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CNN Special Reports

The Price We Paid: The Economic Cost Of COVID. Aired 9-10p ET

Aired March 27, 2021 - 21:00   ET




UNIDENTIFIED FEMALE: Big crowd outside the Kentucky state Capitol. They waited for hours to get help with unemployment.

UNIDENTIFIED MALE: People desperate to get their hands on one of these, an application for unemployment benefits.


You've lost your job. The governor tells you ...

UNIDENTIFIED MALE: We will help you.

UNIDENTIFIED MALE: ... to file for unemployment, you filed and nothing.

LAVANDERA: The pandemic exposing problems with the unemployment insurance program in states like Kentucky.

JAMES MAXSON, FORMER IN-HOUSE COUNSEL FOR THE OFFICE OF UNEMPLOYMENT INSURANCE 2008-2016: It's a mainframe that dates back to the 1970s.

UNIDENTIFIED FEMALE: There are people suffering.

MUNCIE MCNAMARA, FORMER EXECUTIVE DIRECTOR OF THE OFFICE OF UNEMPLOYMENT INSURANCE: They were intentionally making it more difficult for people to access the unemployment system.

UNIDENTIFIED MALE: There was well over 400,000 e-mails that went unread.

LAVANDERA: Forcing insiders to speak out.

MCNAMARA: There were already tens of thousands of backlog claims. Just to be clear, that was before the pandemic.

LAVANDERA: That was before the pandemic

MCNAMARA: After that, we just hit chaos.

LAVANDERA: Chaos and tragedy.

UNIDENTIFIED MALE: He testified the governor's team cut corners.

MCNAMARA: In the moment, I knew this was going to be the most important thing I would ever do with my life.

CORY SMITH, FILED FOR UNEMPLOYMENT INSURANCE IN APRIL OF 2020: There's nights that I cry myself to say, I feel worse as I can't provide for my kids.

ANGIE PAYNE, FILED FOR UNEMPLOYMENT INSURANCE IN MARCH OF 2020: I work so hard to get where I am today. I don't want to end up homeless.

LAVANDERA: This is a CNN Special Report, "The Price We Paid: The Economic Cost of COVID."

Do you think it's a system that was neglected for too long or do you just think it was like a perfect storm of these crises coming together?

DR. CANDY WENTZ, FILED FOR UNEMPLOYMENT INSURANCE IN MARCH OF 2020: I think it wasn't neglected. Here you need a pocket full of treats.

UNIDENTIFIED MALE: Yes, I do. Sky (ph) doesn't want to stand still. Spin. Good boy. Who's a good boy?

PHILLIP WENTZ, FILED FOR UNEMPLOYMENT INSURANCE IN MARCH OF 2020: We met in Auburn, Alabama at the veterinary school.

UNIDENTIFIED MALE: Oh man, there's just a big one that just go up down the whole piece.

LAVANDERA: What are your favorite animals to work on?

WENTZ: I prefer the cats and dogs.

PAYNE: Every day I get up, take a shower, fix my breakfast, slice bread (ph), get dressed and I'm headed out the door, same routine over and over every day. Everybody always said I have a country accent but yes I'm from the country, I've lived here my whole entire life.

LAVANDERA: Country girl.


LAVANDERA: And you said, you have a son?

PAYNE: Yes, aha. Of course he still lives at home with his mom, because, well, my daughter she passed away a couple years ago from cancer. She passed away at 28.

LAVANDERA: This is home.

C. SMITH: I grew up right here, went to school here, graduated from here and been here, Allah (ph). I'm not going nowhere.

Catch it with you're hands and not the chest buddy. You'll stop hurting. I went from being able to afford the good cigarettes to these nasty ones. Trying to quite.

LAVANDERA: When you first remember hearing about the coronavirus and the possibility of a pandemic?

C. SMITH: I don't watch the news, so just when my wife does, she told me about him.

SANDY SMITH, WIFE OF CORY SMITH: We've known each other since we were in kindergarten.

C. SMITH: I don't really care, you know, I just continue doing what I did and come home every day.

UNIDENTIFIED FEMALE: The first person to die in the United States as a result of the widening coronavirus.


LAVANDERA: You took it seriously from the get go?

WENTZ: I did.


WENTZ: My son had autoimmune disease a couple years ago after a respiratory virus and they don't really know a whole lot of about that particular disease.

