University of Southern California Dissertations and Theses

Nevada: grappling with a flawed unemployment system during the pandemic

(USC Thesis Other)

Nevada: grappling with a flawed unemployment system during the pandemic

PDF

Download

Open document

Flip pages

Download a page range

Download transcript

Copy asset link

Request this asset

Transcript (if available)

Content
Nevada:

Grappling with a Flawed Unemployment System During the Pandemic

by

Subrina Hudson

A Thesis Presented to the
FACULTY OF THE USC ANNENBERG SCHOOL FOR COMMUNICATION AND
JOURNALISM
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
MASTER OF ARTS
SPECIALIZED JOURNALISM

December 2021

Copyright 2021 Subrina Hudson

ii
TABLE OF CONTENTS

Chapter 1: Nevadans Worry About Future as Enhanced Jobless Benefits End ............................ 1
Temporary Life Raft ............................................................................................ 2
End of Benefits .................................................................................................... 3
A Snail’s Pace ...................................................................................................... 4

Chapter 2: Waiting a Year for Benefits, His Savings Are Gone. He’s Not Alone. ..................... 6
Changes Ahead .................................................................................................... 7
Missing Funds ..................................................................................................... 8
‘Just Collateral Damage’ ..................................................................................... 9

Chapter 3: Unemployment Office Didn’t Learn from Great Recession, Experts Say ................ 11
Double Take ....................................................................................................... 12
Missing the Mark ............................................................................................... 13
Little Hope ......................................................................................................... 14
Investing in the Future ....................................................................................... 16

Chapter 4: Replenishing Unemployment Trust Fund Has Its Risks ............................................18
Paid in Full ......................................................................................................... 19
Long-term Risk .................................................................................................. 20

Chapter 5: End of Enhanced Jobless Benefits Spur Workforce Development ........................... 22
New Skills .......................................................................................................... 23
Creating a Labor Pipeline ................................................................................. 24

Bibliography ................................................................................................................................ 26

1

Chapter 1: Nevadans Worry About Future as Enhanced Jobless Benefits End

The pandemic wreaked havoc on Alan Mendelson’s infomercial business but he was
finally stepping back in front of the camera after signing five new clients in June.
New work meant an income, so the Las Vegas host and producer thought he could stop
filing for his weekly unemployment benefits. He soon realized he was wrong.
“They’re gone. They’ve all cancelled or they didn’t renew (their contracts),” said
Mendelson, who went back to filing his weekly claim this month (Alan Mendelson, Interview
with author, August 16, 2021). “I’m starting over again and it’s hard to get new business now
because businesses are scared.”
Nevada is experiencing another surge of COVID-19 cases that could thwart the state’s
economic recovery at a time when the safety net of unemployment benefits is expected to end
Sept. 4.
The enhanced benefits, offered through a series of federal stimulus bills, have helped
thousands of Nevadans through the pandemic but their expiration has many like Mendelson
facing the edge of a financial cliff.
It’s estimated that 9.2 million Americans will abruptly lose benefits by Labor Day —
more than six times the number of those who faced the unemployment cliff after the Great
Recession. About 1.3 million filers were affected when federal benefits expired December 2013,
according to a report from American Enterprise Institute Senior Fellow Matt Weidinger (2021).
He reported that the sudden cutoff of benefits is the result of a “little-noticed policy
change” in the American Rescue Plan that removed the allowance for a gradual phaseout of
benefits. “Such soft phaseouts allow those already receiving benefits to continue collecting them
2

for a few weeks after the eligibility door has closed to new recipients. That spreads out the end of
benefits, softening the blow of a program’s expiration on individuals and the local economy,”
according to Weidinger (2021).
Temporary Life Raft
Nevada’s economy shut down overnight on March 17, 2020, when Gov. Steve Sisolak
mandated the closure of casinos, restaurants and other nonessential businesses (Nevada Office of
the Governor 2021).
The state’s unemployment rate skyrocketed from a seasonally adjusted 3.7 percent in February
2020 to 29.5 percent in April, which made Nevada No. 1 for the highest unemployment rate in
the country.
“The largest impact was felt in Las Vegas with an unemployment rate over 33 percent
and a decline in employment near 21 percent,” Nevada’s employment office Chief Economist
David Schmidt said in a news release at the time (Nevada Department of Employment, Training,
and Rehabilitation 2020).
The state’s unemployment rate didn’t drop below double digits until November 2020,
when the unemployment rate was 8.7 percent, according to the U.S. Bureau of Labor Statistics
(n.d.).
A series of federal stimulus bills, including the Coronavirus Aid, Relief and Economic
Securities Act, quickly became a lifeline for Nevadans.
The bills included an unprecedented number of enhanced unemployment benefits such as
an additional $600 a week, later reduced to a weekly $300 payment; a 13-week extension for
those who exhausted their benefits; and, for the first time, unemployment benefits for
independent contractors, self-employed and gig workers (U.S. Congress, n.d.).
3

Henderson resident Adonna Connell said the benefits helped her stay afloat, especially in
the early months of the pandemic when the additional $600 weekly payment meant she was
making close to her previous salary as an optician (Adonna Connell, Interview with author,
August 17, 2021).
“It was fine because I thought we were all going back to work in a couple weeks — we
all thought we were going back to work — and then I got an email and that was how I found out
that all of us senior people didn’t have jobs anymore,” she said.
Connell said the end of her benefits has her feeling scared about the future, especially
since it’s been difficult finding a new job. Her husband, a truck driver, recently started working
20 hours less a week because his firm, specializing in landscaping, hit a slow season. Connell
described the couple’s financial situation as hitting “a perfect storm.”
“We’re back to what’s not getting paid and robbing Peter to pay Paul,” she said. “How
creative can I be in the kitchen? I go grocery shopping on my Target (credit) card and now we’ve
got this bill but yes, we have food on the table.”
End of Benefits
The federal benefits for Nevadans will end at midnight on Sept. 4, according to the
Nevada Department of Employment, Training and Rehabilitation (2021). They include:
— Pandemic Unemployment Assistance, the program giving unemployment benefits to
independent contractors, self-employed and gig workers
— Federal Pandemic Unemployment Compensation, offering an additional $300 weekly
payment to regular and PUA filers
— Pandemic Emergency Unemployment Compensation, which gives extended benefits for
claimants who have exhausted their regular unemployment compensation
4

