Millions of Americans are becoming painfully aware of the old and inefficient technology operating our unemployment benefits system. Crashing websites and applications sent into a cyber void were just some of the issues plaguing users these past few months.
Even before COVID-19, you would likely have been disappointed if you visited one of the Department of Labor’s American Job Centers. These offices are the backbone of the unemployment system, a one-stop center providing “an integrated array of high-quality services so that workers, job seekers, and businesses can conveniently find the help they need under one roof.” More than just a physical location to file for unemployment, these offices offer a mix of government representatives, contractors and other community partners providing training and employment services. Unfortunately, the experience of signing up for one of the available programs can be more work and time than its worth.
Imagine a single mother, whose unemployment benefits expired, entering an American Job Center looking for work. The paperwork heavy process to confirm her identity, learn what programs she qualifies for and finally connect the applicant to employers can take hours or even days, especially if her paperwork is not in order. The experience is belittling and can often leave the applicant bitter and cynical. For a member of the working poor who may lack financial savings and the social capital to endure extensive unemployment, this experience is one more instance of a failed system supposedly designed to help the less fortunate.
Governments fund an extensive informal public-private partnership network dedicated to assisting the unemployed. However, these networks rest on technology that is anything but user-friendly causing frustration and eventually distrust among job seekers, employers, and government agencies. Recent advances in blockchain technology offers solutions to the problems plaguing these workforce development ecosystems. Just as banks are leveraging blockchain technology to help the “unbanked,” this same technology can be used to assist high risk job candidates.
An American Job Center with modernized systems will allow it to exist on the same blockchain as local training centers, employers, and government agencies. Job center representatives can not only verify the identity of the applicant, but they can inform that person about free training programs and inform employers that they have a candidate who qualifies for a city funded wage subsidy and a state funded tax credit. The experience is improved for everyone involved.
A multitude of government programs exist to assist the unemployed. Subsidized wages, workforce development programs and tax incentives for employers are just some of the ways governments try to help. Unfortunately, lack of trust impacts these efforts. Businesses do not trust the government agency to provide the advertised incentive while job applicants are fearful of disclosing their shortcomings to employers. Able bodied adults turn to welfare, disability, and off-the-books work to survive. The result is a lose-lose for everyone, including taxpayers funding these programs.
Technology can be leveraged to address transparency and credibility between the parties. If a person’s long-term unemployment status qualifies the business that hires him for a wage subsidy, then that person is incentivized to submit an honest resume. If the business is confident that the government will also pay timely, then that business has a real incentive to hire the applicant. As they now exist, these programs are often reliant on antiquated technology that makes collaboration and integration with outside systems very difficult in even the best circumstances.
The federal government spends about $17 billion a year on workforce development programs, which goes to a mix of states, cities, and community partners. Awards are distributed based on who has the best proposals for use of the funding, which typically focuses on case management and job placement strategies. There is little discussion on the type of data management systems and ability of agencies to digitally coordinate services. Including the effectiveness of the technology being used in the proposal process can incentivize agencies, companies and non-profits involved in workforce development to upgrade their systems and begin better data sharing strategies.
The “DMV experience” when interacting with government agencies is expected, but it does not have to be this way. There is an abundance of policy prescriptions on how to improve the careers of lower income workers. From the Aspen Institute’s Future of Work Initiative to the new center-right think tank, American Compass, across the political spectrum there is a growing consensus that more can be done for workers whose education stopped after high school. As this recession unfolds, there will be calls for new nationwide initiatives. However, before embarking on another social policy experiment, we should address the needs of the unemployed by using the most advanced technology available.
Craig Caruana is Co-Founder & CEO of SweetGig, a job search platform connecting hourly workers with local jobs. He has extensive experience operating workforce development programs in cities throughout the United States. Caruana is also a former candidate for the New York City Council and earlier in his career served as an appointee in the Pentagon during President George W. Bush’s administration.
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