Skyrocketing unemployment insurance claims, nationally and here in Washington. More expected as shutdowns continue.

Consider this:

  • Last week, we saw a 150% increase in claims, and we are seeing an even more dramatic increase this week.

That’s the first bullet in a statement by Washington State Employment Security Department Commissioner Suzi LeVine. It’s an astonishing statistic, with obvious public policy implications. 

The Seattle Times reports,

Nationally, unemployment claims jumped by a third last week over the prior week, according to the labor department. But the increase has been even sharper in Washington.

Statewide, 14,846 unemployment insurance claims were filed during the week that ended last Saturday. That’s more than double the number from a week earlier, according to department figures released Thursday.

ST business reporter Paul Roberts makes the comparison to the Great Recession.

And unlike during the Great Recession, when claims increased gradually, “this is all happening at once,” said Nick Demerice, a spokesperson for the Employment Security Department, adding that much of the funding for the payouts back then came from the federal government.

The state’s jobless rate will likely rise. It was 3.8% in February. At the height of the Great Recession, in 2010, Washington’s seasonally adjusted unemployment rate hit 10%. On Wednesday, Treasury Secretary Steven Mnuchin reportedly warned congressional leaders that the national unemployment rate could hit 20% without strong federal action.

Washington Research Council economist Kriss Sjoblom writes that we can expect a few months of escalating figures. And WRC analyst Emily Makings looks at how the state is addressing the crisis using the UI system.

EHB 2965, the bill that makes appropriations from the rainy day fund for the response to COVID-19, includes $25.0 million for a new COVID-19 unemployment account. Normally, when workers are laid off, their unemployment insurance benefits are charged to their former employers, whose UI tax rates then increase (this is called experience rating). Under EHB 2965, the UI benefits given to employees who were temporarily laid off due to COVID-19, were approved by ESD to be on standby, and returned to their same employment will be reimbursed by the COVID-19 unemployment account instead of being factored in to the employer’s experience rating.

Until June 30, 2021, the bill also allows employees under quarantine to meet UI work requirements if they are “able to perform, available to perform, and actively seeking work which can be performed while under quarantine or isolation.” (Normally, individuals must be able and available for any work for which they are “reasonably fitted.”)

While it’s impossible to know with certainty how this will continue to unfold, Makings points out that the state UI system is among the best funded in the nation.

UI benefits are paid from the state’s UI trust fund (which is funded by employer taxes). According to DOL, as of Jan. 1, Washington’s UI trust fund balance was $4.778 billion. That is the second highest trust fund balance in the country, after Oregon ($5.055 billion). (ESD’s November 2019 UI trust fund forecast noted that the trust fund held $4.86 billion as of Nov. 30, 2019, which was about 15.5 months of benefits. In 2008, the trust fund held about 21.2 months of benefits.)