UNIDENTIFIED MALE: Let's go. Good. There we go.

WENTZ: Really, I didn't want to have to go through that again if we didn't have to.

LAVANDERA: There was no doubt in your mind that the coronavirus was not going to end up in Franklin, Kentucky.


WENTZ: Yes, because we weren't doing any measures to prevent that from happening.

UNIDENTIFIED MALE: COVID-19 numbers reach record highs here in the state of Kentucky.

UNIDENTIFIED FEMALE: That number keeps going up.

PAYNE: When it first hit, it was very, very scared. I was scared to go anyway. I was scared to even go out of the house just because I was just paranoid and freaked out. Of course my company shut down.

LAVANDERA: And what kind of work do you do?

PAYNE: I'm a supervisor at the automotive plant.

LAVANDERA: OK. PAYNE: We make the -- I guess you called it the side view mirrors for Toyota and Ford.

UNIDENTIFIED MALE: What are you doing?

C. SMITH: Everything shut down.

S. SMITH: He is smiling.

LAVANDERA: Talk to me about what kind of work you were doing before the pandemic.

C. SMITH: Heating and air. Take old units out, put new ones in.

LAVANDERA: What do you think of that work? Was that something that say hey this is ...

C. SMITH: Yes. I planed on doing it the rest of my life.

LAVANDERA: You thought, hey this is a job and a career I can raise my family on?

C. SMITH: Yes, it's not going away. You always want heat, yo want air.


The world stopped in mid-March. Kentucky shuts down and that obviously was going to stall the economy. Governor Andy Beshear right out of the gate started doing daily press conferences.

GOV. ANDY BESHEAR (D), KENTUCKY: We're staffing up right now. We are working as fast as we can and.

CORSEY: And he is telling people to apply for unemployment.

BESHEAR: I ask people every day when I have an update to sign up for unemployment. I actually encourage them to do it.

UNIDENTIFIED FEMALE: Worrying and broke, so goes the story for thousands in Kentucky.

CORSEY: The influx of people trying to file, trying to get help, trying to get paid was greater than anything we'd ever seen.

UNIDENTIFIED FEMALE: Somehow like last $100.

UNIDENTIFIED FEMALE: About to lose my car, you know, was way overdue.

UNIDENTIFIED MALE: I'm completely dependent on the unemployment insurance and I haven't received, you know, anything.

UNIDENTIFIED FEMALE: Kentucky has failed us for unemployment and it is a shame, a complete shame.

CORSEY: What they were doing was begging. They were trying to do anything they could. Imagine this, you've lost your job, the place where you work is closed, the governor tells you to file for unemployment. You file and nothing.

UNIDENTIFIED FEMALE: Big crowd outside the Kentucky state Capitol. They waited for hours to get in person help with unemployment.

UNIDENTIFIED MALE: Many of these people have been waiting in line since 8:00, 9:00 this morning. They're going into seven hours or more but ...

C. SMITH: They had a line out there that you can go stand in. I ended up standing out there for like eight and a half hours.

S. SMITH: You remember how mommy had to get that check for daddy when he couldn't work.

LAVANDERA: You were supposed to be getting unemployment money when you dialed the number at 7:00 in the morning to try to be the first in line and the line is full and you can't get through. Are the warning signs going off, there's like wait a second, there a lot of people in trouble right now.

PAYNE: It's scary, it's like you don't know which way to turn or what to do to try to get help to get resolved. You call and you call and you call and you can't get through. The lines are always back there. You try to set an appointment, it's already booked up.

WENTZ: But when you couldn't get anybody on the phone it was definitely frustrating and so I just decided to go ahead and get online. I have a degree and I was having problems and so it was pretty frustrating that I couldn't figure out how to navigate the system.

LAVANDERA: You're professionally trained veterinarian like I can save animals lives?


LAVANDERA: But I'm having a hard time with this online application.

WENTZ: Yes, I thought I was pretty intelligent but -- so it shouldn't be that difficult but it was.

LAVANDERA: You were appointed as executive director of the office of unemployment in Kentucky, how did that come about?

MCNAMARA: Yes, I was surprised and excited. The opposite of unemployment is a big deal. Obviously as we've learned, it's fundamental to the stability of the economy.

LAVANDERA: I think you've heard a lot of critics have said that you were appointed to this job as a political favor, and because of your lack of experience a bunch of people in Kentucky suffered. What do you say to that?

