WHEN ILLINOIS Gov. James Thompson was in the midst of an extremely close battle for reelection in 1982, he faced a knotty problem. Overall unemployment in his state was high, but, because of changes in the unemployment insurance law pushed through Congress by the Reagan administration in 1981, thousands of jobless workers in the state stood to lose an additional 13 weeks of unemployment benefits. To avoid that politically damaging result, the state switched its method of counting jobless workers to increase the total. The Labor Department later rejected the recount but approved still another version that raised the count sufficiently to maintain benefits. Did an impropriety occur?
Illinois's behavior was certainly such as to arouse suspicion. When a preliminary count in August 1982 showed insured unemployment dropping below the rate required for continuation of extra benefits, the governor got permission from Labor Secretary Raymond Donovan to review the count. State officials then added to their count an additional number of workers whose benefit claims had not yet been processed. They added just enough--including some double-counting--to bring the total precisely to the required 5 percent for four weeks running.
Career bureaucrats in the Labor Department spotted the unlikely count, investigated the matter and, ultimately, supervised a total recount. The final method approved by the department disallowed the double-counted cases. However, although the law no longer allowed workers who had used up their regular unemployment benefits to be counted, the department permitted the state to include in its weekly count some workers whose regular benefits had expired during the previous week. This was justified on the grounds that, because the state makes bi-weekly payments, these cases were still part of the regular "workload." The additional cases were sufficient to keep the insured rate above the level required for extended benefits. No further action was taken against the state.
While the Labor Department tries to monitor state practices for reasonable uniformity, officials say they do not know how many other states take advantage of the expanded counting methods that Illinois now employs. Many other states had their extended benefits programs abruptly terminated even as the recession deepened. Perhaps some of them could have avoided that interruption with the benefit of a supervised recount. But since they didn't complain or act suspiciously, they didn't get the benefit of the department's helping hand.
The unemployment insurance law is sufficiently vague to provide ample opportunity for justifying different ways of counting insured unemployment. Since large amounts of federal aid now ride on that count, it can be expected that states will seek to maximize their advantage. To keep the system fair, a clearer definition of what Congress intended is needed. And there ought to be some penalty for miscounting, even if it is subsequently possible to justify a count by an alternate procedure.