— State Extended Benefits, offering an extra 13 weeks of federally-funded benefits for those
who have maxed out their regular unemployment benefits during periods of high state
unemployment rates.
“After the week ending Sept. 4, only regular unemployment insurance benefits will be
available,” DETR said in a statement.
This means independent contractors and self-employed workers like Mendelson, who are
enrolled in the PUA program, will no longer qualify for unemployment insurance. And regular
filers will need to meet pre-pandemic eligibility requirements starting Sept. 5.
A Snail’s Pace
Connell has spent months looking for work before her benefits end, adding she’s
exasperated by the job search. Her previous employer in Henderson opted to refill the senior-
level positions with new hires as opposed to bringing its workers back, she said. And many jobs
now pay significantly lower than her previous salary, making it difficult to cover basic expenses
that have recently increased such as rent.
“I’ve been offered $9 an hour. It costs me more than that to keep up my continuing
education so I can continue to do my job effectively,” said Connell, a 20-year veteran of the
optical industry. “And it’s not like nobody wants to work, but how many jobs do you have to
have to afford an apartment?”
Peter Norlander, associate professor at Loyola University Chicago, said research shows
those on long-term unemployment, defined as more than 26 weeks, take the longest to recover
jobs and their earnings (Peter Norlander, Interview with author, August 18, 2021).
“It’s not like they’re magically going to get new jobs tomorrow,” he said. “What’s going
to happen is there’s going to be a decrease in overall spending, which would have a negative
5

effect on growth rates. And more than just the economic effects, people who have nothing — no
job, no income — that’s going to increase other types of problems like homelessness,
alcoholism, drug abuse.”
For Las Vegan Mendelson, he can survive on his pension and social security benefits but
he’d rather work. He said he can earn at least double his weekly unemployment benefit of about
$700 from his TV infomercial business. But it’s been difficult landing new clients in recent
weeks with many telling him they’ll “get back to you.”
He suspects the growing number of COVID-19 cases has businesses fearing another
shutdown, causing them to tighten spending.
“I’ve been going online looking for other work, other marketing jobs. It’s impossible to
get hired,” said Mendelson. “I may be unemployable because of my age. I’m 69 years old, but I
can’t even get hired for a $12 an hour job.”
Mendelson said he’s applied to 55 jobs through Indeed and Zip Recruiter and more than
half are still listed as available with some positions posted as far back as March.
“All this crap about jobs being available — they may be available, but they’re not
hiring,” he said. “They just are not hiring.”
6

Chapter 2: Waiting a Year for Benefits, His Savings Are Gone. He’s Not Alone.

Las Vegas resident Eric Riccardi hit a milestone last week. He’s survived a year without
receiving his unemployment benefits, but it cost him his savings and the recent sale of his rental
property, which was to be his retirement income.
He hasn’t received his benefits since August 16, 2020 because his account is under
investigation by Nevada’s employment office, after a fraudster filed a claim in March 2020 using
his identity (Eric Riccardi, Interview with author, August 16, 2021).
“It’s been a year since I’ve been trying to straighten this out,” he said. “Anytime that I’ve
actually got through to them it’s been, ‘Don’t call us. We’ll call you.’ Then you sit there with the
phone on and it’s the phone call that never comes.”
Federal unemployment benefits for Nevadans are winding down this Labor Day
weekend. But more than a year after they were implemented, claimants are reporting many of the
same problems that plagued the Department of Employment, Training and Rehabilitation at the
beginning of the pandemic such as busy phone lines, payment delays and hacked accounts.
“I try to keep it together,” said Riccardi, a former salesperson for a commercial HVAC
manufacturer. “I try to keep a sense of humor about everything. I’ve been binge watching
Mystery Science Theater 3000.”
DETR Director Elisa Cafferata said the department is working quickly to resolve
claimant’s issues as well as backlogs and appeals (Elisa Cafferata, Interview with author,
September 1, 2021).
7

“One of the things we want people to know is they will get paid benefits for all of the
weeks that they are eligible for, and we are working through cases in the order that they came
in,” said Cafferata. “We know it is frustrating.”
Changes Ahead
The unemployment office was overwhelmed with Nevadans trying to file for benefits
when Gov. Steve Sisolak mandated the shutdown of casinos and nonessential businesses on
March 17, 2020. By the end of that week, DETR reported the most unemployment insurance
claims in state history with 92,298 regular initial claims. The previous high was 8,945 for the
week ending January 10, 2009 (Nevada Department of Employment, Training, and
Rehabilitation 2020).
Stephen Wandner, economist and senior fellow at National Academy of Social Insurance,
said the number of unemployed workers took off so steeply it’s no surprise states were struggling
(Stephen Wandner, Interview with author, April 30, 2020).
“In most states, the systems are very old and they’re very hard to reprogram (and) things
exploded so fast that it’s a game of catch up that will take a while,” he said.
Cafferata said DETR plans to overhaul its unemployment system, after the state
earmarked up to $54 million of American Rescue Funds in June to be used for modernizing the
department.
“Prior to the pandemic, we were dealing with 3 percent unemployment,” she said. “The
lesson learned is we have to be able to scale very quickly because economic dislocations could
be much worse and more suddenly than we previously anticipated.”
She said DETR has contracted with Washington D.C.-based nonprofit Center for
Employment Security Education and Research to help develop a request for proposal, adding it’ll
8