MCNAMARA: Well, I don't deny that part of the reason I was appointed, but it was that at the time my wife and I were pretty good friends with lieutenant governor but, you know, I ran a law practice so I had experience in management, supervising employees. LAVANDERA: And when did you start?

MCNAMARA: I started on January 16th I believe of 2020. I was on the job for two months when the pandemic hit.

LAVANDERA: And what happened in your office after that?

MCNAMARA: I mean, after that, we just hit chaos. The previous administration had intentionally gutted the opposite of unemployment. Bevin was really a mini-Trump in a lot of ways.

PAYNE: I've worked so hard to get where I am today. I don't want to end up homeless.



MAXSON: I took a move over to the Education and Workforce Development Cabinet. I ended up working on a whole lot of unemployment insurance issues.

UNIDENTIFIED MALE: Depression haunted America.

MAXSON: The entire reason that we have in unemployment insurance program is a direct result of the Great Depression. There was no real safety net at the time. So when people lost their jobs, people lost their homes, they couldn't eat. People lived in shanty towns all over the country. It was a really desperate time for a lot of Americans. And we still carry in our collective psyche, a lot of trauma from almost 100 years ago.

UNIDENTIFIED MALE: This social security measure gives at least some protection through unemployment compensation.

MAXSON: In response to the Great Depression, we had a series of reforms, the New Deal, and that includes Social Security, FDIC insurance, but one of those programs is also unemployment insurance. The idea of unemployment insurance is that it's a safety net, so that they literally don't starve or lose their house while they're looking for new employment.


LAVANDERA: When the economy shut down here in Kentucky in March, how quickly did you feel the effects of that?

C. SMITH: We were out of our house was in two months, slowly as the weeks went by just it was either do we save the money for rent or make sure we have food on the table for the kids.

S. SMITH: We've known each other our entire lives. Since COVID hit, we had a car, we had everything like having to get back and forth to work, fine. And then once unemployment kind of went downhill, our car got repoed because we couldn't make the payments. We've been living here with my in laws for amounts five months now. This is where we feed all three of our kids. When my nieces and my nephew stay, it's like eight kids in one room. One bathroom, 15 people sometimes.

S. SMITH: We would call the unemployment off and on all day long, all day long. And it would pick up, you would hear, well we're going to put you in a queue and then all of a sudden and be like, well we'll call you back when you're done with the queue.

And then every night around 8:00 or 9:00, you get a call back and it's like, well you're still in the queue, we'll call you back whenever we can. Well we've been in the queue since April of last year and I've never gotten a call back ever.

C. SMITH: There's nights that I cry myself to sleep because I feel like a piece of shit. I feel worthless, I can't provide for my kids.

LAVANDERA: Did you think that almost a year after moving out of your home that you'd still be here with your parents?

C. SMITH: No, Lord no.

STEVEN BESHEAR (D), FORMER KY GOVERNOR: This is Jane and I, watching her son, Andy, do his COVID 4:00 show.

A. BESHEAR: We have four confirmed cases of the novel coronavirus here in Kentucky.

S. BESHEAR: I was governor of Kentucky from 2007 to 2015.

We're sitting here in front of the house where I grew up. And then after a four-year intervention, my son, Andy Beshear, became governor.

LAVANDERA: Has your son come to you for economic advice during this pandemic, or is he like most sons they don't want to hear from their dad?

S. BESHEAR: We talk all the time but, you know, he lived through the Great Recession with me.

ANDERSON COOPER, CNN ANCHOR: A brutal bloody Monday more than 70,000 jobs cut today.

JOHN KING, CNN ANCHOR: New highs in the number of Americans asking for unemployment benefits.

UNIDENTIFIED FEMALE: 2.6 million jobs lost in 2008.

S. BESHEAR: I became governor of Kentucky right at the end of 2007 and that was about the time that the Great Recession starting hitting in full force all around the country including Kentucky and it hit us pretty hard.

LAVANDERA: If you look back at the great depression of the 1930s, unemployment was 25 percent. During your tenure in the Great Recession, unemployment was at about 10 percent here in Kentucky. In this pandemic economy with a unemployment rate of more than 16 percent, what was your experience with the unemployment system in Kentucky?

