The coronavirus pandemic has been an acid test for government, revealing bureaucratic incompetencies, unnecessary regulations—and, in Albany, an agency that has failed to perform one of its central functions.

The state Department of Labor (DOL) is a Progressive-era creation whose mission is “to protect workers, assist the unemployed and connect job seekers to jobs.” But the hundreds of thousands of New Yorkers trying to claim unemployment insurance (UI) benefits have endured weeks of problems with both the UI website and the mandatory followup phone interview.


This is an installment in a special series of #NYCoronavirus chronicles by Empire Center analysts, focused on New York’s state and local policy response to the Coronavirus pandemic.


In a radio interview on March 26, Governor Andrew Cuomo acknowledged the UI system “is not working as smoothly as I’d like it to,” and “is compounding people’s stress.” On April 6, Cuomo’s chief of staff said the state would work with Google to build an entirely new web interface.

So what went wrong? Why did it take a historic, unprecedented pandemic to get DOL to more effectively carry out its most basic function?

First, DOL knew for at least three years that its UI computer system had problems. In a June 2017 RFP, the Department wrote:

“the State has faced the pressing problem of maintaining, modifying, and extending outdated and expensive mainframe-based UI benefits and contributions systems that were written in the 1970s and 1980s and remain constrained by the technology of that era.”

The RFP also noted that “seasonal peaks” in web traffic “affect the performance of some of the web applications.” That is to say, DOL was noticing issues during weeks when fewer than 50,000 claims were being filed. The presence of multiple weak links in the system is borne out by user experiences shared on social media, which indicate the website was unreachable for some, but that for others, it failed after they’d begun or mostly completed the application process.

New York wasn’t the only state to experience UI website issues last month. But during the week ending March 21, 12 other states—including states as small as Massachusetts and Nevada—were still able to complete more claims.

And while DOL couched the surge in traffic as part of living in an “unprecedented time,” there had been four discrete events since 2010 that led to more than 60,000 people completing claims during a single week.

new-claims-5578728

The previous record number of first-time claims—63,292—were filed during the week ending November 10, 2012, shortly after Hurricane Sandy struck downstate New York. 

For the UI system to max out at a level just 26 percent above its record indicates a lack of preparedness for any economic emergency. This is especially striking considering that the number of total jobs in the state—that is to say, the number of potential UI claimants—had grown about 11 percent in the eight years since the Sandy surge.

To be sure, New York’s mandatory phone interview that each claimant must complete also limited the total number of claims—but it’s an issue separate and apart from the fact that a state agency can’t keep a crucial website functioning in 2020. And there too, DOL had problems: complaints on social media indicate the phone system was disconnecting people, seemingly at random, after lengthy waits on hold, and that the Department didn’t have a contingency plan for high call volume.

The 2017 computer system RFP required the contractor to “perform a final stress test” to ensure the system ran properly “at peak period that will be determined by NYSDOL, and demonstrate the reliability and expandability of the system.”

The real “stress test” came last month, and the Department has now chalked up three weeks of putting hundreds of thousands of New Yorkers through a needlessly unpleasant experience.

It reflected a bureaucratic culture that wasn’t concerned about customer experience. And if DOL isn’t focused on serving working New Yorkers, who is it working for?

Labor’s real boss

The state Department of Labor in recent years has effectively become an arm of the state’s labor unions, which represent a shrinking share of workers and are increasingly reliant on using state government rather than bargaining or organizing to make gains.

Labor commissioners routinely act as emissaries for the governor to important union social functions. Under Governor Cuomo, they have been implementing a policy agenda clearly shaped by the priorities of unions rather than the best interests of all working people.

In 2015, then-Acting Labor Commissioner Mario Musolino staged a “wage board” proceeding, where the three-member body’s “study and deliberations” culminated in setting a $15 minimum wage for fast-food workers. That happened to be the exact arbitrary level sought by the Service Employees International Union (SEIU)—whose leader was named to the board by Musolino—and increased pressure on restaurant operators to embrace automation instead of hiring workers.

After the U.S. Supreme Court ruled in 2018 that public-sector employees couldn’t be forced to pay union dues, Labor Commissioner Roberta Reardon took the highly unusual step of issuing “guidance” to local governments and school districts–despite having absolutely zero jurisdiction over public-sector labor relations. Reardon went so far as to tell employers to ignore an entire section of the state Civil Service Law that requires employers to have proof each employee has consented to paying union dues. The objective was clear: to keep more working men and women paying labor unions against their will.

And it could still get worse: one proposal in the Legislature would have the Labor Department policing private employers for activity considered to “communicate anti-union thoughts.”

No policy has been as far-reaching, however, or had as many adverse consequences as the Labor Department’s ongoing deliberate and unlawful interpretation of the state’s so-called “prevailing wage” law, which sets minimum pay and benefit levels on public works jobs. 

Instead of calculating construction workers’ actual average wages and benefit levels, DOL forces local governments, school districts, and other public entities to abide by terms set in union contracts—even in areas where it’s evident unions don’t represent an especially large share of employees. That leaves municipalities paying more for infrastructure, performing fewer public works projects, and putting fewer people to work. It’s lose-lose for everyone–except for New York’s building trade unions, who rely on prevailing wage to keep their underfunded pension plans from capsizing.

All of these activities have distracted the Department’s traditional charge of upholding state wage and safety standards, helping people find jobs, and—last but not least—running the unemployment system.

State lawmakers owe it to the New Yorkers to find out why our unemployment insurance system melted down—and to remind the Labor Department who it’s supposed to be working for.

About the Author

Ken Girardin

Ken Girardin is the Empire Center’s Director of Strategic Initiatives.

Read more by Ken Girardin

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