likely take up to six months to complete. The center is the research arm of the National
Association of State Workforce Agencies, which represents all 50 state workforce agencies
including in D.C. and U.S. territories.
Once the proposal is finished, the department will hire a vendor for implementing the
changes (Elisa Cafferata, Interview with author, September 1, 2021).
Missing Funds
The much-needed improvements are encouraging, yet filers like Las Vegan Mark Loomis
say it’s too late (Mark Loomis, Interview with author, July 30, 2021).
“I cannot contact them (DETR),” he said. “It’s just mind boggling. You can’t get ahold of
them whatsoever. Their phones are worse than they’ve ever been through this whole pandemic.”
He received a “pending resolution” notice on his account in May, and has been unable to
clear the problem to resume his weekly benefit payments.
The delay left him unable to cover his rent. He’s now preparing to be homeless after his
landlord’s eviction notice was granted by the Las Vegas Justice Court in July, despite a pending
rental assistance application for $4,200.
“My cats to animal control and me to a shelter,” said Loomis. “Somewhere down the
road, years from now, I’ll get backpay. That’s the best I probably could look forward to.”
Alan Mendelson, whose benefits under the Pandemic Unemployment Assistance program
will expire Sept. 4, had his own close call last month (Alan Mendelson, Interview with author,
August 16, 2021).
He nearly missed his weekly benefit payment when his account was hacked twice in three
days. Mendelson said the hacker changed his banking information to a Wells Fargo account with
a routing number in Minneapolis.
9

“I can’t believe the guy did it with only three weeks left of PUA,” said Mendelson, who
was able to regain access to his account shortly after the second breach.
“(DETR) was doing the right thing…and it wasn’t an email with somebody saying we’ll get back
to you in six months,” he said.
But Mendelson said he’s baffled the fraudster broke through the department’s two-step
verification system, implemented early this year by DETR to prevent fraud.
‘Just Collateral Damage’
Riccardi filed for his unemployment insurance in August 2020 but couldn’t create an
account. After a month of calling, he was able to reach DETR and was told to file a fraud
complaint because someone with an Illinois address collected benefits under his name from
March 2020 to July 2020.
He tried to follow up on his fraud claim but wasn’t able to reach the department for six
months, estimating that he made 3,000 phone calls.
When he finally reached DETR in March 2021, the representative restored Riccardi’s
account and mailed his unemployment insurance card with the back payments added, totaling
more than $20,000.
“He said after Saturday midnight, go back into your account and continue your weekly
claim. I went into my account that Sunday and I saw that they never changed my address. It still
had Atomic City, Illinois,” said Riccardi.
It took another five months before he could reconnect with DETR to point out the
mistake. He was instructed last week to wait for a follow up call in four days. He said the call
never came.
10

“Everyone (at DETR) says you were a victim of fraud,” said Riccardi. “No, I’m not. The
state was a victim of fraud. I was just collateral damage.”
Riccardi said he’s been forced to sell his Northwest Las Vegas rental property in June,
after emptying his savings.
“That house was my investment for my retirement. I didn’t want to sell it,” he said. “But
the housing market in Las Vegas really took off and I thought maybe it’s not a bad idea because I
have no income.”
He’s hoping the proceeds will give him enough time to find a new job, though he’s
skeptical he’ll find work. Riccardi suffered a stroke last year shortly after landing in the intensive
care unit at University Medical Center with COVID-19.
“It left me with a limp and a stutter but that doesn’t keep me from looking for work,” he
said. “I’ll look for work, but it doesn’t change the fact that it’s been a year and I’ve never been
able to collect my benefits.”
11

Chapter 3: Unemployment Office Didn’t Learn from Great Recession, Experts Say

An overwhelmed unemployment office struggling to process claims, answer phones and
roll out extra benefits — Nevada has been here before.
Instead of paying out new benefits to filers such as an additional $600 a week under the
CARES Act, the state unemployment office was paying an extra $25 a week more than 10 years
ago.
During the Great Recession, Nevada and other states found it difficult to create a system
to pay the relatively small addition on claimants’ paychecks, and experts are now finding not
much has changed.
“The shocking thing is we didn’t learn our lesson during the Great Recession,” said Alix
Gould-Werth, director of family economic security policy at the Washington Center for
Equitable Growth (Alix Gould-Werth, Interview with author, April 30, 2020). “We saw the
jammed phone lines, the websites go down … because policy makers didn’t address these
underlying structural problems, we ended up entering the coronavirus recession with this
unprepared fragile unemployment compensation system and we’re being left to shore it up with
last-minute fixes.”
Countless Nevadans have expressed frustration as they struggle to reach the Department
of Employment, Training and Rehabilitation by phone and email, even though a number of
federal benefit programs expired earlier this month.
DETR said it’s taking steps to update its unemployment system, investing $54 million,
but it’s a process that will take several years (Elisa Cafferata, Interview with author, September
12

