Hello, friends,
At The Markup, we like to keep an eye on how Big Tech is affecting society. Often that means holding accountable the big four tech companies: Google, Facebook, Amazon, and Apple. But it also means focusing on lesser-known players—such as companies peddling flawed tenant screening software—that have an outsized impact on people’s lives.
This week we turned the spotlight on two big tech consulting companies, IBM and Deloitte, that have earned tens of millions of dollars building online unemployment benefits systems for states. Some of those systems have struggled to keep up with the wave of claims across the country, leaving thousands of people without help. In some cases, the technology broke down; in others, the work was never even completed. But those companies continue to win contracts for improving unemployment systems, despite serious questions about the quality of their work.
For months, The Markup reporter Colin Lecher has been trying to get to the bottom of why the technology designed to help people in their most desperate time has failed so spectacularly. The dismal tally: By the end of May, of the 33 million people seeking unemployment benefits, only 57 percent had received help, according to data compiled by the Century Foundation.
In Alabama, hundreds of people recently waited in line for hours in a parking lot attempting to get unemployment benefits—some of them sleeping overnight. Thousands of people in multiple states have camped out in front of unemployment offices seeking benefits.
Colin began his investigation into the system collapse in March, as the economy shut down due to the coronavirus. He found that somehow our tech-adept society had failed to prepare for this crisis. He was among the first to report that online benefits systems in many states were buckling under the crush of new applicants.
In May, he investigated further and found that the problems in many states could be traced to ancient technology that required, for instance, people to receive passwords by snail mail and that was overly focused on rooting out fraudulent claims.
Florida’s online system collapsed so thoroughly that by late April the state had paid claims to only 6 percent of applicants, one of the lowest rates in the nation. The state raced to hire call center workers to help users navigate the online system by phone, but some call center workers told local news outlets that they were also stymied by technical failures.
In June, Colin obtained public records about Florida’s call centers response rates, and the numbers were dismal. It turns out that at times people dialing one of Florida’s call centers for help with unemployment claims waited as long as 12 hours to talk to an agent.
The Florida Department of Economic Opportunity, which handles unemployment claims, told Colin at the time that the agency “recognizes that many individuals are seeking an improved level of customer service that Floridians expect during this unprecedented time.”
This week, Colin’s investigation took him to the consultants that designed some of these benefits systems. He found that several states had paid huge amounts to companies to build their flawed unemployment systems. Florida fined Deloitte after the system it built, which eventually cost Florida almost $78 million, launched with errors that incorrectly denied benefits to some applicants. Pennsylvania is suing IBM over the $170 million it paid for an online unemployment system that was never completed. (The suit is ongoing.)
In a recent lawsuit, more than a dozen Florida workers accused state officials and Deloitte of negligence, arguing that problems with the application process have caused families to “lose homes, cars, savings, and dignity.”
A Deloitte spokesperson, Austin Price, said the company hadn’t worked on Florida’s system in five years and did not know “how, or even if, the technology has been maintained.” IBM spokesperson Edward Barbini declined to respond to a question about problems with the sites it has built for state governments.
Whether states or their contractors are more to blame may be a point of dispute, but one thing’s clear: Our fragile benefits systems have been flashing warning signs for years. The pandemic just added fuel to the flames.
As always, thanks for reading.
Best,
Julia Angwin
Editor-in-Chief
The Markup