The fired labor economist who couldn't get unemployment

0:01NPR.

0:11In August of 2025, Erica McIntyre lost her job. So she did what a lot of newly unemployed people do. She went to apply for unemployment benefits. And early in the process, she had to verify her identity. In the state that I was applying, it's an app that you download on your phone. and you take a picture of your license, and then you take a selfie, and the software verifies that it's you.

0:35Sierra Juarez:Seems simple enough, but Erica actually had a lot of trouble uploading a photo of her license to this app. It would just sort of spin and then die and say failure to register your picture. And I tried changing the lighting. I tried deleting the app and reinstalling it. I went on Reddit. Erica called the state unemployment office. They told her to just keep trying the app. It was so frustrating that I got stuck on the identity verification step because I was like, listen, Google me. Let's get on a Zoom. You can look at my face. I am literally on the front page of the New York Times. Yeah, that's because Erica was arguably the most famous unemployed person in America at the time.

1:19Sierra Juarez:President Trump had fired her from her job as commissioner of the Bureau of Labor Statistics. This is The Indicator for Planet Money. I'm Adrienne Ma. And I'm Waylon Wong. Economists like Erica say the U.S. unemployment insurance system is badly in need of improvement. Today on the show, we diagnose what's wrong with the current system and hear some ideas on how to fix it. Plus, we learn if Erica ever got that app to work. This message comes from Insperity, providing HR services and technology from payroll, benefits, and HR compliance to talent development. Learn more at insperity.com slash HR matters.

1:59Support for this podcast and the following message come from Dataiku. AI agents are transforming how enterprises work. The problem is many operate in secret. The right people rarely know what their agents are doing, if they're doing it right, or that they even exist at all. Dataiku gives companies one place to see, control and measure every agent across the entire business. Visit dataiku.com slash NPR. That's D-A-T-A-I-K-U dot com slash NPR.

2:31Sierra Juarez:This message comes from Capella University. You know that feeling when there's a spark building inside you that you were meant for more? That's your own drive pushing you towards what's next. Capella University gets that. With their FlexPath learning format, you can set the pace and earn your degree without putting life on pause. You've built experience and know what you're capable of. Now, this is your time to turn that momentum into more. The only real question is, what can't you do? Learn more at capella.edu. The baseline problem with the American unemployment insurance system is that it's underfunded and outdated.

3:12Sierra Juarez:That's according to economist Catherine Ann Edwards. I think the real, probably most succinct criticism of the unemployment insurance today is that we can do so much better. The current system is funded by employers who pay both federal and state taxes. When a worker loses their job and files a successful claim, they receive a payment that's based on what they were earning before. And each state runs its own program. This system came out of the Great Depression. Catherine says employers were asked to fund unemployment insurance so that they would be dissuaded from laying off workers. They were trying to make it less lucrative for companies to lay off workers whenever business got slow by building in a benefit for those unemployed workers that those employers had to pay for.

3:57But one problem, Catherine says, is that this system was created with manufacturing workers in mind. And decades ago, it was typical for employers to lay off people during slow times and rehire them when business picked up again.

4:10Sierra Juarez:Today, the U.S. economy is more oriented towards services than manufacturing. And people who get laid off are not usually expecting to return to that job. They're looking for a new employer or even a new career. So that's one problem with the current system. Here's another one. Because each state runs its own program, there is a lot of variation in how workers qualify for unemployment, how long the benefit lasts, and how much money they get. Catherine says let's say you and your work bestie are employed by the same company, but you work in one state and your friend is in another. No, it's, y 'all, I mean, it's criminal.

4:47I mean, can you imagine you have the same job and the same wage and the same salary and you both get laid off on the same day and they get four times the unemployment as you? Can you imagine if Social Security looked like that? I mean, people would riot.