1, 2021). And it gives little relief to Nevadans who have already been impacted by the
department’s failure to process claims quickly.
Double Take
When Congress passed a stimulus bill under then-President Barack Obama in February
2009, Nevada had the fifth-highest unemployment rate of any state, according to the Bureau of
Labor Statistics (n.d.).
The bill included the Federal Additional Compensation, or FAC, program which gave
filers a $25 add-on to their unemployment insurance benefit checks. The program operated
through the end of 2010 (Weidinger 2020).
Matt Weidinger of think tank American Enterprise Institute and former deputy staff
director of the House Committee on Ways and Means said the CARES Act’s extra $600 payment
is really a “supersize version” of the Obama-era FAC program (Matt Weidinger, Interview with
author, March 31, 2020).
“We had experts look at (FAC) after the fact and say, ‘You know what, that was really
complicated and very difficult for states to administer,’” he said. “It came at exactly the wrong
time because, just like now, you have a massive surge in demand for regular benefits.”
A 2013 study by the Upjohn Institute for Employment Research found that adding the
FAC program into states’ benefits systems “was either impossible or would have resulted in
great delays (Barnow and Hobbie 2013, chap. 8).”
The study found Nevada tried juggling a record number of claims while implementing
the FAC program by hiring new staff, reassigning employees from other offices to support
DETR and increasing staff overtime hours.
13

State officials told Upjohn that administering the extra $25 as a separate payment
“substantially increased the administrative workload,” and testing the new system to make sure it
was accurately making payments was also time-consuming (Barnow and Hobbie 2013, chap. 8).
DETR declined to address the parallels between the rollout of the FAC program and the
CARES Act’s extra $600 saying that “comparisons made with FAC don’t translate exactly here
(DETR, Email with author, May 1, 2020).” It only said in an emailed statement that FAC was
implemented in 2009 when it was using its “old legacy UI system known as GUIDE that was
built in the late ’60s, early ’70s. It is not the same system we operate in now.”
A system update was made Labor Day weekend 2013, according to DETR Director Elisa
Cafferata (Elisa Cafferata, Interview with author, September 1, 2021).
Missing the Mark
While the department doesn’t see any parallels, like in 2009, it took similar steps to meet
what was a record-number of unemployment claims last year and, like in 2009, problems
followed.
Of the three major unemployment provisions of the CARES Act, the additional $600
rolled out quicker than the other programs: a 13-week extension for those who have exhausted
their benefits, and unemployment insurance for independent contractors, self-employed and gig
workers.
The most controversial rollout was the Pandemic Unemployment Assistance program for
self-employed workers. A bottleneck of unprocessed claims left thousands of jobless Nevadans
without an income for months. The delays spurred a class action lawsuit last year where Second
Judicial District Court Judge Barry Breslow mandated, in part, that DETR resume paying gig,
14

self-employed and independent workers who previously received money under the PUA program
before the state froze their funds (Hudson 2020).
“Clearly, there is substantial focus, significant resources, and spirited efforts being made
by the State of Nevada to resolve the problems with Nevada’s unemployment benefit delivery
system that have given rise to the litigation before this court,” said court-appointed Special
Master Jason Guinasso, in his 144-page report. “Unfortunately, for many claimants, the progress
being made is too late or otherwise not enough as they continue to suffer under the strain of not
being employed and the desperation that comes from not being able to access benefits to sustain
them and their families through the aftermath of the global pandemic.”
When DETR was overwhelmed with claimants calling the department, it hired Irvine,
California-based call center Alorica in April 2020 to help answer claimant questions and resolve
issues. Claimants soon reported trouble contacting the call center saying their calls were
disconnected shortly after being placed on hold and that Alorica associates could not access their
claims to fix account issues.
Four months later, a Review-Journal investigation found the estimated $5 million
contract between Alorica and DETR failed to include a list of goals, or metrics of success,
typically found in call center contracts to keep them accountable (Hudson 2020). DETR then
announced in September 2020 it would terminate its contract with Alorica and bring call center
operations in-house (Nevada Department of Employment, Training, and Rehabilitation 2020).
Operational challenges were also exacerbated by leadership changes. The department saw
three of its top officials step down within three months. Cafferata was named acting director in
August 2020 with her appointment becoming permanent in January (Dentzer 2021).

15

Little Hope
Gould-Werth of the Washington Center for Equitable Growth said the challenges faced
by Nevada were also seen in other states.
“I just want to make it clear that this situation is deeply, deeply upsetting and is harmful
to Nevadans who desperately need income to pay the rent in the context of COVID-19,” she said.
Las Vegan Mark Loomis was preparing to start his job at a solar company on March 17,
2020, when Gov. Steve Sisolak mandated the closure of casinos and nonessential businesses
(Mark Loomis, Interview with author, July 30, 2021).
He filed for unemployment benefits, and said he received them on time including the
additional $600 payment, later reduced to $300. His benefits coupled with the monthly $1,000
payment from Social Security allowed him to cover basic expenses.
But Loomis’ payments stopped in May because of a “pending resolution” on his account.
He tried to call DETR to resolve the issue but hasn’t been able to get through and clear his
account.
“It just clobbered me financially,” he said, adding that he couldn’t pay his rent.
He said his landlord grew impatient, despite the pair establishing a payment plan, and
served him an eviction notice that was granted by Las Vegas Justice Court in July (Mark
Loomis, Interview with author, August 16, 2021).
“I was able to stop (the eviction) with a Chapter 7 bankruptcy,” said Loomis. “It’s a lousy
way to live right now. You ever see the show Mad Max? I feel like that’s the world I’m living in.
Ain’t that a shame? In the United States of America.”
Meanwhile, other claimants have given up.
16

