As of 5 p.m. Tuesday, all bars, restaurants and coffee shops in Minnesota are ordered to end dine-in service until at least March 27. The order signed by Gov. Tim Walz Monday also temporarily closes theaters, museums, gyms and other recreation venues.
The move is expected to impact hundreds of thousands of workers, triggering the largest unemployment benefit payout in state history, Gov. Walz said.
Department of Employment and Economic Development Commissioner Steve Grove is leading that effort and joined MPR News host Tom Crann.
This conversation is transcribed below and has been lightly edited for clarity.
Tom Crann: We're hearing hundreds of thousands of people will be affected. Do you have a more precise estimate?
Steve Grove: Well, we know there are about 220,000 workers who work either full-time or part-time in a restaurant, bar or other hospitality industries. And so it's a lot of Minnesotans. And we know that some of those workers have access to other types of benefits and payments, such as paid leave and sick leave.
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But many do not, which is why the state's unemployment insurance program is an important lever to help them get through this difficult time.
Crann: What are we looking at in terms of the dollar amount — and where does that money come from?
Grove: Well, the way that unemployment insurance works is that it's a federal program, but states administer it. Employers across the state pay into a trust fund that then pays benefits back to workers when they are separated from their jobs by no fault of their own. And of course, nothing defines no fault of your own more than a global pandemic. So the executive order that the governor issued just yesterday ensured that any worker affected by the COVID-19 crisis and separated from their work because of it, will be eligible for unemployment insurance benefits.
Now, the state's trust fund right now has about $1.5 billion in it, which is a pretty healthy place to be compared to other states. And Minnesota has a very generous program compared to other states as well. Unemployment insurance benefits pay out about half of your usual salary per week — with a maximum $740 paid out and up to 26 weeks of leave is covered. We do encourage workers to look for every way to get paid leave and sick leave benefits before getting unemployment insurance because those types of payments will pay more. But for others and at some point for many, unemployment insurance may be necessary. And we do encourage people to apply at uimn.org.
Crann: Tell us how many people have applied for benefits so far this week. Do you have those numbers?
Grove: It's going up by the hour. Just to give you a sense of the scale of this, yesterday, around this time we saw about 40 to 50 applicants per hour. And today we're seeing about 2,000 applicants per hour.
So, it's really the biggest spike we've seen in the state's history. The program is set up to handle, you know, increasing numbers. Of course, usually when a recession would hit, that would take, you know, a period of days and weeks and months. And so we would staff up accordingly. And those numbers would follow trend line.
This, of course, is just a major spike. We're doing everything we can at our department to accommodate that spike. We've got people working extra hours, working on the weekends. And that executive order that the governor signed yesterday makes it such that a processing application is a lot quicker because so many people are now eligible and it's a lot simpler for us to process you through the queue. We are seeing increased traffic, but the team is working hard. And, you know, we're confident we'll be able to help people get their benefits when they're eligible during this difficult time.
Crann: There were reports of a short outage last night. Can you tell us that that's not going to happen again or not?
Grove: There was not an outage last night. The website has not crashed and it has not gone down. That was not accurate reporting. What happened earlier in this process was that every state's unemployment site has to verify the identity of an applicant and a federal database that every state has to access to verify those identities went down. And so there was a particular page on the [unemployment insurance] website that brought up an error message that happened not just in Minnesota, but in every state in the country.
And so really, we need our federal partners to make sure that their technology is shored up. This is not a state issue. Every state is affected when our federal partner’s websites aren't in order. And so we ask them to continue to make sure that their systems are secure, as such that we can have the fastest service possible. But our website did not go down, uimn.org is working just fine and we encourage all workers to go use it.
Importantly, rather than calling in and I say that because our call lines cannot handle the volume that is coming and they're just not built to do that. Our call lines are made for individuals who do not speak English and need that direct support or folks who are just disconnected from the Internet and can't apply via their mobile phones or via the website. So please do go to uimn.org if you are applying for UI.
Crann: Last night's executive order that was announced, I'm just wondering, what did that change to the speed with which people will be approved and receive benefits?
Grove: The executive order did a couple of really important things, first of all. It just made it very clear that any worker who is affected by the COVID-19 crisis is eligible for unemployment insurance. So that's the most important thing. It also eliminated a waiting week that usually exists in the program, which will increase the amount of money and the speed of payments that workers can get from the program.
And then also, it took a look at the business community and said we don't want businesses to have to bear the brunt of increased tax charges based on this program growing. So we are pausing any increase in unemployment insurance taxes to employers during the period of the executive order. This is not a time that we're asking businesses to pay those taxes. The government's going to cover that.