S. BESHEAR: As the recession deepened, we got more unemployment, more unemployment, more unemployment claims. We were able to come through it but it showed a lot of shortcomings in the systems. It needed a new computer system. You know, the computer system that we still have was put in in 1970 I think, that was before Andy Beshear was born.

MAXSON: The core of our unemployment insurance program runs on an ancient system. I believe it's a mainframe that dates back to the 1970s. And I think at one time, it actually ran on tape like you'd see in a movie, a giant room full of computers with reels of tape, with the core of our program still runs on that.

LAVANDERA: The mainframe that we were using was one of like the two oldest unemployment systems in the country. Did anyone ever raise any warning flags about hey I don't think our 1970s antiquated computer system can handle this?

MCNAMARA: No, I never raised any concerns about the computer system. When we started asking for, you know, what we needed from the computer systems, the head of the I.T. departments like that's going to be tricky.


MAXSON: The federal government said to states, we would like you to implement some reforms in your program, expand benefits to some new classes of people. And if you do that, as an incentive, we will provide this U.I. modernization money to you that you can use to modernize your programs.

And most states took that, about 75 percent of states took money, used that to help modernize their systems. But there were a handful of states that didn't. And Kentucky was one of them, we just didn't take it.

LAVANDERA: The American Recovery and Reinvestment Act ...

S. BESHEAR: Right.

LAVANDERA: ... of 2009, which my understanding was supposed to be able to be used to modernize the computer system in Kentucky.

S. BESHEAR: You know, I honestly don't remember those details.

LAVANDERA: In hindsight, do you wish you would have done something more with the computer system?

S. BESHEAR: Oh, sure. You know, you look at it now and, you know, we were able to get through the Great Recession with that system. And, of course, nobody could anticipate a once in 100-year pandemic, but I certainly wish we had spent money on it and got a new system in there and up and running, at least before this COVID thing hit. But we left the next administration with a pretty decent system. What they did was dismantling.

MATT BEVIN (R), FORMER KY GOVERNOR: America is getting soft, the underbelly is getting soft.

MAXSON: They were intentionally making it more difficult for people to access the unemployment system.



UNIDENTIFIED MALE: What are your dreams? Your goals? What are your aspirations?

UNIDENTIFIED FEMALE: Are you serious about that?

UNIDENTIFIED MALE: Yes. What are you doing?

UNIDENTIFIED FEMALE: Signing us up for unemployment benefits.

UNIDENTIFIED MALE: Unemployment -- D, that's for deadbeats.

DR. SARAH DAMASKE, AUTHOR, "THE TOLLS OF UNCERTAINTY: HOW PRIVILEGE AND THE GUILT GAP SHAPE UNEMPLOYMENT IN AMERICA": There's a long- standing history in the US and talking about the unemployed as if they do not want to work. We think about them as being lazy.

UNIDENTIFIED MALE: I'm unemployed, I don't have a job.


UNIDENTIFIED MALE: I want one and I don't have one. I'm trying to get one, but no one let me have one. I don't have a job.

UNIDENTIFIED FEMALE: But I do have a job and he does no and that bothers both of us, so.

DAMASKE: There's this moral weight attached to the idea of providing unemployment benefits, because if we're going to provide unemployment benefits, then we have to decide somehow whether people are deserving of them. This is true in the press. This is true in politicians.

S. BESHEAR: Together, we can and we will make it through these tough times.

LAVANDERA: Are there any lessons from the Great Recession experience that you had that you think applies to the pandemic economy?

S. BESHEAR: Certainly, we opened up I think 31 field offices around the state in order to be able to deal with our people face-t- face. We bumped up the budget, we had about 100 people well-qualified and train that could handle major events.

We left the next administration, the one that came between when I served as governor and when Andy came in in 2019, with a pretty decent system set up that needed some more improvement. What they did was dismantling.

BEVIN: America is getting soft, the underbelly is getting soft.

MAXSON: Bevin was really kind of a mini-Trump and a lot of ways.

BEVIN: Out there in the heartland and places like Kentucky, they care about their wallet, they care about whether the money that they earn is able to be kept as much as possible by themselves.

MAXSON: He was a pro-business businessman. And so he was very anti- unemployment insurance.

BEVIN: The very first thing we talked about was enacting pro-business right to work legislation. This was controversy. It was controversial to many.

