"There was a kind of silence," said Raymond Martinez, business agent with one of the two unions that represents the workers at the center in Northeast Philadelphia. "People were in shock."
Pennsylvania's Department of Labor and Industry says that claimants will experience no disruption in benefits and services because their claims and questions can be handled by employees at the state's other centers or online.
"The number of [unemployment claims] being filed has dropped since the recession's end," said Labor and Industry Secretary Julia Hearthway in a statement. "We aren't back to the level of prerecession claims, but the volume has dropped to the point where the need for higher capacities and greater expense isn't there."
The state runs nine unemployment compensation service centers and Philadelphia's is the only one that will close.
Philadelphia had an unemployment rate of 10.2 percent in May, compared with the state rate of 7.4 percent and the national rate of 8.2 percent. Pennsylvania's June statistics will be released Thursday. Philadelphia's rate is down from 10.8 percent in May 2011, and the state's rate has also declined from 8 percent a year ago.
The department declined to respond to multiple queries about why it chose to close Philadelphia's office or exactly how many workers would be affected.
Martinez said the workers were told that the layoffs were not due to a decline in the volume of work. Instead, they were told that the lease on the center's office space at 2901 Grant Ave. was up and that it was too expensive to renew.
"The remedy ought to be to relocate the office and not shut it down," said State Rep. Mark Cohen, a Democrat from Northeast Philadelphia who is the minority chairman of the General Assembly's human services committee.
"I think it's a big mistake. There are already big backlogs. Many callers are just frustrated and give up," he said.
"Unfreaking believable," said Sharon Dietrich, a normally calm lawyer who heads the Community Legal Services of Philadelphia's employment law practice. CLS provides legal services to low-income clients, and Dietrich has been working with the state's unemployment-benefit system for decades.
"I'm so apoplectic, I can't tell you," she said. "If they were simply reducing staff, I would understand that. It is true that unemployment staffing waxes and wanes. But to close an entire service center seems like an extreme measure at a time when they have all these needs that aren't being met."
She described a client who spent 45 minutes dialing the office and then once his call was received, spent another 45 minutes on hold. He can't use a computer, because he doesn't have one and because he's unemployed, he can't afford to take a bus to the library.
Pennsylvania already lags behind most other states in its ability to deliver initial benefits in a timely manner. The national standard mandated by law, Dietrich said, is that 87 percent of all first benefits must be delivered within 14 days after the initial claim is filed. In June, the department did meet the standard, but that has not usually been the case over the last five years, according to federal statistics.
Department spokesman Christopher Manlove would not discuss the impact of the center's closing on the timely delivery of benefits.
The state's labor department's statement attributed the closing to a decline in the federal funding it receives to administer the unemployment system.
While state unemployment benefits are paid through an insurance trust fund financed by employers and employees, the state's administrative costs are covered by the federal government through the "federal unemployment tax act" or FUTA payroll deduction.
Even as there are cutbacks, Pennsylvania's insurance system has become more complicated. Recently passed rules require claimants to prove they are looking for work. There are new eligibility rules, and various federal benefits have been phased out. It all adds up to a lot of questions coming into the state's call centers.
"The more complicated you make it, the more the call centers are needed," Cohen said. The department had no response.
The workers, represented by the Service Employees International Union and the American Federation of State, County and Municipal Employees, do not have bumping rights. Many have worked for the department for decades, Martinez said.
Contact Jane M. Von Bergen at 215-854-2769, firstname.lastname@example.org or @JaneVonBergen on Twitter. Read her Jobbing blog at www.philly.com/jobbing.