I think it's important to say that while the governor is, through his executive order asking that businesses and industries indicated in that order pause for a moment. It is important to us that grocery stores, other vital businesses do stay open. We know that many restaurants are looking into and already do offer delivery and pickup options. Those still exist. We want to keep Minnesotans fed and have access to our food supply. You know, this is a big shift, no question. But we did everything we can to make sure that the state can proceed calmly and with the right resources it needs for people to thrive during a difficult time.
Crann: Couple of pretty basic questions, just basics on unemployment with quick answers, if we could, and that is who is eligible under what's happened here for unemployment?
Grove: You are eligible to find employment insurance if you are displaced from your work. Did it no fault of your own? And so if for whatever reason that you are no longer working, you are now eligible for unemployment insurance, even if, for example, your hours have been severely cut. We may still be able to cover some of that gap with unemployment insurance.
Crann: We may still be able to cover some of that gap. That doesn't sound clear, is that may or will?
Grove: Well, just one of these things is that for any applicant unemployment insurance, there are unique details of their workplace that our team needs to review. There are not always universal answers to these questions. But the short answer is yes. If your employer has reduced your hours significantly due to a factor that is not under your control, you can through a shared work program — that's part of [unemployment insurance] — have access to some benefits that can make up some of that difference.
Crann: How soon will people receive benefits?
Grove: Generally, we can get payments out the door within a week or two. You know, we're trying to make that as fast as we possibly can. This is an unprecedented surge in applications. And so we do ask for people's patience, but the team is working very hard to process this quickly and get payments out the door.
Crann: How long do you see people continuing to get these payments?
Grove: Well, you'll continue to get payments for every week that you're eligible for the program, and the max is 26 weeks. So again, we have a generous program in the state that people will have access to for some time. Of course, when you get back into work — which we hope of course for all workers is sooner rather than later — then you drop off the program. But, you know, 26 weeks is that max window. It's important that we take care workers for the length of this crisis and these challenges and our program is set up to do so.
Crann: Are you working with a projection or financial model that looks at what this total cost will be to the state and the long term impact?
Grove: We are modeling that out and we're using some of the early data here to get a sense for what that might be. The unemployment insurance trust fund has about $1.5 billion in it. So it has funding in it now and we're confident that's a strong level. But of course, this is going to be a very unique surge in applicants. And so what we're modeling out and we'll track it. You know what happens in states when unemployment insurance trust funds are depleted is they generally get a zero-interest loan from the federal government to cover additional payments. We are certainly not there yet.
We also know that the federal government is debating legislation that could increase the size of trust funds in every state through payments that they would send. And so we urge our federal government partners to look into that and think it could be important for our state and many others.
Crann: As the DEED commissioner, to basically close down a sector or more of the state's economy like this is a very serious decision that has negative impacts on many Minnesotans. What were you advising the governor when it came to this step?
Grove: I want Minnesotans to know that your governor took this decision extremely seriously and was counseled by numerous health experts and economists. And in those discussions, we went through a lot of different factors. And ultimately, your goal as a government needs to be to protect your citizens. The data was just really clear that unless we made a move like this, we are risking putting Minnesota's health at risk in a way that could have really lasting effects.
It is not an easy decision to close down any business, let alone the scale at which these closures will affect our economy. But the longer-term economic effects of not doing so would be far worse if we continue to congregate in these spaces. If we continued to not listen to CDC guidance, then our economy could take an even bigger hit. And so this decision was made primarily from a health perspective, but obviously from an economic perspective, too. We've got to do this so that our economy can survive this crisis and come out on the other end stronger.
But, you know, we recognize this is a very big decision. It's a very difficult decision we realize it affects countless Minnesotans. And that's why rather than just closing down bars and restaurants, which some states did just on its own, we had this additional executive order related to the unemployment insurance program to make sure that we are taking care of workers in this really difficult moment. I think that's the kind of message you're going to continue to see from our governor is that every move that we make, we're thinking about how we can help Minnesotans in light of these extraordinary times.
Crann: Do you see a program continuing as things perhaps bask the novel coronavirus, ease up to get some of these restaurants and businesses back on their feet so they just don't so they don't not recover from this?
Grove: These businesses there are such a cultural cornerstone of our state and we do want to make sure that we can get them back on their feet as quickly as possible as this crisis passes. And we'll be working for ways to do that. You know, I think the federal government and the power it has to help businesses through its levers is usually far greater than a state.
But that does not mean as a state, we shouldn't be looking at every lever possible. We're already exploring some different loan programs, some low-interest loan programs. We're talking with the Legislature. Legislators on both sides of the aisle have come together on this and are looking for interesting and unique solutions. And, of course, we work with our federal government too. We've got to look for some unique ways to help businesses.
Particularly small businesses that are affected by this crisis. Everybody is affected. There's no question. But it's those small businesses that have less margin, fewer employees and are affected more gravely by these changes that we really want to make sure we focus on the most. And you're going to continue to see some ideas and good thinking, both from the governor and from the legislature on that in the coming weeks.