or Government Inaction? Is that two words or three? Does it matter?

As everyone knows this year governments around the world – with a few exceptions – have swung into action to protect us all from the dreaded Wuhan Coronavirus. In passing all these various diktats regarding lockdowns, travel bans, essential services and so on, they have shown their efficiency, impartiality, speed of action and so on. Not to mention their impressive abilities to coordinate things so that no one falls through the cracks.

Ha ha ha.

Take Oregon. When the governor there announced her lockdown and closure of non-essential businesses, it was well understood that many would lose their jobs and need to claim for unemployment. So clearly the state needed to make sure the office processing those claims was fully staffed, indeed staffed up with additional workers shifted from other departments that had less to do or hired from the pool of newly unemployed. And therefore thanks to this forward planning and joined up government, claims would all be processed efficiently so that those laid off would be able to continue buying food, paying the rent, the utilities and so on.

Yeah right.

A young lady laid off in early March just got her claim approved a day or two ago – at the end of August – a touch under six months from when she first applied. Quite what she was supposed to live on for all that time between making a claim and having it approved is unclear. I don’t know many young people who have 6 months of savings and it turns out she was one of the majority that didn’t. If it hadn’t been for being able to take advantage of parental support (and couch) and then subsequently being able to quickly land a new job that was “essential” she’d presumably have been out on the street with her credit rating trashed in early May. The fact that this did not happen has nothing at all to do with the helpful government that caused her old job to go away in the first place.

Plus we will note that they sent her a batch of individual checks – one for each week (?) she was unemployed. It is of course a small thing but sending a dozen separate checks mailed in separate envelopes is distinctly wasteful and a sign that the government systems are badly implemented. How hard would it be for the system to write a single check for all the money owed to date? And for that matter how hard would it be to wire the money in one chunk to the claimants bank account and not trust the payment to the vagaries of the USPS? I believe I read somewhere that when you add up the costs of all the steps involved printing and mailing a check costs about $5 (I may have the number wrong but it was >$1 and <$10). Right there we see a dozen or so checks so call it $60, so simply combining all the checks into a single one would save the state something like $50 per claimant. I don’t know what the previous processing time was before the virus hit but I’d guess we’re looking at maybe a month. So even before the pandemic we’d be looking at $10-$20 per claim that would be saved by printing one check instead of between three and five.

Now recall that this is not the only person in Oregon suddenly made unemployed in early March, there were a lot of them. I’m not clear on the exact numbers – a recent article reports that Oregon has some 200,000 unemployed, one from the end of 2019 reports that the number then was around 64,000 – but it seems reasonable to estimate that the number was at least 100,000, possibly 150,000. That of course also explains the delay in processing. If your normal monthly case load is a few hundred and then suddenly you get 100,000+ applications in a couple of weeks obviously you either need a lot more staff or to seriously streamline the process (or both). Obviously Oregon didn’t do that but lets be proactive here and see how we could have made things a lot better without spending a massive amount of money. Note: I don’t know all the vagaries of the Oregon governmental hiring process (though I can guess it is long and complex) and I’m sure someone will claim that hiring people is expensive, but below are some back of the envelope sums.

First budget – assume you have a $5million budget. You can get that just from my printing change:- if you can save the cost of printing/mailing checks by $50/unemployed person and you have 100,000 unemployed people then you have a budget of some $5 million to play with. But it doesn’t really matter, given the circumstances a $5 Million budget would be pretty easy to justify if the state were serious about helping people. Anyway if you took that $5 million and used it to hire 1000 people for a month at $5000/person for that month you’d massively increase the number of people processing claims. Where do you hire the 1000 from? obviously they come from the ranks of 100,000 newly out of work. Even allowing a couple of weeks for recruitment and giving them a week of training first and you’d have seen a huge speed up in processing times. Assume 4 weeks in a month and 1 week of training so 3 weeks of useful work. That’s 15 working days. With 1000 people that works out at 15,000 additional days processing claims that weren’t there before. If those new hires could all process 6 applications a day (that’s about 1/hour for 6 hours a d day, which seems reasonable given that a) it’s the government and 2) every organization, and particularly a government agency, has to have pointless meetings to get in the way of useful work) they would have processed some 90,000 applications in that month which is most of the sudden backlog (another week of work would raise that number to 120,000, two more weeks 150,000 which is basically the upper end of the surge number and implies a budget of ~$7 million)

With a budget of just $5 million and the ability to recruit and hire 1000 temporary staff for a month Oregon would have had almost every claim processed in some 6 weeks (assuming you had 2 weeks to recruit, one to train and 3 to process) instead of six months. Six weeks, while tight, would probably be fast enough that the majority of the newly unemployed would be able to keep renting their houses, paying off their cars and other loans (or at least not missing enough that they’d be seriously dinged). It’s also worth noting that by hiring the nominal 1000 from within the newly unemployed you get to save a month of unemployment payments for that 1000. IIRC that was $600/person/week or ~$2400/month which work out at $2.4 million i.e. almost half the budget of $5 million.

That sort of action – hiring a surge of contractors – is what private sector organizations do when they have a crunch demand spike. Amazon, Walmart and other retailers hire people from mid November to Christmas every year to handle the rush. Other organizations hire people in the summer to handle vacationers and so on. Manufacturers will hire a temporary second and/or third shift if they have a sudden demand and so on.

Governments don’t do that.

That’s why Government In Action is usually also Government Inaction

PS Welcome Instapundit readers – you may also enjoy Episode 2 Attack of the Drones