MAXSON: Prior to Bevin, the easiest way to submit an application or get help with an unemployment insurance issue was to actually go into the local unemployment office. And we had a lot of them, we had 51 I think scattered throughout the state. We didn't ever want somebody to have to drive more than an hour to get to an unemployment office.

LAVANDERA: Former Republican Governor Bevin close 31 unemployment offices across the state, he reassigned 95 unemployment office staff and the budget was cut from $41 million to $25 million. That's the reality you walked into?

MCNAMARA: Yes, that's the reality I walked into on day one.

LAVANDERA: Do you know what the logic was behind closing 31 of these offices of unemployment?

MCNAMARA: The previous Governor Matt Bevin is a libertarian and doesn't believe in government handouts. And I think they were intentionally making it more difficult for people to access the unemployment system.

PAYNE: The first time I had to claim my first benefit check requested in online said it went through everything, said everything processed fine, but I've never received the check in the mail. So I kept trying to call, call and call and get through, never could get through. Finally, maybe after two months, I finally got through to somebody. And she was saying, yes, we sent that check out on such and such date. I said, but I never received it.

Something looks odd about my claim. And she said, ma'am, where do you work? I told her I work at Ficosa (ph) and she said, we're on here. And says you worked at Popeyes Chicken in Louisville. I said, no, I've never worked there.

LAVANDERA: When you figure out that someone's stolen your identity, what was your reaction on the phone?

PAYNE: It was scary because me and my son was standing there and I was like, wow, really? Are you serious? My benefit amount was like 14,000 that I could use. All of that it's gone.

LAVANDERA: Every dollar of unemployment that you were eligible for is gone.

PAYNE: It's gone. It's almost bad eight months ago.


It's gone almost a year. I've still been fighting trying to get off straight now.

LAVANDERA: So it was pretty early on in the pandemic when you filled this out?

PAYNE: Yes, yes, since day one. Yes. And I've been fighting it ever since.

STATE SEN. MIKE NEMES (R), KENTUCKY: I was surprised when Matt Bevin calls me up and say hey, I want you to come work for me.

LAVANDERA: What did you do in the last administration here in Kentucky?

NEMES: Well first two years, I've worked in the Labor Cabinet and then we moved over to the Education and Workforce Cabinet.

LAVANDERA: We've heard from some critics who basically say that they feel that Governor Bevin deliberately tried making -- getting unemployment more difficult that that's what he was really trying to do.

NEMES: Are you serious? Who said that?

LAVANDERA: Number of people we've talked to.

NEMES: A number of. Give a number, please. He's very compassionate man. He was very wanting to do things right. No, you don't make an appointment hard. Know that -- make sure that you earned it or it was yours, yes.

LAVANDERA: Do you think that's an unfair criticism?

NEMES: Not unfair, it's asinine. It's idiocy. There's no way. You know, I wouldn't blame any governor for doing that unless I had absolute, you know, knowledge of that.

LAVANDERA: When the number of unemployment offices across the state were closed down, were you concern that that was, hey, look, I think this can be problem.

NEMES: Absolutely not, because they're 50 some odd unemployment offices were in -- during the Bevin administration. He closed half of them and the other half, it was turned into career centers. They weren't being used. We say $3 million, $4 million a year by closing in. JAMES MAXSON, FORMER IN-HOUSE COUNSEL FOR THE OFFICE OF UNEMPLOYMENT INSURANCE 2008-2016: The federal government provides the vast majority of the administrative costs for the program. And so, if you have somebody closing local offices and letting go of unemployment insurance staff, the question of course becomes, why are you doing that?

It's not really a cost-saving measure because the federal government is picking up the tab for that. And I think the Bevin administration has suggested that the federal government was no longer going to pay for those things, that claim is dubious. I have never heard a suggestion that the federal government was going to disallow costs for local unemployment offices.

LAVANDERA: When these offices are closed, isn't that money that's coming from the federal government?

NEMES: Well let's change that around. Even if those offices are open two-day, I would say they need to be closed to do this online and to bring it up to date these unemployment centers. As you keep saying, we shut down, is not the reason we're having a problem and should have been shut down. And even today, if they were existing, I would shut them down.


NEMES: Yes, because especially with COVID, you're not going to go into a place and stand in line 6 foot away in this and get things done.

