Evers fires DWD chief over unemployment comp woes

    DWD Secretary Caleb Frostman
    Wisconsin Department of Workforce Development Secretary Caleb Frostman speaks at an informational hearing by the Senate Committee on Labor and Regulatory Reform in May. Gov. Tony Evers fired Frostman on Friday, Sept. 18, (Screenshot from Wisconsin Eye broadcast)

    The embattled head of the state’s labor department quit Friday on orders of Gov. Tony Evers amid continued delays in Wisconsin’s unemployment compensation system, which has been overwhelmed by record job losses from the COVID-19 pandemic.

    Evers asked for and received Caleb Frostman’s resignation as secretary of the state Department of Workforce Development (DWD), and named Amy Pechacek, deputy secretary at the Department of Corrections (DOC), as an interim replacement.

    “People across our state are struggling to make ends meet, and it is unacceptable that Wisconsinites continue to wait for the support they need during these challenging times,” Evers said in a statement announcing the change. The governor put the onus for the system’s struggles on the pandemic as well as on longstanding problems that date back years before he took office.

    “It is clear that our unemployment system has faced historic levels of claims these past few months,” Evers stated, “hindered in part by antiquated technology we inherited, and processes designed by Republicans to make it harder for folks to get these benefits.”

    When the spread of COVID-19 led the state to halt public gatherings and temporarily close many businesses beginning in March, layoffs soared along with applications for unemployment compensation. From March 15 to Sept. 12, the state has paid $3.68 billion out to 513,870 people with claims, according to DWD’s latest weekly report issued Sept. 14.

    But along with that have come numerous complaints of difficulty getting through to file a claim, confusion over the online system for filing claims and delays in getting approved. As of the Sept. 14 report, there were at least 98,309 people awaiting approval for their unemployment claims, and the backlog has been much higher at times over the summer.

    In May, Republican lawmakers grilled Frostman about the delays, but Democratic lawmakers countered that restrictions on unemployment eligibility instituted under Gov. Scott Walker were contributing to the problem. The Democrats unveiled a package of bills in July to roll back many of those restrictions, but those have gone nowhere as the Republicans who control both the Assembly and the Senate have refused to hold any sessions.

    DWD has staffed up, with workers reassigned from other state agencies and outside contractors hired to run call centers for claims. The governor’s office stated Friday that the state currently has more than 1,500 people working on unemployment cases, more than twice the 600 employees who do the work under normal circumstances.

    “We have continued to add additional state resources to support the DWD, but it is clear that we must have change if we are going to address these problems to get folks their benefits faster,” Evers stated.

    Upon hearing Friday of Frostman’s exit, Victor Forberger, a lawyer who has represented unemployment insurance claimants and who has blogged extensively on the system backlog, told the Wisconsin Examiner that just changing the secretary would not be sufficient to address the root causes of the problem.

    “It’s an institutional problem,” Forberger said. “Maybe he wasn’t the right person to address all the problems, but changing one person is not going to address what’s needed.”

    The technical shortcomings of the computer system used to manage unemployment insurance in Wisconsin extend to the interface that applicants must use to sign up online. Faulty programming hasn’t been updated to reflect the suspension of work search requirements for applicants during the pandemic, for example, leading to denials for applicants who must then appeal.

    Forberger agreed that flaws in the system have been longstanding, but said those have been exacerbated by the current culture inside DWD that is more focused on fraud prevention than serving applicants.

    “It’s a problem that predates Evers,” he said. “This department is intentionally set up to make unemployment [insurance] as difficult as possible. You have to redo the whole organization from the ground up.”

    Erik Gunn
    Senior Reporter Erik Gunn reports and writes on work and the economy, along with related subjects, for the Wisconsin Examiner. He spent 24 years as a freelance writer for Milwaukee Magazine, Isthmus, The Progressive, BNA Inc., and other publications, winning awards for investigative reporting, feature writing, beat coverage, business writing, and commentary. An East Coast native, he previously covered labor for The Milwaukee Journal after reporting for newspapers in upstate New York and northern Illinois. He's a graduate of Beloit College (English Comp.) and the Columbia School of Journalism. Off hours he is the Examiner's resident Springsteen and Jackson Browne fanboy and model railroad nerd.