Dee Tani tried filing for unemployment benefits in March 2020 as well, but was told he
owes DETR nearly $7,000 (Dee Tani, Interview with author, July 19, 2020).
Tani said the overpayment notice cited payments made in 2014, but the only other time
he’s filed for benefits was in 2008. He learned of the notice after wondering why he hadn’t
received his benefits even though his former coworkers were already being paid.
“I just happened to click under ‘My Documents’ (on his online account with the
employment office), and that’s how I stumbled on this can of worms,” he said, adding he had a
nervous breakdown when seeing the notice.
Tani believes his case may be fraud and made several attempts to report it by phone and
email but hasn’t been able to reach DETR.
Unable to live without an income, Tani picked up a job in July 2020 at one of Amazon’s
North Las Vegas warehouses before leaving to return to his job at William Hill Sportsbook on
the Strip (Dee Tani, Interview with author, March 31, 2021).
Tani said he’s stopped contacting DETR and doesn’t expect to ever receive backpay.
Investing in the Future
Cafferata said the department is still working quickly to resolve outstanding claims,
noting an extra 200 workers from Nevada’s welfare division helped process over 367,000 claims
over the past year (Elisa Cafferata, Interview with author, September 1, 2021). While those
employees, who worked overtime, are no longer helping DETR as of Sept. 1, she said the
department has plans for hiring additional staff.
“We’re looking to continue to hire people here and organize our process to finish clearing
out the backlog, but it’s going to be more challenging because we’re limited (now),” said
Cafferata.
17

She wouldn’t disclose the number of the department’s backlog, except that it still has 800
claims to resolve from the expired PUA program and “several thousand” in the appeals backlog.
“Appeals — it’s a whole separate unit from the claim determination. Now, you’re in the
world of administrative law and we have due process requirements,” she said. “It’s not
something we just do in a day… it’s going to take us several months to get through all of the
appeals backlog.”
Updates to the department’s unemployment system are also underway after the state
approved a bill to use $54 million in federal pandemic aid in June for modernizing efforts at
DETR (Nevada Electronic Legislative Information System 2021).
Cafferata said the department is in the process of creating a request for proposal with the
Center for Employment Security Education and Research. She said it will take about six months
to complete the proposal before it can take bids from third-party vendors.
Cafferata would not outline how the money will be invested to the Review-Journal.
However, during a May hearing with the Assembly Committee on Ways and Means and
Senate Committee on Finance she said costs would go towards vendor development,
programming staff and consultants and project management fees (Golonka 2021).
Assembly Speaker Jason Frierson (D-Las Vegas), who sponsored the bill, said during the
hearing that an update would allow the state to handle the next unemployment crisis.
“I am not remotely hesitant in investing dollars and trying to modernize our system,” he
said. “I wish that we had had the vision to be able to see that this could happen and have done
this a long time ago.”
18

Chapter 4: Replenishing Unemployment Trust Fund Has Its Risks

Nevada’s pot of money for paying jobless benefits ran out in nine months last year —
depleting an unemployment trust fund that took nearly seven years to rebuild after the last
recession more than ten years ago.
“There has been historic levels of claims, so what you’re finding is, even faster than any
normal recession, states are burning through their state trust funds,” said Matt Weidinger of think
tank American Enterprise Institute (Matt Weidinger, Interview with author, July 5, 2020).
Filers were still able to receive their benefits when the unemployment trust fund ran dry
in December 2020 because Nevada borrowed more than $300 million from the federal
government to continue paying benefits. But experts say the long-term impact will be felt by
employers, who will likely face higher payroll taxes, and even new filers, who may see stricter
eligibility requirements in coming years.
Weidinger said the high number of unemployment claims across the country meant many
states exhausted their trust funds last year and borrowed from the federal government. But, he
cautioned, the extra money is a loan, not a grant.
“States having to resort to loans because their trusts are exhausted is going to even more
immediately result in states having to automatically raise state payroll tax levels,” Weidinger
said. “You can either raise the taxes to support the level of benefits you want to provide, or you
can cut (a filer’s) benefits somehow — you can cut the number of weeks, you can cut the dollar
amount — there’s all sorts of ways on the benefits side you can adjust but there’s a balance.”
Nevada’s trust fund is fully supported by employer payroll taxes and the state’s
Employment Security Council, which is part of Nevada’s employment office, is hosting a
19

meeting in October on whether to recommend raising payroll taxes — now at 1.65 percent —
next year to the state’s Employment Security Division (n.d.).
It’s unclear whether the division will approve a rate increase, which would take effect
next year, but it may be likely given that the state legislature already gave employers temporary
protections from a payroll increase this year, which reduced employer contributions into DETR’s
trust fund (Nevada Electronic Legislative Information System 2021).
Paid in Full
Nevada’s trust fund was $1.93 billion in January 2020, the balance fell to $873.14 million
at the end of June then was depleted early December, according to data from the U.S.
Department of the Treasury (2021).
Money for the federal unemployment provisions under the CARES Act and American
Rescue Plan, such as paying an additional $300 to filers each week, was federally funded and not
drawn from the state trust fund.
States were able to borrow interest-free until Sept. 6, when a 2.3 percent interest rate
kicks in on the federal loans (Elisa Cafferata, Interview with author, September 1, 2021).
Nevada was one of a handful of states that paid off their loan(s), known as Title XII
advance, just before the deadline. That’s because Nevada’s legislature passed Senate Bill 461 in
July to use $335 million of its federal COVID-19 relief money to pay the federal government
back for its Title XII loan (Nevada Electronic Legislative Information System 2021).
DETR Director Elisa Cafferata said it worked with the Governor’s finance office and the
state treasury office to ensure the loan was paid back “so we don’t have to pay interest on those
monies that we borrowed.” With the federal loan paid off, the state’s trust fund is now at $180.5
million for the week ending Sept. 4, according to DETR.
20