CHRIS OTTS, WORB REPORTER: Back in 2017 when I got word that this downsizing was happening, I got Hal Heiner who is former Governor Bevin's secretary of Education and Workforce on the phone and ask, hey what happens, you know, if the unemployment rate goes up and people suddenly need unemployment benefits again and there's a big demand for them and suddenly we don't have as many places for people to go. And here's what he said.

HAL HEINER, SEC. OF EDUCATION AND WORKFORCE UNDER GOV. BEVIN: By going to a higher level of service using technology whether it's online, having easy to use call centers to make it easier for those individuals to do it at home.

OTTS: So evidently, that higher level of service that Heiner talked about never happened.

PAYNE: I tried to keep track of everything. So far, this is the total amount that was stolen. This is a nightmare. Every day you try to call and call and call. I'm constantly always thinking about what am I going to do.

So I swear I'm trying so hard to fight say, hey you guys need to get this straight now, what am I -- I'm going to work so hard to get, I'm trying not to tear up. But I've worked so hard to get where I am today to just lose it all in a split second, so I just can't -- I just don't know what to do.

LAVANDERA: You feel like you're running out of time?

PAYNE: Yes, I do. And I don't want to end up homeless because I can't afford to pay my rent or have my car revolving like I made my car payment.

LAVANDERA: You said when you walked in to this job ...


LAVANDERA: ... that you had inherited an office that was severely understaffed average hold time on the assistance line, was over an hour and there were already tens of thousands of backlog claims. And just to be clear, that was before the pandemic.

MCNAMARA: That was before the pandemic. The previous administration had intentionally gutted the office of unemployment. They took away the ability for most people to be able to walk into a building and get help with their unemployment claim. They understaffed so there weren't enough people staffing the phone lines so the whole times got incredibly high.


LAVANDERA: There are some people from the current administration who say, look, we inherited a mess from Governor Bevin.

NEMES: OK. Let's assume that's true, which I disagree with. We've had a year. What's the problem in that?

UNIDENTIFIED MALE: There were a lot of management mistakes in running the program during the pandemic.

UNIDENTIFIED MALE: There was well over 400,000 e-mails that went unread.

CORY SMITH, FILED FOR UNEMPLOYMENT INSURANCE IN APRIL OF 2020: There's been many nights I've cried myself to sleep, I can't do anything to help provide for them.


GOV. ANDY BESHEAR (D), KENTUCKY: I'm going to put out the order today to close all restaurants and bars.

MCNAMARA: We found out the same way everybody else did that the governor was going to shut things down with his press conference that he held. We had to start figuring out how we're going to handle all the applications that we knew were coming and we were already understaffed.

At the same time I got a call from the deputy secretary and he said I've spoken with the governor and the governor wants to find a way where we can start paying people right away as fast as we can and paying people that are otherwise not eligible.


LAVANDERA: As everything starts shutting down in Kentucky, what decisions did you guys make?

DR. CANDY WENTZ, FILED FOR UNEMPLOYMENT INSURANCE IN MARCH OF 2020: Well, before it had shut down, hurry up seeing fill these bird feeders up. I decided that as a nation, we weren't doing anything, so I was going to withdraw my son from school. Just tried to figure out what we were going to do.

LAVANDERA: And at that point, did you know anything about how the unemployment system worked?

C. WENTZ: No, I did not. I mean, I had no clue.

BESHEAR: We are waiving the waiting period for unemployment.

C. WENTZ: I learned about that through watching Andy's briefings that he started having.

BESHEAR: We will help you. We will do everything we can to make sure that you qualify.

C. WENTZ: When he was talking about, if you were off work or afraid to work, you could file for unemployment.

BESHEAR: I want to make sure you have enough to get through this. Knowing the ramifications of the decisions that I've made, and it's on me.

MCNAMARA: That increased the number of applications we were getting exponentially. And back to back weeks, we got something like 150,000 applications. We had one day where we got 200,000 phone calls. At some point the math is overwhelmed you. You're just not going to get 200,000 calls.

VICKIE WISE, DEPUTY SECRETARY, KENTUCKY LABOR CABINET: I'm the Deputy Secretary of the Labor Cabinet. I started with the cabinet in June of 2020.

LAVANDERA: What do you say to those people who say what's taking so long to get this program back on track?