4:59Sierra Juarez:So depending on the state, there can be significant differences in how much unemployment benefits workers get. There's also a range of experiences with the application process. Remember Erica McIntyrefer, the economist who was famously fired by the Trump administration? She couldn't get the mobile app to work when she tried uploading a photo of her driver's license. And she was filing for unemployment in Maryland. Erica said when she called the state unemployment office, she was told the mobile app was the only way. We reached out to Maryland's Department of Labor. Spokeswoman Dinah Winnick told us that the identity verification step is a relatively new part of the process.

5:37She also said the state does offer other options like video calls or visiting an office in person.

5:43Sierra Juarez:Either way, Erica says she tried using the mobile app for two weeks, but by then she was getting job offers. I was becoming less anxious about how long I might be unemployed. About a fourth of people who qualify for UI never successfully file a claim. I was one of those. I threw in the towel. Apologies to anyone at the Maryland Department of Labor who's hearing this story for the first time on the radio. It's state capacity issues. It's no slight on the people who work in the system. Capacity aside, Erica flags another problem. Workers aren't getting enough money. There are caps on benefits. And Erica says in most states, these caps haven't kept up with inflation.

6:26And like we said before, the payouts are based on a worker's prior wages. Erica says that today, the benefits aren't matching the reality of workers' expenses.

6:35Sierra Juarez:Yeah. For example, Erica says the median salary for a software developer in California is$170 ,000 a year. If they get laid off, unemployment benefits would replace just 10 to 13 percent of their income. Just to frame that, like most people spend 30 percent of their income on shelter. So your UI is covering one third of your housing cost if you were laid off as a software developer in California. That is a very low insurance rate for earnings. She says federalizing the system more would make funding and benefits more consistent across states. And economist Catherine Anne Edwards is also in favor of a more federal structure.

7:17Sierra Juarez:She envisions three tiers, depending on how long someone's been unemployed. At every stage, you're eligible for the next level of benefits that is then designed to meet your unemployment situation. The benefits would be most generous at the beginning, but be capped at 6 to 12 weeks. Workers facing longer-term unemployment would get less money but additional services, like training and assistance with relocating. Another big change Catherine proposes is that a much larger pool of workers would be eligible for benefits. Today, employers are the gatekeepers. They certify whether someone qualifies for unemployment.

7:54Sierra Juarez:Catherine wants anyone who's out of work to qualify, even a college graduate who can't afford a job. And Catherine believes there's a long-held stigma around unemployment. People who collect this benefit are often painted as lazy or taking advantage of government generosity. And she acknowledges that people who receive money when they're out of work do tend to be unemployed for longer. How much longer is not really agreed upon, but it's marginal. Like, it could be a week or two. The worry about that is somewhat overblown because it's a time-limited temporary benefit to people who just had an income cut.

8:27Sierra Juarez:The way Catherine sees it, if the government gives unemployed people the money they need to cover their expenses, they'll have the breathing room to find a new job that suits them. And the better the match between the job seeker and the job, the more productive that worker will be. The way that we treat unemployed people is if you lose your job, we expect you to start over when, in fact, starting over is a very costly, costly process in our economy. And so this is a way to essentially make our economy more efficient. And so then I get to put on my little like economist tiara and sash and say like, hey, you don't have to like unemployed people.

9:03In fact, go on hating them. This is just about a more efficient, productive economy. And then cue the music. And then the American flag is like flapping behind you. America 250.

9:15Sierra Juarez:I think they should start handing out these economist tiaras in sashes. I think that would be a good look for the profession. You think we should have economist pageants? Yeah. It's like, now for the talent portion, you're going to draw a graph. So many graphs. So many graphs. And if you're wondering what happened to Erica McIntyre for the fired head of the BLS, She's now at Stanford University. And one of the topics she's working on is how to prepare the economy for AI-related disruptions. She says overhauling the unemployment insurance system should be part of that conversation.

9:50This episode was produced by Julia Ritchie and Cooper Katzmikin with engineering by Sina Lafredo. It was fact-checked by Sierra Juarez. Kicking Cannon is our show's editor and The Indicator is a production of NPR.

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