In total, Nevada paid out an estimated $9 billion in unemployment benefits last year with
state and federal funds, or 50 percent more than in the 12 previous years combined.
DETR said it was also able to block $2 billion in attempted fraud and recovered $100 million in
wrongfully paid claims (Dentzer 2021).
Long-term Risk
National Employment Law Project Senior Researcher and Policy Analyst Michele
Evermore said she’s “not at all surprised” Nevada looked to the federal government for help,
noting other states, such as California, New York and Texas, have taken out a federal loan
(Michele Evermore, Interview with author, July 6, 2020).
“Nevada did not enter this recession in a bad position and it running out of money is
more a factor of the high, high, high unemployment rate than it is not being good stewards of
their trust fund,” she said.
Evermore said before the economic impact of the coronavirus, Nevada’s trust was funded
enough to manage benefits for a year and a half during a normal recession.
During the Great Recession from 2007 to 2009, the state’s trust fund was emptied out and
it reached out to the feds for additional funds. At the time, the state’s unemployment rate was
nearly 14 percent and it borrowed an estimated $773 million to cover unemployment benefits.
Nevada paid back the loan in 2017, nearly seven years after taking it out (Lochhead 2017).
Evermore said Nevada, unlike other states, refrained from trimming unemployment
benefits as a way to rebuild its trust fund coming out of the economic slump.
“Nevada resisted the urge to do that after the last recession, admirably,” she said. “I don’t
anticipate that would be the case after this recession, but you never know.”
21

Nevada and other states are facing an unprecedented economic situation and steps taken
to rebuild the trust this time around will likely be different, according to the Century Foundation
Senior Fellow Andrew Stettner (Andrew Stettner, Interview with author, July 7, 2020).
“Unemployment taxes are going to go up probably significantly (for employers) back to
the levels they were at in 2011 (and) 2012,” he said. “In the short term, it’s not a huge deal but in
the long term, it’s a big deal.”
And so far, the state has already taken cost-saving measures such as trimming how much
it pays claimants.
In June, the state passed a bill changing a filer’s weekly benefit amount from up to 75
percent of their former weekly pay to about 66 percent, a nearly 10 percent decrease in potential
weekly unemployment benefits for filers. The new reduction takes effect January 1, 2022
(Nevada Electronic Legislative Information System 2021).
“Sympathy for the unemployed goes away really fast,” said Stettner. “It’s really the
people that get laid off two years after the worst time that end up paying the price because the
benefits get cut back.”
22

Chapter 5: End of Enhanced Jobless Benefits Spur Workforce Development

Nearly a month after federal unemployment benefits expired for thousands of Nevadans,
state and local officials have been aggressively pushing new workforce development initiatives
including a new career center in one of the hardest-hit areas of Las Vegas.
The city of Las Vegas and Workforce Connections, Southern Nevada’s public job center
network, will be opening an Employ NV Career Hub on Thursday in the Historic Westside, a
largely African-American neighborhood and once the only area where African-Americans could
live during segregation (City of Las Vegas 2021).
Meanwhile, the Vegas Chamber rolled out an online job portal last week, known as
Southern Nevada Workforce Solutions, offering visitors resources on job training and
opportunities (Hudson 2021).
An emphasis on workforce development for jobs outside of gaming and hospitality has
become the focus for Southern Nevada’s leaders, who see it as a path towards creating economic
diversity that will lessen any impact of future recessions on residents.
“What do we need to do to build a more resilient economy?” said economist John
Restrepo, principal of RCG Economics in Las Vegas. “I think the powers that be are thinking
more about that than they did during the Great Recession. The lessons of the Great Recession
were not learned very well and not particularly for very long. I think this time it’s different.”
Restrepo said the pandemic exposed structural weaknesses in Southern Nevada’s
economy — adding that hospitality took the biggest hit and resulted in the majority of layoffs
last year (John Restrepo, Interview with author, September 21, 2021).
23

Around 28 percent of Las Vegas’ labor market worked in leisure and hospitality while
nationally the industry employs about 11 percent, according to an August report by the Las
Vegas Global Economic Alliance (2021).
New Skills
Vegas Chamber CEO Mary Beth Sewald said a number of new and emerging industries
are cropping up in the region such as information technology, cybersecurity and advanced
manufacturing (Mary Beth Sewald, Interview with author, September 22, 2021).
“There are a lot of people that want to go back to work but they need a new skillset,” she
said. “They were displaced out of their original jobs and they don’t have a job to go back to.”
It’s why the chamber introduced an online job portal last week, which is said to be phase
one of its plan for helping workers learn new skills or be retrained.
Sewald said workforce development is a huge part of creating economic diversity in
Southern Nevada. She said workers with a variety of skills will help attract new companies into
the region.
“We have industries new and emerging, and the whole state frankly, and some of them in
the past told us they couldn’t relocate because there wasn’t an infrastructure or the skilled
workforce,” she said. “We love gaming — I mean that’s what Nevada was built on — but it
behooves us to diversify our economy.”
Sewald was leading the chamber and 180 business and community leaders last week in
Washington D.C. to meet with Biden administration officials and lawmakers about issues
impacting Southern Nevada, particularly workforce development.
The group was looking to ensure Southern Nevada receives its fair share of federal
funding from the $3 billion Investing in America’s Communities initiative, which is for helping
24

