Report: In Wisconsin, Black applicants were half as likely as white applicants to get pandemic unemployment assistance

MADISON, Wis. — A federal government watchdog agency released a report Tuesday urging the U.S. Department of Labor to examine racial disparities in how pandemic unemployment assistance was paid out in Wisconsin and other states.

The report was one of two released Tuesday by the U.S. Government Accountability Office related to pandemic unemployment, with another finding rampant risk for waste and fraud amid antiquated state-administered unemployment systems across the nation.

Wisconsin was one of two (out of four states studied) where the GAO found that white applicants got their pandemic unemployment assistance (PUA) benefits paid out at about twice the rate of Black applicants, with a similar pattern for American Indian and Hispanic applicants as well.

The federal PUA program was one of several federal unemployment benefits during the pandemic, targeting self-employed and part-time workers for unemployment benefits as well as people who lost jobs for reasons directly related to the pandemic but who would not otherwise qualify for benefits.

The states showing racial disparities between white and Black applicants were Wisconsin and North Dakota, according to data gathered by the GAO. New York showed similar rates of payouts when broken down by race and ethnicity, while Louisiana had higher rates of payouts to Black, Asian, and American Indians.

Underlying reasons behind the racial disparities are unclear, the report noted.

“Various factors could explain the disparities, and the data we analyzed did not allow us to examine potential causes,” the agency wrote in the report. “If the underlying causes of inequities in PUA receipt are systemic or indicative of insufficient program integrity controls, they may also affect the regular UI program.”

The report also noted that most states started paying out PUA claims by the end of May 2020, with claims remaining high through mid-2021. Wisconsin and other states faced massive IT and staffing challenges, leading to payment delays.

Unemployment in Wisconsin through the pandemic

Wisconsin’s Department of Workforce Development, which administers unemployment insurance in the state, is currently in the middle of massive upgrades to modernize its 50-year-old system after backlogs of unpaid claims piled up early on in the pandemic, leaving thousands waiting weeks or months to see benefits paid out.

Gov. Evers fired secretary Caleb Frostman in the fall of 2020; under current secretary-designee Amy Pechacek’s watch, the system was updated so applicants could upload supporting documentation online rather than through fax or mail, among other changes and help from outside contractors that largely cleared initial backlogs.

Some issues have continued, with people whose claims included errors or other issues waiting months more on appeals or facing steep debt to the state from overpayments.

In an email to News 3 Now Tuesday afternoon, DWD communications director Jennifer Sereno said the agency “strives to make Wisconsin a fair and just place for all people to live and work. This includes eliminating racial and ethnic disparities while advancing equity and economic opportunity through workforce development.”

“PUA was a new federal program with entirely distinct eligibility criteria,” she wrote. “Disparate access to information, technology, documentation, and challenges with validating applicant information can affect the implementation and outcomes of support programs.”

The agency is moving ahead with a number of initiatives aimed at making the unemployment benefits application process fair and easily accessible, Sereno added. Plans include efforts to make the application more accessible to those without internet access, updates to the portal allowing documents to be uploaded rather than mailed or faxed and an initiative to simplify language used in applications.

Federal recommendations

The GAO recommended that the DOL examine permanent unemployment benefit programs for workers who don’t otherwise qualify for benefits (PUA benefits for self-employed and other typically-ineligible workers ended last year.)

The DOL agreed with the recommendation, but only partially agreed with another GAO recommendation to examine racial inequity in the PUA program, arguing that an examination of the now-ended program would interfere with ongoing work to investigate inequity in regular unemployment benefit programs.

In a second report released on Tuesday, the Washington Post reported findings that unemployment benefit programs, administered at a state level across the nation, were at “high risk” for waste, fraud and abuse.


Gao Report

Screenshot of racial disparities broken down by state from the U.S. GAO report on racial disparities in PUA claims during the pandemic