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Washington's unemployment insurance fund is one of the few in the nation that isn't in debt, according to ProPublica, the non-profit investigative journalism site. ProPublica found that In fact, at $2.6 billion, we have the biggest fund in the country.
And we're going to need it; the department announced yesterday that 9.5 percent of Washingtonians were jobless in December, the highest unemployment rate in 25 years.
ProPublica reported yesterday that 25 states are borrowing from the federal government to pay out benefits. (See fun interactive graphic.) Another nine will likely need to in the next six months. And other states are raising their unemployment insurance taxes or cutting benefits to try and stay solvent.
But not here. Back in 2003, the state legislature made it harder to qualify for unemployment if you quit a job or were fired for misconduct. At the same time, the tax rates for businesses that had more layoffs, like seasonal construction companies, increased. On top of that, ESD spokesperson Sheryl Hutchison says, Washington had lower-than-expected unemployment from 2006 to 2008.
Thanks to building up that enormous fund, Washington was able to cut the unemployment tax rate slightly last year while giving people who lost their jobs an additional $45 a week. "In general it seems to be working pretty well," Hutchison says.
But employers are still deeply unhappy. That's because while the base unemployment tax rate is down, the amount most employers are actually paying is up. If you lay off an employee and that worker starts collecting unemployment, it counts as a claim against your business. And like a car accident raises your insurance payment, unemployment claims increase the amount you pay the state above the base rate.
As the rising unemployment numbers suggest, most employers have cut staff. So even though the base rate is lower overall, ESD estimates most businesses will be paying about 54 percent more in unemployment insurance premiums to the state this year thanks to their claims.
The BIAW is, predictably, upset with the whole situation. The home-construction trade group is now fighting bills in Olympia that would make it easier to obtain unemployment, saying "only labor hacks and their legislator puppets could think this is a good idea."
But thanks to ProPublica's report this week, it's going to be difficult to rally support against the unemployment insurance system.
The BIAW's complaints about the Department of Labor and its workers' compensation system received more support from Democratic legislators and newspaper editorial boards after an auditor determined that the agency may go broke in the next two years.
But it seems the BIAW will have no such luck on unemployment.