distressed and underserved communities create jobs, develop in-demand skills and invest in
infrastructure (Mary Beth Sewald, Interview with author, September 22, 2021).
Creating a Labor Pipeline
Jo Cato, owner of Las Vegas-based marketing and public relations firm Periwinkle
Group, said her company has expanded its search by hiring recent high school graduates as
opposed to focusing on those with a college degree (Jo Cato, Interview with author, September
24, 2021).
“You don’t necessarily need a college degree in our industry,” said Cato. “We’ve been
looking to hire out of high school and help those students learn the craft of PR and marketing
from an early stage, and they can decide whether or not it’s something they want to follow up on
if they decide to go to college.”
She said investing in youth should also be a focus and it’s something she brought up
earlier this month at a roundtable hosted by Gov. Steve Sisolak and U.S. Secretary of Labor
Marty Walsh at the Latin Chamber of Commerce (Ross 2021). It was there that business leaders
like Cato expressed a need for creating a skilled labor pipeline with the help of federal funding.
“We really have to be intentional about the investments we make to move forward,” said
Walsh, during the roundtable. “We’re looking at some of the ways that we invest in job training.
I use the word invest because it is an investment in people. … We’re investing in the American
economy.”
Cato added teens are often told good jobs require college degrees and are often unaware
of other career paths through trades or by receiving an associate’s degree. And she pointed to
Southern Nevada’s Workforce Connections as a group that has been thinking “out of the box”
when helping to train and employ locals.
25

“We’re seeing more chatter about nontraditional careers versus in the past, you have to be
a teacher or lawyer,” said Cato. “We’re seeing with the pandemic that human investment is being
made and we welcome that change.”
Sewald admits it’s too early to predict whether the chamber’s efforts and those of
Southern Nevada’s leaders will pay off. She said the state’s unemployment figure is still
relatively high, at 7.7 percent in August, and even higher in the Las Vegas area at 8.2 percent.
“We’re seeing higher visitation levels in Las Vegas because of pent-up demand from
visitors but we’re by no means back to the same level of business activity pre-pandemic,” said
Sewald. “In order to be resilient during down times of travel and tourism, we have to have other
things to stimulate our economy and keep people employed. So that’s really the key driver —
economic diversification.”
26

Bibliography

Barnow, Burt S. and Richard A. Hobbie, eds. 2013. The American Recovery and Reinvestment
Act: The Role of Workforce Programs. Kalamazoo, MI: W.E. Upjohn Institute for Employment
Research. https://doi.org/10.17848/9780880994743.

City of Las Vegas. 2021. “Employ NV Career Hub Opens In Historic Westside School.”
https://content.govdelivery.com/accounts/NVLASVEGAS/bulletins/2f358c4.

Dentzer, Bill. 2021. “Nevada unemployment payments totaled $9B in 2020.” Las Vegas Review-
Journal, February 10, 2021. https://www.reviewjournal.com/news/politics-and-
government/2021-legislature/nevada-unemployment-payments-totaled-9b-in-2020-2277842/.

Golonka, Sean. 2021. “DETR provides more details on $54 million unemployment system
modernization, but timeline of implementation remains unclear.” The Nevada Independent, May
24, 2021. https://thenevadaindependent.com/article/detr-provides-more-details-on-54-million-
unemployment-system-modernization-but-timeline-of-implementation-remains-unclear.

Hudson, Subrina. 2020. “Employment office paying PUA claims, report says.” Las Vegas
Review-Journal, August 20, 2020. https://www.reviewjournal.com/news/politics-and-
government/nevada/employment-office-paying-pua-claims-report-says-2099700/.

Hudson, Subrina. 2020. “Holes in call center contract explain why Nevada jobless can’t get
through.” Las Vegas Review-Journal, August 6, 2020.
https://www.reviewjournal.com/news/politics-and-government/nevada/employment-office-
paying-pua-claims-report-says-2099700/.

Hudson, Subrina. 2021. “Vegas Chamber launches new platform to assist job seekers.” Las
Vegas Review-Journal, September 22, 2021. https://www.reviewjournal.com/business/vegas-
chamber-launches-new-platform-to-assist-job-seekers-2445614/.

Las Vegas Global Economic Alliance. 2021. “41st Annual Las Vegas Perspective.” Last
modified August 13, 2021. https://events.lvgea.org/vegasperspective/.

Lochhead, Colton. 2017. “Sandoval touts Nevada’s repayment of federal debt.” Las Vegas
Review-Journal, December 5, 2017. https://www.reviewjournal.com/news/politics-and-
government/sandoval-touts-nevadas-repayment-of-federal-debt/.

Nevada Department of Employment, Training, and Rehabilitation. 2021. “All Federal Pandemic
Unemployment Extended Benefit Programs Expire in September.”
https://cms.detr.nv.gov/Content/Media/EndFedBenefitsFIN.pdf.

27

Nevada Department of Employment, Training, and Rehabilitation. n.d. “Minutes of Employment
Security Division/Employment Security Council.” Accessed September 26, 2021.
https://detr.nv.gov/Page/Minutes_of_Employment_Security_Division_Employment_Security_C
ouncil.

Nevada Department of Employment, Training, and Rehabilitation. 2020. “Nevada Department of
Employment, Training and Rehabilitation and Alorica announce transition of call center to the
State.”
https://cms.detr.nv.gov/Content/Media/DETR%20%20Alorica%20Announce%20Transition_FI
NAL%20PR_SL.pdf.

Nevada Department of Employment, Training, and Rehabilitation. 2020. “Nevada has highest
unemployment rate in the nation; impact seen in areas across the State.”
https://nvhealthresponse.nv.gov/wp-content/uploads/2020/05/April-2020-Sub-State-PR.pdf.

Nevada Department of Employment, Training, and Rehabilitation. 2020. “Weekly
Unemployment Insurance Initial Claims Increase to 92,298; Most in State History.”
https://nvhealthresponse.nv.gov/wp-content/uploads/2020/05/March-21-Weekly-UI-Claims-
Press-Release.pdf.

Nevada Electronic Legislative Information System. 2021. “AB484.” Last modified September 9,
2021. https://www.leg.state.nv.us/App/NELIS/REL/81st2021/Bill/8211/Overview.

