Inside the Hidden World of Legacy IT Systems
How and why we spend trillions to keep old software going

“Fix the damn unemployment system!”

This past spring, tens of millions of Americans lost their jobs due to lockdowns aimed at slowing the spread of the SARS-CoV-2 virus. And untold numbers of the newly jobless waited weeks for their unemployment benefit claims to be processed, while others anxiously watched their bank accounts for an extra US $600 weekly payment from the federal government.

Delays in processing unemployment claims in 19 states—Alaska, Arizona, Colorado, Connecticut, Hawaii, Iowa, Kansas, Kentucky, New Jersey, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, Virginia, and Wisconsin—are attributed to problems with antiquated and incompatible state and federal unemployment IT systems. Most of those systems date from the 1980s, and some go back even further.

Things were so bad in New Jersey that Governor Phil Murphy pleaded in a press conference for volunteer COBOL programmers to step up to fix the state’s ­Disability Automated Benefits ­System. A clearly exasperated Murphy said that when the pandemic passed, there would be a post mortem focused on the question of “how the heck did we get here when we literally needed cobalt [sic] programmers?”

Similar problems have emerged at the federal level. As part of the federal government’s pandemic relief plan, eligible U.S. taxpayers were to receive $1,200 payments from the Internal Revenue Service. However, it took up to 20 weeks to send out all the payments because the IRS computer systems are even older than the states’ unemployment systems, some dating back almost 60 years.

As the legendary investor Warren Buffett once said, “It’s only when the tide goes out that you learn who’s been swimming naked.” The pandemic has acted as a powerful outgoing tide that has exposed government’s dependence on aging legacy IT systems.

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