Memories of a Recession Past

by Malcolm A. Kline

This recession reminds me of the last one, when I was working in an unemployment office. President Reagan, too, had extended unemployment benefits as an answer to a recession, then extended them again, leaving the unemployed eligible to collect an entire year of benefits. Many remained unemployed for a year. While working in that Pennsylvania office in the summer of 1983, I began to wonder if there was a connection.

The unemployed apply for compensation from state agencies that process their claims and pay them their weekly benefit checks. Though funded to a great extent at the Federal level, unemployment compensation is distributed by state offices.

One of my first tasks involved learning three sets of initials-UC, EB, and FSC. UC stood for the threshold 26 weeks of unemployment compensation. Both EB (extended benefits) and FSC (Federal security compensation) were funded by the federal government. EB lasted 13 weeks, FSC another 13.

I drag in the last two acronyms because my job depended on them. We were "intermittent intake interviewers" (III's) whose salaries were paid by Uncle Sam.

The goal or standard for III's was to pay a certain level of initial claims for extended unemployment benefits, so we paid them. In fact, we had a lively competition to do so.

Our office paid benefits to, and examined the claims of, residents of the other 49 states who filed claims against Pennsylvania companies. To keep straight who was working on which state's claims, the office was divided by state signs that made it look like a political convention. Every Friday, in convention-like fashion, our supervisor announced which section paid the most initial claims. The New Jersey section, very hospitable to initial claims, usually won.

Like many anti-recession programs, the extended unemployment benefits of 1983 took effect just as the economy was turning up. Although we were nominally "temporary" employees, hired to handle a heavy claims load in a recession, many stayed on long after the recovery began, since extended benefits remained in place.

The claims load lightened considerably when extended benefits ended and still more when unemployment benefits became fully taxable, thus creating an interesting set of incentives.

"Since the availability of UI [unemployment insurance] benefits may create a disincentive to search for and accept re-employment, the UI system encourages recipients to seek work by imposing various administrative requirements," the U.S. Department of Labor told us.

"All recipients are required to be able and available for work; in most states, recipients who are not job-attached are expected to look actively for work, and they are often required to list job-search contacts when claiming UI benefits."*

Few caseworkers followed up on these "listed job-search contacts." If they did, they would discover, as I did much later, such phenomena as race horses with "Inc." added to their names. Salesmen working on commission frequently collected benefits. In taprooms and other meeting places, steelworkers spoke of unemployment compensation as "a paid vacation to go deer hunting." Claims and demands for benefits were the norm and occupied most of our time.

The exception was the Asian immigrant who mailed us a thank-you note for the two weeks of unemployment compensation she received before landing another job. She just didn't understand the system.

More predictable was the applicant who called to complain that he had to wait three hours at an unemployment office to file a claim for his weekly check and then wait another week to get it.

"You poor stiff," his less-than-understanding caseworker told him, "I've got to work 40 hours a week to collect my check!"

The addictive nature of unemployment benefits came home to me when I followed up on a letter we received. A man who worked in the print shop at The Philadelphia Bulletin before that newspaper folded ran out of unemployment benefits and decided to enter a seminary.

At the time, the unemployed could continue receiving benefits if they were retraining for a new position. The budding seminarian told me, "Well, you can collect benefits if you're retraining for a new position, and I figure that's what I'm doing." We denied that claim.

In Pennsylvania, every state agency is a union shop. Arrivals after 7:30 AM were frowned upon, but so were departures after 4:30 PM, since overtime had to be approved.

Two 15-minute breaks supplemented the mandatory one-hour noon lunch. The morning break came at 9:45, the afternoon break at 2:45.

One morning at 9:40, I eyed a letter requesting a telephone response. I was about to dial when I noticed the time, then said aloud, "Aw, the hell with him; it's five minutes till break."

An office veteran at the next desk said: "I'm proud of you, Malki. You're starting to think like a state employee."

That's when I had to leave.

*A Study of Unemployment Recipients and E;Exhaustees Findings from a National Survey (U.S. Department of Labor, 1990), p. 114.