Nevada Electronic Legislative Information System. 2021. “SB75.” Last modified September 9,
2021.
https://www.leg.state.nv.us/App/NELIS/REL/81st2021/Bill/7297/Overview.

Nevada Electronic Legislative Information System. 2021. “SB461.” Last modified September 9,
2021. https://www.leg.state.nv.us/App/NELIS/REL/81st2021/Bill/8240/Overview.

Nevada Office of the Governor. 2021. “Governor Sisolak Announces COVID-19 Risk
Mitigation Initiatives.”
https://gov.nv.gov/uploadedFiles/govnewnvgov/Content/News/Emergency_Orders/2020_attach
ments/2020-03-17-COVID-19-mitigation-press-release.pdf.

Ross, McKenna. 2021. “Sisolak, Labor secretary talk workforce development in Las Vegas.” Las
Vegas Review-Journal, September 13, 2021. https://www.reviewjournal.com/news/politics-and-
government/nevada/sisolak-labor-secretary-talk-workforce-development-in-las-vegas-2439712/.

U.S. Bureau of Labor Statistics. n.d. “Databases, Tables & Calculators by Subject.” Accessed
August 18, 2021. https://data.bls.gov/timeseries/LASST320000000000003.

U.S. Congress. n.d. “H.R.748 - CARES Act.” Accessed March 28, 2020.
https://www.congress.gov/bill/116th-congress/house-bill/748/text.

28

U.S. Treasury Department. 2021. “Title XII Advance Activities Schedule.” Accessed September.
4, 2021). https://www.treasurydirect.gov/govt/reports/tfmp/tfmp_advactivitiessched.htm.

Weidinger, Matt. 2021. “A record benefits cliff is coming thanks to Democrats’ American
Rescue Plan.” American Enterprise Institute, June 15, 2021.
https://www.aei.org/op-eds/a-record-benefits-cliff-is-coming-thanks-to-democrats-american-
rescue-plan/.

Weidinger, Matt. 2020. “Target stimulus benefits in a way that works.” American Enterprise
Institute, March 20, 2020. https://www.aei.org/poverty-studies/target-stimulus-benefits-in-a-
way-that-works/.

Abstract (if available)

Abstract Nevada saw a record number of unemployment claims during the height of the coronavirus pandemic in 2020. A number of federal stimulus bills helped jobless Nevadans survive but the abrupt end of those benefit programs in September 2021 meant an uncertain financial future for unemployed Nevadans. And while Nevada's employment office seems to be learning its lesson from the mistakes it made processing claims, the operational problems still exist and a pending update to its computer system won’t happen for another few years.

Linked assets

University of Southern California Dissertations and Theses

Conceptually similar

PDF

‘794,880 minutes’: How do you measure the COVID-19 Broadway shutdown?

PDF

This year in Hollywood: how the entertainment industry faltered, evolved and survived a year of pandemic and racial reckoning

PDF

The effectiveness of nonfiction storytelling through live performance

PDF

The new normal

PDF

Beyond the labels

PDF

Hooked on hate

PDF

A balancing act

PDF

What it feels like to love a Black man through the worst of times: the life of Nickolas Lee

PDF

Speaking up in Boyle Heights

PDF

100 years of horror: a history of modern horror movies

PDF

Behind the phenomenon of natural wine

PDF

Dance/Abolition: how dance can be used as a form of protest and empowerment

PDF

A second chance: a documentary that follows the rescue, rehabilitation and release of California's sea lions amidst a new wave of algal bloom poisoning caused by rising ocean temperatures.

PDF

Sages & seekers

PDF

Finding my own moveable feast

PDF

‘Fat like me, Black like me, beautiful like me’: a criticism of fat, Black women and pop culture’s attempt to size them up

PDF

Life after life

PDF

One of us: exploring the relationship between Hollywood and disability

PDF

Spa City: the midcentury spa-tels of Desert Hot Springs

PDF

The rise of farm apprenticeships: a look at San Juan Capistrano’s agricultural past, present and future

Asset Metadata

Creator Hudson, Subrina (author)

Core Title Nevada: grappling with a flawed unemployment system during the pandemic

Contributor Electronically uploaded by the author (provenance)

School Annenberg School for Communication

Degree Master of Arts

Degree Program Specialized Journalism

Publication Date 11/19/2021

Defense Date 11/18/2021

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag COVID-19 unemployment insurance,Las Vegas,Nevada,Nevada Department of Employment, Training, and Rehabilitation,OAI-PMH Harvest,Pandemic Unemployment Assistance,Unemployment

Format application/pdf (imt)

Language English

Advisor Seidenberg, Willa (committee chair), Liu, Jacqueline (committee member), Mittelstaedt, Alan (committee member)

Creator Email smhudson@usc.edu,subrina.h@gmail.com

Permanent Link (DOI) https://doi.org/10.25549/usctheses-oUC17138520

Unique identifier UC17138520

Legacy Identifier etd-HudsonSubr-10248

Document Type Thesis

Format application/pdf (imt)

Rights Hudson, Subrina

Type texts

Source 20211122-wayne-usctheses-batch-899-nissen (batch), University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the author, as the original true and official version of the work, but does not grant the reader permission to use the work if the desired use is covered by copyright. It is the author, as rights holder, who must provide use permission if such use is covered by copyright. The original signature page accompanying the original submission of the work to the USC Libraries is retained by the USC Libraries and a copy of it may be obtained by authorized requesters contacting the repository e-mail address given.

Repository Name University of Southern California Digital Library

Repository Location USC Digital Library, University of Southern California, University Park Campus MC 2810, 3434 South Grand Avenue, 2nd Floor, Los Angeles, California 90089-2810, USA

Repository Email cisadmin@lib.usc.edu