Outdated Government IT Infrastructure Cost US Economy $40 Billion During Pandemic, Research Reveals
A Federal Reserve study indicates that antiquated COBOL-based unemployment systems in 28 states led to massive payment delays and reduced consumer spending. The research estimates these outdated systems cost the US economy at least $40 billion in lost GDP during the pandemic’s initial months.
Legacy Systems Struggle Under Pandemic Pressure
Outdated government IT infrastructure, particularly systems relying on the 60-year-old COBOL programming language, contributed to at least $40 billion in economic losses during the COVID-19 pandemic, according to a working paper from the Atlanta Federal Reserve. The research indicates that states using antiquated unemployment insurance systems experienced significant processing delays that reduced consumer spending and economic activity.
