out.
In Los Angeles, I'm Jeff Tyler for Marketplace Money.