Georgia’s newly elected commissioner of labor touts the strength of the state economy month after month but says he is worried about how his department would handle a downturn.
While the unemployment rate of both the state and Atlanta, its premier economic region, have been at near-record lows for months, even the longest, strongest economic boom eventually peters out or get torpedoed, said Bruce Thompson, a former legislator and businessman, in an interview with The Atlanta Journal-Constitution.
“It is not a matter of if, it’s a matter of when,” he said. “Sooner or later, it will come. And we will be in trouble with a downturn.”
Thompson replaced Mark Butler, who had declined to run for re-election after three terms as commissioner.
The state Department of Labor handles claims for unemployment insurance from laid-off workers. Butler and the agency came under fire during the worst of the pandemic job losses as it was overwhelmed with hundreds of thousands of claims, falling months behind in getting checks out to the jobless.
Pre-pandemic, the state had been averaging about 5,000 claims a week. Since then, the economy has largely recovered and claim levels are again back down to that level.
But any downturn will challenge the unemployment insurance system again, much of it reliant on decades-old technology.
The department’s budget received $8.1 million from the legislature this year, up 32% from a year ago, but that is far short of what is needed to fully modernize its systems, Thompson said. “We are going to have to have $60 million for a new UI system. We would need at least $35 million for the core functions.”
Much of that money would likely come from the federal government, which provides millions of dollars to state labor departments.
The department has about 900 employees — compared to more than 2,000 during the deep recession of 2007-09.
The dedication of those workers to their jobs — which often required extensive overtime during the pandemic — is, in many ways, more crucial than any software, Thompson said. “We are in the people business. Forget automation.”
Ray Khalfani, policy analyst at the Georgia Budget and Policy Institute, said he shares Thompson’s concern about a recession.
“The fact is, recessions can be very unpredictable, in length, how deep they are,” he said. “And there is a worry that a recession could spiral.”
Workers depend on the Labor Department when there is a downturn, to provide enough money to keep them paying bills until they can find another job, he said. “Unemployment insurance systems stabilize our economy.”
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