WISE: So the first thing that I would say is programs cannot be invented overnight. What the Governor did know when he are assessed when he first took office was that we had an antiquated system, we had a backlog of appeals and adjudications and so he set out to fix that. But three months into his administration, he was faced with having to pivot and having to determine what best to do for the citizens of Kentucky.

UNIDENTIFIED MALE: They haven't even been able to speak to a real person.

UNIDENTIFIED MALE: We don't want to talk to a phone. We want to talk to actual person. UNIDENTIFIED FEMALE: I talked to somebody but I don't know if anything is going to change.

LAVANDERA: Your first interaction with the unemployment system here in Kentucky, what was that like?

C. WENTZ: Well, it was just calling on the phone, calling, calling, just trying to get somebody to answer some questions to see if I should even apply. We have set aside time to hear from our auditor.

MIKE HARMON, KY AUDITOR OF PUBLIC ACCOUNTS: My position is the auditor of Public Accounts.

UNIDENTIFIED MALE: The unemployment system findings.

UNIDENTIFIED MALE: And we had released our statewide single (ph) to audit of Kentucky, which is something that our office does every year.

UNIDENTIFIED MALE: Unopened and archived e-mails. These were to the Office of Unemployment Assistance.

UNIDENTIFIED MALE: One of our findings in our reports, one that really kind of broke my heart, we found out that there was well over 400,000 e-mails that went unread that they just took and they archived.

According to our report, initially, they did try to start to organize them a little bit. But then at some point, they just are captain (ph). Sometime in April that the first batch got archived. And then there was another series about a month or two later that ended up getting archived as well.

UNIDENTIFIED MALE: I'm hoping I don't have to re-file another claim, because it was a nightmare.

UNIDENTIFIED FEMALE: Everything was fine. To the end, it says you have a U.I. issue, please call us. I call them you could get through.

OTTS: There's about 2 million people in the labor force in Kentucky. Over the course of this year, about a third of our labor force has filed for unemployment benefits. That's a really big percentage.

MAXSON: The sheer number of people who lost their jobs because of the pandemic, that was always going to cause problems. And I don't think there's a single unemployment insurance program in the country that hasn't struggled at least some.

DR. SARAH DAMASKE, AUTHOR, "THE TOLLS OF UNCERTAINTY: HOW PRIVILEGE AND THE GUILT GAP SHAPE UNEMPLOYMENT IN AMERICA": When we're thinking about what's happened in Kentucky, it's with the unemployment system breaking down. It's not surprising at all, because we see that happening on a national level.

And that's not surprising at all because we have stopped funding the unemployment system and we've stopped doing that nationally and at the state level. Specifically, since the Great Recession, we've seen less and less federal and state support. MAXSON: Dr. Wentz, it's kind of a tech quick example of everything that can go wrong with the unemployment insurance program.


WENTZ: We're going to have to just see how far these onions go.

LAVANDERA: You submit your application in March, and you don't hear from the unemployment office until May?

C. WENTZ: She did say that I was eligible for unemployment. But the way that she worded it, it implied that work could cause my health condition. My employer was very angry with me. She said, we didn't cause any health condition. And I said, I never said that you guys caused any health condition. So she contested that finding, and of course, tried to call unemployment again to get them to straighten it out. Can't get ahold of anybody,


C. WENTZ: Oh, yes. They said, because I didn't qualify for unemployment that I had to pay back all that money that I had received since March.

LAVANDERA: That must have come as quite a shock.

C. WENTZ: It was.

LAVANDERA: Are you angry about that?

C. WENTZ: It's definitely confusing. And then I know a lot of other people don't have the money to pay it back.

LAVANDERA: You guys had a cushion.

C. WENTZ: We had an emergency fund. A lot of people don't have that little cushion.

LAVANDERA: So you don't want anyone to feel sorry for you. You want people delving to understand.

C. WENTZ: Just how frustrating the system is.

UNIDENTIFIED MALE: I can only imagine what it's like if you need that money.

SMITH: This was our room (ph).



UNIDENTIFIED MALE: That's the unemployment system.

UNIDENTIFIED FEMALE: They want us to go our and look for jobs, but I'm on hold for eight hours.

UNIDENTIFIED FEMALE: No one's responding to e-mails or anything.

UNIDENTIFIED MALE: Almost eight to nine months, I have not received a dime of unemployment.

UNIDENTIFIED FEMALE: A lot of people's being evicted from their homes because of the unemployment.

