Jobless Claims at Pre-Pandemic Levels; Fraud Still a Concern

COLUMBUS, Ohio (AP) — Initial jobless claims in Ohio have returned to pre-pandemic levels for the first time, according to two weeks of state data. The positive economic news comes even as a fresh state auditor’s report sheds more light on the extent of fraud experienced by Ohio’s unemployment insurance program.

The state human services agency reported Thursday that 7,044 Ohioans filed initial claims for unemployment for the week ending Oct. 23, the lowest figure of the pandemic and the second week in a row that claims dipped below 8,000 for the first time since the winter of 2020. Nationally, unemployment claims also fell to a pandemic low of 281,000.

By contrast, Ohio saw 7,042 initial claims for unemployment the week ending March 14, 2020, just days before Gov. Mike DeWine issued a stay-at-home order that shuttered many businesses as the coronavirus pandemic spread across the state.

The return to pre-pandemic jobless claims is good news economically, but must also be weighed against the changed nature of the workforce, said Michael Goldberg, a Case Western University professor.

The new figures likely undercount people who retired early or who elected to take more flexible jobs that keep them at home, he said. And anyone who’s dined out or shopped recently will have noticed a continuing shortage of restaurant and retail workers.

“Obviously the pandemic is still with us, so there are health and safety reasons that people are opting out of returning to their previous jobs, and nor are they looking for work necessarily in those areas,” said Goldberg, executive director of Case’s Veale Institute for Entrepreneurship.

Tempering the good news was a report Thursday from Auditor Keith Faber that further criticized the state’s handling of unemployment claims by highlighting hundreds of instances of claims processed for inmates, people who had been declared dead, and for people who listed names including “Adidas,” “Dummy,” “Guess,” and “Demon.” The auditor’s office said it couldn’t determine whether all those claims were actually paid.

One in four unemployment claims in the business year ending June 30 may have been overpayments or fraudulent payments, the audit found. The state made about $3.3 billion in overpayments and about $475 million in fraudulent payments, the audit said.

In total, Ohio has distributed $23.8 billion in unemployment benefits to more than 2.4 million claimants since the pandemic began.

“A colossal failure,” Faber called the state’s unemployment claims response. That was true even in light of the unprecedented nature of the pandemic, the state’s antiquated computer system, and a federal government directive to focus on getting money to claimants as quickly as possible, the auditor said.

“It was a system that failed in most major ways you could fail,” Faber said in an interview.

The human services agency faced extraordinary challenges but also didn’t publicize the fraud issue early enough, the auditor said. In May, Faber chastised the agency for not reporting unusual number of fraud claims or payments from June to December 2020 during routine audits.

Faber said the situation began to improve when DeWine in February announced that Ohio banks and insurance companies agreed to loan experts to the state human services agency to address problems with the jobless claims system.

The audit confirms the “unprecedented surge in claims” during the pandemic and the fraud that followed, Matt Damschroder, Ohio Department of Job and Family Services director, said in response to the audit.

“The recommendations align with the work already underway in addressing the issues we faced,” he said in a statement.

Pictured: Keith Faber speaks at the Ohio Republican Party event, Tuesday, Nov. 6, 2018, in Columbus, Ohio. (AP Photo/Tony Dejak, file)

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