DAMASKE: The reason that thinking about the unemployment system is so important is because many more Americans will experience unemployment than we typically realize. Somewhere between 60 percent to 70 percent of Americans will experience at least one bout of unemployment in their lifetime.

Study after study has shown that the more support that people receive, the more likely that unemployed are to find work that matches their skill set, and to find work that pays them well.

LAVANDERA: We have requested to speak with Governor Beshear for nearly two months about this unemployment insurance program in Kentucky. He's canceled twice, many people want to know is like, what exactly is being done to get this unemployment program back on track and serving the needs of millions of people in Kentucky.

WISE: We have returned $5.9 billion, I believe in benefits. And that's a good success story.

LAVANDERA: The governor is proposing a $48 million upgrade to the state's unemployment program, including this outdated computer system. But my understanding is it wouldn't take effect until 2023.

WISE: I can't speak to how long it will take for a new system to be created, developed and implemented. I think the most important thing that we can say to claimants is that we want them to know that we are every day working harder to find solutions to resolve the crisis that we have.

SMITH: Let me see if it's unlocked.

LAVANDERA: The day you guys moved out of your house, what was that like for you guys?

SMITH: I (INAUDIBLE). Kids room, kids room, this was our room. It was awful. Here we are. We had just moved in a year before that.

LAVANDERA: Two months after you lost your job, you moved out of the house?

SMITH: This is our bedroom here. We just couldn't make the payments. There's been many nights I've cried myself to sleep because I just don't feel like I'm worthy enough to have the three kids in my life. You know, I can't do anything to help provide for them. I don't want to feel the way I feel, but what can I do? I'm trying everything I can.

LAVANDERA: Do you have any safety net? Any kind of savings? Any ...

SMITH: No, no, no. It's paycheck, paycheck.

LAVANDERA: And are you getting unemployment now?


LAVANDERA: Are you supposed to be getting unemployment.

SMITH: Yes, yes, yes, yes. Because I reapplied and got approved and I don't know where to stop.

LAVANDERA: Do you find yourself kind of thinking though about the future?

SMITH: Once I can finally find a job and get back going, get back on our feet, you know. We'll be all right.

LAVANDERA: Were there any stories like real life stories that you're able to tie directly back to the problems you had in your office?

MCNAMARA: Certainly anybody that I've heard of that's close to House had been evicted or something like that. I mean, that was because we weren't getting benefits out fast enough.

LAVANDERA: I would imagine those stories sting pretty hard.

MCNAMARA: Yes, those kill me. This kind of story is killing me.

I regret I wouldn't see -- going to see this through because in the moment, I knew that this was going to be the most important thing I would ever do with my life.

GILBERT CORSEY, WDRB ANCHOR: The former head of Kentucky's unemployment office has died. Muncie McNamara died yesterday after what his obituary called a battle with chronic depression.

LAVANDERA: Just 11 days after we spent nearly two hours interviewing Muncie McNamara, we learned that he died by suicide. His family tells us he had been battling chronic depression. In May of 2020, McNamara was fired for, "unprofessional behavior toward Cabinet leadership and lacked leadership skills necessary to address the issues affecting the Office of Unemployment Insurance". That's according to the office of the Lieutenant Governor of Kentucky.

McNamara told us he was fired for exposing and blowing the whistle on the failures of the unemployment insurance office. At the time of his death, he was appealing his firing. McNamara's wife also shared this statement with CNN, "Muncie cared deeply about his work. He cared immensely about causes of equality and justice. The girls and I will miss him so much and we are grateful for the outpouring of love and support for our family during these difficult days."


What do you think the unemployment crisis here in Kentucky can teach the rest of the country?

MCNAMARA The biggest failure here was perspective. Because if we had sat there from the beginning and said, this is going to last for a year, we would have made very different choices.

LAVANDERA: What is this done to your kind of outlook about, you know, jobs like this and how effective they can and can't be?

MCNAMARA: It's a struggle not to get cynical and depressed about just politics generally. When you've seen the sausage made, I still think if it's done well, it can be a positive force for good in the world and help people.

This is probably an issue with government everywhere. You've got to get people in there that are looking forward. Now I'm sure they'll probably try and fix the unemployment office and pour money into it. But it shouldn't take a crisis like this to do that. People should look at it and be like, we've got a potential failure in this department. We need to address it now so they will need it. It's there.